Welcome to week two of our series on record keeping to get where you’re going in your grazing operation. Today we meet Dave Pratt, Ranch Management Consultants Emeritus. In this video he shares the Ranching for Profit record keeping mantra: “Records are a waste of time – if they aren’t specific, timely, and comparable to a plan.” Then he introduces three tools that meet those criteria, the Stock Flow, Cash Flow and Grazing Chart. He takes us through why each is important, and
This is definitely a more in-depth approach to record keeping, but it’s for a reason. It helps folks manage for profit, a goal that it’s assumed you’re interested in if you’re attending a school called “Ranching for Profit.” In this 4:23 video, Dave will introduce to each of the record keeping tools, explain why each is important, and how to use them. I’ve also included a transcript and illustrations below.
Bud Williams used to say that we have three things in our inventory: money, grass, and livestock. Bud was right.
In the ranching for profit school we give people tools to manage these three inventories. We use a stock flow plan to show the movement of animals into and out of the herd. We use a cash flow forecast to show the movement of money into and out of the business. And we use a grazing chart to show the accumulation of forage through the year.
This is a stock flow. Starting with the opening inventory for each class of animals for the herd, we show births, deaths, purchases, sales and transfers from one class to another. For example some heifer calves might be kept for breeding so at weaning those would transfer from the H1 class. We transfer the H1s that are confirmed pregnant to the H2 class, and we might transfer the H2s that wean a calf and get pregnant with their second calf into the cow class.
Now, with the stock flow we can project with reasonable accuracy our closing inventory. So with that information we know how much supplement we’re going to need, how many ear tags we’re going to have to buy, how much vaccine we’ll use, and we know all that six months to a year before we need any of it.
Once we’ve completed the stock flow, we have the information we need to project the cash flow. The Cash Flow shows when income will come in and when expenses will go out item by item, month by month.
I remember describing a cash flow at a Ranching for Profit school once as a tool that puts you in control of your business. I said, it’s the steering wheel for your business. So get out of the passenger seat and get behind the wheel and take control of your business. One person commented, “Passenger seat! Heck, I’ve been bound and gagged in the trunk!”
Well, regardless of where you are, in the passenger seat or in the trunk, the Cash Flow, more than any other tool, puts you in control of your business.
And finally the grazing chart. We use the grazing chart to show the carrying capacity of pastures, the constraints that we might encounter during the grazing season, and to plan grazing. I like to use these laminated charts. It makes it a lot easier for everyone to participate in the planning process. And it’s a lot easier for people to see where animals are supposed to be at any particular time. The chart shows our estimate of capacity for each pasture. It shows how we plan to use these pastures through the year. We can show constraints like a tank that goes dry late in the summer or a pasture that has a problem with larkspur or some other poisonous plant in the spring. We can show things like the calving season, that has an impact on every pasture. Or the breeding season.
We can plan around these potential problems simply by drawing a line through these issues and then we show where the herd’s going to be at any particular time by drawing that in too.
Now, the stock flow, the cash flow, the grazing chart, these are all valuable planning tools. But they’re also records. On the stock flow we use the white rows to make our projections and the gray rows to enter the actuals. On the cash flow we show the projected amount for income and expenses for each month in the first row for that month. We show actual income and expenses in the second row. We use the third row to show the difference between the projected budget and the actual income or expenses. And then we use the fourth row to track the cumulative difference since the year began.
We do something similar on the grazing charts. On the paper chart we plan in pencil and record the actual in pen. Whether it’s the laminated chart or the paper chart, we show our projected graze period with a single line. On the laminated chart we show the actual by shading out the whole square. And then we show the number of days actually spent in that paddock here to the left of the shaded area. We make a quick calculation of the stock days of forage actually used in stock days per acre and you record that just to the right of the shaded area. So to keep track of how much we’ve actually grazed. And then finally one final notation to show whether in our judgement the pasture’s been used lightly, moderately or heavily.
Now at the Ranching for Profit school we tell people that records are a waste of time. They’re a waste of time if they aren’t specific, timely, and comparable to a plan. The stock flow, the cash flow and the grazing chart are all specific, timely, and you can’t get much easier to compare the actual results to the plan than by keeping the plan the record on the same chart.
Stock flow, cash flow, grazing chart: three indispensible tools if you’re ranching for profit.
You can get the 3×5, large, laminated stock flow and grazing charts that Dave describes from Ranch Management Consultants. If you’d like the free, downloadable versions that Troy Bishopp provides, you can get them here. We’ve collected all the articles on how to create a successful grazing plan and using the chart here.
I also highly recommend the Ranching for Profit school. Every single person I’ve spoken to has said that attending an RFP school made all the difference in the world to their business and quality of life. (And I’m not being paid to advertise this. This is just what I know.) Yes, there’s a cost involved, but you can never go wrong investing in yourself. To give you a flavor of what you can expect, sign up for the free introductory lessons and their ProfitTips newsletter.
While you’re at their site, onpa where you can find some great reading and a video that I’ve recommended everyone watch.
Stay tuned for next week when Troy Bishopp shares what he’s learned from his 12 years of keeping records with his grazing chart.