Thursday, January 31, 2019

My Top 3 Takeaways from Montana's Next Generation Conference

Kari Lewis
As a Montana’s Next Generation Conference host committee member, I certainly didn’t get to see as many of the presentations as I would have like, but those that I did see were excellent.  Throughout the talks I noticed some common themes that I hope to apply to my own operation in the coming year.  The following were my top three takeaways.
"You cannot be a low-cost producer
unless you have great records."  Matt Roberts
                First, it’s the low-cost producer that wins.  The low-cost producer is the first producer to start making money when the market begins climbing, and they make money longer into the market cycle as well.  The low-cost producer knows their costs of production.  Matt Roberts, Friday’s keynote speaker, said, “You cannot be a low-cost producer unless you have great records.” 
                This point tied into Travis Standley’s ‘Top Tier Producer’ workshop on Saturday where he said that of the top ranches he has worked with, they know their costs/head/day, and that their budget is far more important to them personally than it is even to their banker.  Whether it’s feed supplement for the cowherd or fertilizer costs for the wheat crop, it is critical to know costs/unit when making decisions.  Standley had ranchers work through an example comparing various feed supplements to illustrate that less dollars/ton may not always be the most economical, it’s cost/head/day that really matters. 
Secondly, “If you want to improve your business, improve your books,” Roberts pointedly said.  Roberts shared that Apple knows their cost of production to the fourth decimal point, yet most farms don’t know their returns within $10/acre.  You must know where you’re making your money in order to know where to put your money.  Did that soil amendment or extra fall supplementation really pay?  Only your records can explain if that was a wise investment or not. 
Lastly, when it comes to farm or ranch transition, Matt Roberts shared two tips.  First, the number one thing that you can do to increase the probability of transferring your operation to the next generation is to improve your bookkeeping.  Secondly, build the farm so you have something to transition.   
“You’re in the absolute most complicated small business in the world,” Matt Roberts shared. As one producer, I can’t control the markets, weather, or Washington politics.  However, I can control my bookkeeping and costs and to me, and that’s a great first step towards striving to be a top tier producer. 

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