Strategies for Beef Cow/Calf Production in the 21 st Century

1. Strategies for Beef Cow/Calf Production in the 21st Century Clay P. Mathis* and Jason Van Tassell * * King Ranch Institute for Ranch Management * Director and Endowed Chair * * M.S. Student; KRIRM Class of 2012

2. Why do we have STRATEGIES? ….because we have a target or goal or vision!

3. Strategic Planning • Process for determining the strategies and tactics that will help a business achieve a given vision • Do you work at a “strategic” outfit? • Is there a written “vision” statement? • Is there a written strategic plan?

4. Strategic Planning Process • Create a vision • Determine strategies to achieve the vision ITS NOT EASY!

5. Executing Strategies Harvard Business Review (2010) • What is the most important aspect of strategy execution? • 72% - spelling out strategy in a clear language Communication! Synergy!

6. Getting StartedQuestions to Answer • What do you want the future of your operation to be? • What is the current status or your operation? • What do we think we know about the future? • How do you build successful strategies to create the desired future of your operation?

7. King Ranch Institute for Ranch Management Established 2003

8. KRIRM Students • Students with practical experience • Focus on the big picture • Strive to hone and build ranching/business decision-making skills

9. Jason Van Tassell Halfway, Oregon KRIRM Class of 2012

10. Building the Plan • Take the 30,000 ft. view • Create a Vision • SWOT analysis • Bridge the gaps • Execute the plan

11. The Big Picture

12. Create a Vision

13. Vision Statement Three key components: • A statement of values and reasons that are the basis of the ranch business • And envisioned future describing what the operation will be like if it achieves its goals • A recognition of how the ranch/business serves its stakeholders (i.e., owners, employees, customers, community, and society as a whole.

14. King Ranch Vision Statement “Operate King Ranch Ranching and Wildlife with vision, profitability, and wise stewardship of all the resources (land, water, historical assets, people, wildlife, and livestock) so as to benefit this and future KR Family generations both culturally and financially.”

15. Desired Actual

16. SWOT Analysis Identify the key issues relative to moving from the current state to the desired future state. Every well-written SWOT should show “Here’s what we are good at… and this is what it does for us…” Ask the Question, “Why do customers do business with us?”

17. SWOT Analysis

18. Strengths • Always do strengths first. • Sit around the table together with the members of your team and CALL OUT the strengths of your operation. • Good water rights • Early grass • Reliable people or equipment • Location • Facilities, etc.

19. Weaknesses Just make a list of them. Don’t stop to debate if it is a weakness or not. Avoid being critical of any of the opinions. • High winter feed costs • Lack of good help • Worn out equipment • Location

20. Threats • Don’t waste time trying to decide if something is a threat or a weakness. • Try not to rule the meeting. • High Fuel Prices • Environmental Regulations • Urban Sprawl • Loss of Lifestyle • Foreclosure

21. Opportunities • Anything is valid. • Don’t let extreme ideas be refused. • Let this approach happen and don’t be afraid to “wait out” the silence. • Unused resources • Contract services • Eco-tourism • Corn Maze

22. Desired Gap Actual

23. Bridging the Gaps

24. Use the Tools

25. What do we think we know about the future? "…the future is becoming much less predictable.” Dr. Michael Boehlje Distinguished Professor of Economics Purdue University

26. What do we think we know about the future? World Population? Billion People Source: USDA ERS

27. What do we think we know about the future? Agriculture Production? • Must increase food production by 70 to 100% in 50 years? (Paul Clayton – USMEF) • Where will the increase in food production come from? • Oceana • S. America • N. America

28. What do we think we know about the future? Economic Recovery? • Increase $ = increase meat consumption • 2011 Forecast - Per capita income increase • China 8.1% (1.3 billion) • Vietnam 5.8% • Russia 4.8% • S. Korea 3.5% • Mexico 3.5% • Canada 2.9% • U.S.A. 2.0% • Japan 1.7% • World 2.2% ERS International Economic Data Set

29. What do we think we know about the future? U.S.A. – Interest Rates? • Must go up • Access to capital is declining U.S.A. – Anti-Agriculture Social Pressure? • On the rise…

30. What do we think we know about the future? U.S. Cowherd? • Decrease beef supply • Infrastructure at risk Million Cows • USDA/CattleFax

31. Trends we think we know! ↑ Food Demand (population) ↑ Per Capita Income (recovery) ↑ ↑ Global Beef Demand ↓ U.S. Beef Cows ↓ U.S. Beef Supply (?) Prices look good!

32. Message from Economists Volatility! Good? Bad? It Depends!

33. Volatility Creates Opportunity! The U.S. Beef Industry is changing…as it always has… Ask yourself: • What made your ranch successful the last 25 years? • Will that same approach work for the next 25 years?

34. Adaptability! “When the environment changes, it’s the adaptable that thrive, not the well adapted.” Michael Swanson, PhD Ag Economist Wells Fargo

35. Getting StartedQuestions to Answer • What do you want the future of your operation to be? • Vision Statement • What is the current status or your operation? • SWOT analysis • What do we think we know about the future? • Its Bullish!!!!! • How do you build successful strategies to create the desired future of your operation? • Identify what you want, what you have, chart a course (strategize), communicate the plan very well…and adapt along the way!

36. Thank You KRIRM.tamuk.edu