Background Intro Timing – where I am w/ business (sold out) Slow growth (river property) vs. rapid growth – Will get to cattle production projections

Scaling Up…Yay! Leave w/ a rough idea of how/why to scale up. It is a major change in business Visioning process/long term planning…find help assessing business plan (SFBB example not growing produce…focusing on most profitable enterprise)

What track are you on? -Know where you are. -What are your ethics/goals/moral – Know where you’ve been (records, records, records)…SFBB records Record keeping spreadsheets – Labor – Production – Sales – Separating expenses between enterprises – Where do you want to go? (Business Plan) Do you want to drive a tractor all day every day or be alone on horseback in middle of nowhere doctoring cows Are you willing to manage a labor force and oversight of quality of laborers work

Drivers Market demand (simple supply vs. demand) Bored (Excess resource) (example – excess hay) Not at an appropriate economy of scale (not profitable) Need to do something with the land

Economy of Scale Economy of scale graphic (does not show revenue) – Inputs (expenses) – Outputs (revenue) – Generally speaking: if your producing at a small scale, your cost per unit may be high but you’re probably also selling your product for a higher cost per unit Don’t fall into a trap thinking you can grow 1000 acres of mixed greens and still move all of your product at your local farmers market. If you can…let’s talk! – Maximizing Outputs per Input – Example of equipment for row crop – Cattle production (feeding, haying, grazing, etc). Anecdotally, very little increase in labor per head Substantial increase in acreage (irrigating, fencing, haying, etc) Ultimately, how large do you want to be?

Economy of Scale 2 Cost per unit goes down, volume goes up, eventually revenue per unit goes down. – If you can maintain same revenue per unit, net profit goes up – As volume goes up, revenue per unit goes down Where is the sweet spot?

Move on to Mike (vegetable production)

Livestock Present different challenges than expanding veg. production - purchase price of animals, etc. - long term commitment to a living being - slower growth cycle - Livestock can also work “for” you – mowing, pasture health – get into that momentarily Basically, it costs more money and takes more time to expand livestock operations - When you invest in breeding stock, you’re making a capital investment, not incurring a “COGS”

Before you go buy another 500 acres Step 1 – Optimize the resources you already have (easiest way to increase profits) May take longer than you would like or have time to “float” the business Should always be a high priority

Grazing Planned and properly managed grazing is one of the best ways to improve/maintain soil health, cycle nutrients, and manage weeds – Grazed perennial pastures create more “bioligical capital” (solar energy into biological energy) per acre than cropland Coverage Photosynthesis “successions” every time it’s grazed

Planning your Grazing Focus on – Animal performance – Forage quality Grazed at proper stages increases production and uniformity – Soil health Grazed plants exuding sugars + compounds to feed soil biota Dung, urine, trample – Human component Time, energy, profits Does not necessarily require more acreage

What sector? Many different sectors to raising livestock – Hay – Weanling – Stockers – Butcher – Breeding stock – Diversification – Use forage resources to help make this decision (drought, short season pastures, etc)

Is there enough of an increase in revenue to justify each life stage? - $800 increase in weanling vs. butcher - 1 year - 1 winters worth of feed - time and energy SFBB: 2 acres/hd to finish (1 year) - could I be more profitable having more cows and just sell calves in fall?

Inputs for Livestock Breeding stock is not profitable for several years Can’t expand season by season Be consersative when buying breeding stock Suffer loss if buying stock in “good” years but having to sell stock in “bad” years. Diversification minimizes risk (hay, calves, butcher) Winter feed costs can sink you quick. Having an established market for fall calves gives you more options depending on your needs

Outputs (Revenue) Direct farm Sales (for each sector) – Allows some control over price – Takes more inputs to manage (is ratio of in to out worth it?) Marketing, delivery, etc Auction

Cattle Production Spreadsheet