Question of the Week

Which segments of your operation aren’t serving you anymore?

Luke Kovarik shares the realities of operating a diversified operation in this week’s podcast episode. He talks about how he intentionally diversified from the beginning as a risk management strategy but now is thinking about cutting back in some areas.

Think about your own operation or life in general. How many directions are you going and are they all serving you? What could be cut from the list?

Happy ranching folks!

Using Technology to Streamline Work on Diversified Cattle Operations

Creating cash flow and mitigating risk are two things that frequently cross the minds of cattle producers. For that matter, maybe they never leave our thoughts. Luke and Natalie Kovarik set an example of how young and first-generation producers can make things work and get started in production agriculture if they are willing to take on opportunities, work hard, try new technology and keep a business mindset.

Kovarik Cattle Co. is a diversified cattle operation located near Ord, NE. Luke and his wife Natalie along with their kids and several loyal employees manage commercial cows, a seedstock herd, a backgrounding yard, run stockers, develop heifers and do custom artificial insemination work for others. It’s also important to note that Natalie shares their story and an accurate picture of what ranch life looks like with beef consumers on her social media channels and podcast amidst all the other juggling that comes with owning and operating a diversified family operation. 

Luke and Natalie both have agriculture roots but fall into the category of first-generation ranchers. They started from scratch and besides their kids, they are the only generation that is a part of their business. “When I was in graduate school, I got a call about a ranch near home that was up for lease. I wasn’t sure how I’d make it work but I saw the opportunity and couldn’t pass it by. So, I was in school during the week and taking care of cows or custom AI’ing on the weekends and that’s where it all started,” said Kovarik. Juggling multiple responsibilities from the beginning, Kovarik continued to shift where he spent his time and diversify as years went on.

After graduate school, Kovarik didn’t go straight back to the cow herd. He worked at an ethanol plant for a year to create income. When he quit this job in 2010, he knew he needed to create more cash flow. This is where the custom backgrounding piece fits into the puzzle. Kovarik knew early on that diversifying would be a key component of creating the cash flow needed to keep the business afloat and mitigate risks. “Diversifying by starting to custom background was one method I used to manage risk.  That’s why we started running stocker cattle too. The stockers are a part of our drought plan. If approximately 30% of our forage is allocated to stocker cattle and we have a drought, we can easily liquidate those. I like this method of risk management and I plan to stick with it,” said Kovarik.

Diversification doesn’t come without its challenges, especially as individual pieces start to grow. Each business demands time, energy and responsibility. Kovarik said it was at this point when he knew he needed to turn to technology for help. “When we started getting more customers on the custom backgrounding side, accuracy became more important. Managing millions of dollars’ worth of feed, interest, shrinks, billing and everything else was a nightmare in traditional spreadsheets. When we implemented Performance Beef in 2016, it simplified the entire process for us and allowed us to be more accurate. It more than paid for itself from a convenience standpoint let alone the accuracy side.” He uses Performance Beef heavily for his backgrounding operation but has reaped benefits from using it on the cow-calf side too for feeding and inventory. Performance Beef allows Kovarik to easily track cattle inventory and ownership, feed inventory, break evens and more from his phone, tablet or computer. His employees can also easily access the information they need from their own devices.

Additional technology currently used on Kovarik Cattle Co. includes EIDs, artificial insemination, embryo transfer, and genomic testing on their registered cattle. “I feel like all of these technologies are wonderful by themselves and when they are all incorporated to work together, they are pretty powerful,” said Kovarik. Undoubtedly, there are input costs and additional expenses that come with each added technology. However, it’s important to remember that an return on investment can show up in many forms. Sometimes it looks like added time or increased accuracy that saves you money on input costs. Other times it shows up over the course of several years as repeat buyers who know they can trust you and the added information you provide about your cattle.

For all the young or first-generation producers in the beef industry, there are quite a few great messages to learn from Luke and Natalie’s approach to expanding their diversified operation as first-generation producers; however, Kovarik says it best in his own words. “Be flexible and always look for opportunities.”

Listen to the full story here. https://www.casualcattleconversations.com/casual-cattle-conversations-podcast-shownotes/lukekovarik