Justin Sexten is Head of Industry and Network Partnerships, Precision Animal Health.
The idea of flipping the calendar to a new year is increasingly foreign as we continue to move toward digital planning. I count myself as someone who historically used paper calendars primarily as an organized notepad to remind me of the past rather than looking forward. Increasingly my calendar notes are being replaced by pictures and screenshots in an attempt to integrate and digitize my records.
The start of the new year offers the opportunity to reflect and plan at the same time. Many tend to use the new year as a goal setting period while others are more focused on evaluating the successes and shortcomings of 2021. Looking through my collective notes for 2021 I realize many of the key records needed are poorly captured in my pictures.
When reviewing the past to plan for the future we often focus on the outcomes rather than the process. Outcome evaluation is relatively simple, was the decision profitable or not. The factors of profitability are straightforward, lower costs or greater revenue. These metrics make sense when the enterprise is short term and the alternatives are limited in scope.
If we take a long-term view of return on investment and labor resources, enterprise profitability often doesn’t tell the entire story. In these cases the decision’s impact is deferred beyond our scope of memory or record keeping capacity. Here success is viewed as progress where immediate financial incentives may be less clear. The context of the choices we opted against can be as insightful as the decision itself.
For many long term decisions we focus on evaluating the many alternatives due to the size and time the decision may impact the operation. This same evaluation is worth considering for all decisions regardless of scope as the small decisions can add up over time to expand or limit the operation.
Whether recognized or not we impose operational constraints on each alternative decision. These may be as impactful as the choice we decide to implement. Our decision process is more likely a product of what we are willing to implement rather than the most financially correct decision at the time.
Consider the decision to market calves at weaning. For many, determining if preconditioning pays is a secondary decision to “can we process, manage and feed calves for another 45 days.” With time as the most limiting and valuable resource in most operations, evaluating the opportunity for financial gain in light of time commitment is a real factor. While the 45-day time commitment may be pressing at the moment, how this example potential enterprise fits within the broader scope and future of the operation is worth considering.
The factor of time was highlighted in a recent Twitter thread by Ndamukong Suh. His focus was on having a long term vision, thinking in years rather than months. He commented “Nothing is fatal on a long enough time scale. You can always rebound, come back, do better”.
The cattle business requires a long term outlook, without tracking the scope of alternatives we don’t or won’t implement the ability to evaluate improvements and do better is also limited. If all we consider when evaluating a decision’s outcome is the markets and cattle biology then one or the other will surely be the cause.
Because we don’t factor in the alternative constraints doesn’t mean those constraints didn’t affect our outcome. There is no shortage of constraints placed on most beef operations. Leaving aside “that’s the way it’s always been done”, for most operations enterprise execution is limited by some combination of labor, capital, risk, and knowledge.
As you look toward setting goals for 2022 consider the opportunities to address these operational constraints. A place to start identifying your unique operational limitations is development of the many sub-categories within the buckets above.
Another way to identify limitations is to consider the perpetual goals of reducing input costs, adding value and enhancing marketing. For most, these goals are increasingly difficult to make annual progress toward. How might these goals be enhanced by reducing operational limits?
Another way to identify limitations is considering practices others use that “will not work” in your operation. Buying hay, limit feeding, purchasing replacements, running yearlings, genetic testing, early weaning, and retained ownership are just a few ideas that come to mind. Working through a couple of these examples will highlight operational limits and may identify an enterprise opportunity for the new year.
If enterprise expansion isn’t in the plan for 2022 consider the opportunity to refine how you inform decision making. We have limited control of the market, understanding the limitations within the operation can provide insights on controllable aspects of the business we need to consider in the long term.
