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Worland – “Dysfunctional decision-making leads to dysfunctional farms,” commented Andy Junkin. “This trend is killing us.” 

Junkin, a seventh-generation farmer from Canada and expert in farm decision science, headlined 2019’s WESTI Ag Days, a two-day event highlighting a variety of production topics for farmers and ranchers. During his presentation, which included a four-hour workshop, Junkin emphasized the necessity of learning to communicate and make decisions as a family to improve the business. 

“The real villain of our times is not the bank, cattle prices or our family members,” he said. “The real villain is the dysfunctional way we make decisions together.”

Junkin continued, “If we can make decisions as a family, profitability will skyrocket, and we’ll get rid of our frustrations. Then, farming gets fun again.”

Helping ranches

Junkin works with ranches across the West, helping them to streamline their decision-making ability and turn the ranch around. 

As as example, he referred to one family in Iowa that he worked with.

“The farmer, Jesse, had two sons, Beau and Luke, and a daughter, Daisy,” Junkin explained. “Jesse had been controlling the farm with an iron fist, and several years before, the boys began rebelling because they didn’t want to be told by daddy what to do.”
Junkin approached the farm office and asked what problems or weaknesses the farm had, but it took the family five minutes before they admitted to weakness in their pregnancy rates. 

After one brother said they had a problem getting cows pregnant, the other balled up his fists, and a physical fight ensued. Unfortunately, Junkin said this situation is not uncommon.

Junkin said the problem is often a long-standing irritation that continues to cause problems.

“If I have a stone in my shoe and don’t take it out, I’ll be lame by the end of the week,” Junkin said. “It would be silly for us to leave the stone in our shoe. But, how many family farms do we know of that have a stone in their shoe and a couple of problems bringing down the operation?”

Technology changes

Changes in technology have affected many aspects of the agriculture industry across the U.S., but Junkin said the most impactful and most significant change has been in healthcare, which keeps farmers on the operation longer.

“Fewer farmers are dropping dead from heart attacks today than in the 1950s,” he said. “In the 60s, when a farmer needed a new hip, he retired. Today, he has surgery and comes back to the farm.” 

Many farms and ranchers have three generations helping to run the operation, which means three generations want control. As a result, everyone butts heads to pull the farm in different directions.  

“Going from the horse to the tractor, we’ve made tremendous changes in technology, but we’re still in the 1950s in terms of how we make decisions. Everyone wants to be the one in charge, making decisions,” Junkin explained.

Transfer of wisdom

“I deal with a lot of farms where the patriarch is more concerned with himself and his ideas instead of being concerned with what’s good for the farm and other individuals on the farm,” Junkin commented.

Further, he says many times the patriarch makes all the decisions until his death.

“My grandpa called all the shots until the day he died. He apologized to my mother and said, ‘I apologize. I taught my boy how to work, but I didn’t teach him how to manage,’” Junkin explained. “Often, we see that wisdom is not transferred from generation to generation, which destroys the farm.” 

Working together

Further, Junkin says it’s necessary to work together and stop being hard on one another as the farms operate. 

He talked about several families where the only conversations between a father and son involved the father telling his son why something the son did was wrong. Eventually, the son got fed up and left the farm. Junkin said the father didn’t understand what went wrong. 

“If we kick a dog every time we see it, it’ll bite us or run away,” he said. “The same thing happens when we’re negative every time we see our family members.” 

Making decisions

When deciding whether or not to do something new or which direction to move, the family should decide together. Junkin said the future of the operation is at stake. 

As families begin to look at decision-making, Junkin said they must consider what can be influenced by decisions on the farm. 

“I look at the Serenity Prayer as a decision-making tool. It says, ‘God, give me the serenity to accept the things I cannot change, the courage to change the things I can and the wisdom to know the difference,’” he explained. “I believe in the power of prayer, but now is the time for action on our farms.” 

Junkin continued, “We can’t change Chinese tariffs or weather, but we can change the decisions we make as a family. We can change how our family makes decisions.”

To make the farm or ranch successful, Junkin says families must learn to work together.

“Tough times never last, but tough farm families do,” Junkin commented. “We have to make our farms and families bulletproof.” 

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Riverton – “To develop purpose, we have to step up, define our culture and articulate our values,” Padlock Ranch CEO Trey Patterson proclaimed. 

In his keynote address at Fremont County Farm and Ranch Days, sponsored by Fremont County Extension, Patterson stressed the importance of being intentional in decision making to steer the direction of ranch decisions. 

He stressed the value of excellent people, healthy natural resources, financial excellence and systems thinking.

The right people 

“Everything we do starts with excellent people,” Patterson said. “We have to make sure the loss of a single person doesn’t cripple the entire operation.” 

Patterson mentioned, in addition to ability, he hires people based on attitude, character and work ethic. 

“People are driven by personal mastery,” said Patterson. 

He used an example of people who pursue the mastery of crafts, such as leatherwork or music, and explained their own personal mastery is the reason they work hard. The same can be applied to their work on the ranch. 

“Our goal is to put people in an environment where they want to succeed,” according to Patterson. “In this environment, we promote life-long learning and an ability to succeed.”

Patterson noted the old-style “cowboy way” of being tough and not developing people won’t be effective in the long-run when it comes to keeping good employees. 

“Our goal is to create autonomy among our workers,” Patterson noted. “We don’t want robots just following what the person ahead of them is doing exactly.”

“As a manager, it’s very important to put people before logistics,” said Patterson. “Effective leaders get results through good people.” 

Natural resource 

management

“The worst thing we can do is get in camps of being conservation-driven or profit-driven,” Patterson commented. “But we can be both.We need conservation.”

Patterson noted sustainability involves giving pastures time to rest and different seasons of use across years and adaptive grazing management. 

“Ideally, we don’t want the same plant bitten multiple times as its growing,” Patterson said. “Multiple bites damage the plant factory, and it cannot be established as it should.”

Patterson commented planned and efficient grazing is key in terms of both conservation and profitability. 

“We have to be grazing efficiently and close to capacity,” Patterson commented. “I am not saying to overgraze but to graze smart and efficiently.”

“Production will suffer if we overstock,” he stressed. 

“Range feed quality is affected by grazing systems,” Patterson noted. “Planned grazing keeps better quality.”

Water

He also noted water management is a critical aspect of ranch management as a whole. 

“We must balance efficient range utilization and water management,” said Patterson. “For example, dry cows in the winter require less water and can meet some of their water needs in dry pastures via snow.”

“The benefits of effective natural resource management include increased carrying capacity, lower cost per unit, drought tolerance and improved livestock performance,” he added.

Financial excellence 

“Financial performance is critical for sustainability,” Patterson commented.

Patterson explained profit is essential in any operation, but to be profitable, excellent systems need to be in place. 

“Look at five year-rolling averages for return on assets, return on equity, debt-to-equity ratio and net income,” said Patterson. 

“From a management standpoint, if we don’t understand costs, there’s no way to know what we can and can’t leverage,” Patterson commented.   

He recommended using an accrual based enterprise system using cost-based accounting. He noted this tracks costs by ranch unit, crop and equipment type. 

Systems thinking

“We must be able to understand the cause and effect relationships on the ranch,” Patterson noted.

He used an example of making decisions after a disaster, such as a fire or drought. 

“We have to be flexible and have alternatives to make it through,” Patterson said.

As an example, Padlock Ranch had to adjust after a grass fire swept across their land several years ago.

“When we experienced a fire, we were forced to early wean calves and move them to the feedlot,” Patterson explained. “It wasn’t ideal, but sometimes we have to sacrifice short-term profitability to benefit in the long run.” 

“In the case of drought, we have to remember it is always more expensive to replace the cowherd,” Patterson noted. “But, sometimes liquidating is necessary. We have to base that decision on feed costs, current and expected market conditions and duration of the drought.” 

“We have to focus on what we can actually control,” Patterson said. “We can’t control natural disasters, but we can control how prepared we are and how we handle them.”

Callie Hanson is the assistant editor of the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..

Sheridan − Burke Teichert, longtime ranch manager and consultant, addressed various strategies in which ranchers can better manage their ranches and ultimately increase profitability.

Teichert, a featured speaker at the 2019 Wyoming Farm Bureau Federation Young Farmer and Rancher Conference, discussed key financial records and indicators, as well as specific strategies to be applied to maximize profits. 

Improvements

Teichert chocked up profitability to three basic means of improvement. 

“We have to increase turnovers, decrease overhead and improve gross margin to increase profit,” Teichert commented.

“To look at ranch profitability, we can’t just look at it through a per-cow or production-per-cow lens, we have to look at the whole ranch,” he said. 

“Looking at profitability on a per-cow basis can be extremely distorting to whole ranch profit,” according to Teichert. “Farmers do a great job at looking at the big picture, but ranchers have to be better.”

Financial records

Teichert said accurate financial records on the ranch are crucial in maximizing profitability. He recommended separating costs by category and keeping records of all sales listed separately.

“Anything tied to the land, people or the tools people need is an overhead cost,” Teichert explained. “Direct costs are almost always feed and medicine, and in most cases, feed will be the majority of this cost.”

When it comes time to sell cattle, Teichert stressed the importance of selling each cow to her highest ability. 

“We don’t want to deceive our buyers, or we lose trust,” said Teichert. “If she is just a cull cow that’s fine, but if she has ability beyond, we have to market her to her highest ability.”

Profit indicators 

With profit as a primary objective of most operations, there are certain indicators to be used to gauge progress, according to Teichert. 

“Total revenue is a good place to start,” said Teichert. “Once we determine total revenue, we can subtract direct costs and get our gross margin. From there, we can subtract overheads to determine net income.”

According to Teichert, total revenue is the product of multiplying average weight by price and then by head. 

To determine average weight, Teichert suggested looking at long-term indicators of weight, such as pounds weaned per acre, yearling gain per acre and total gain per acre. 

“The best determinant for price is the prices we have received over time,” according to Teichert. “A good record of sales over time becomes a good decision-making tool and allows us to see progress in marketing.”

To determine how many head ranchers have available to sell, they must track pregnancy rate, weaned calf crop percentages and acres per cow, according to Teichert.

Gross margin

“Once we determine total revenue, we can calculate gross margin, which is the difference between total revenue and overhead costs,” said Teichert. “Overheads are costs that don’t change when we add or subtract livestock. This can include equipment, facilities and labor.” 

Teichert explained gross margin allows ranchers to understand the cost of adding additional livestock to their operation. These direct or variable costs are most often feed and medicine. 

“Subtracting the overhead and direct costs of the operation from the total revenue will determine net income or profit,” said Teichert. 

Waging a war on cost

Teichert noted if producers can reduce overhead costs without changing direct costs or revenue, they will be more profitable. 

“The single best indicator for efficiency in overhead is cows per man,” according to Teichert. “It’s very likely operations have as many costs relating to the number of people on the payroll as costs related to the number of cows they run.” 

He chocked it up to the simple idea when we have fewer people, we have less stuff. 

“Over my career as a manager, it’s almost unbelievable the amount of overhead eliminated by reducing the number of people to run the same amount, if not more, cows,” said Teichert. 

“More than anything else, the war on cost is more of a mindset,” according to Teichert. “Once we get started, having good records is a big help in knowing how much we can do.”

Callie Hanson is the assistant editor of the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..