Thursday, August 28, 2014

Managing Drought Risk on the Ranch

Ranch Vision and Strategic Objectives

The decisions you make before, during, and after drought should help move you closer to the vision and objectives that you have for your ranch.

A vision statement provides clear direction about “where the business is headed.” (Gates, Dunn et al. 2007) Dealing with drought is just one management aspect of the overall ranch business. Developing a ranch vision and strategic plan for the ranch makes it possible for the manager to fit drought planning into this larger plan.

The strategic planning process outlined in "Strategic and Scenario Planning in Ranching: Managing Risk in Dynamic Times" (Gates, Dunn et al 2007) includes:

  • conducting an inventory of ranch resources,
  • looking at the strengths, weaknesses, opportunities, and threats associated with the ranch,
  • establishing a vision,
  • establishing strategies to achieve the ranch vision, and
  • considering various scenarios that the ranch might face (like drought). 

With a Strategic Plan in hand, the rest of the steps to drought planning will fall into place fairly easily.  Producers who have gone through a planning process agree that it is worth the time.

You do not need to develop a whole ranch strategic plan on your own.  Your county extension or NRCS office, or private consultant, may also be able to help you think through your goals. Find Extension, NRCS, Consultants by State.

SWOT

Sample SWOT Analysis

Strengths

  1. Pasture health on north place is good
  2. Core herd is profitable
  3. Purchase of south place increases AUM's
  4. Custom grazing cattle on south place

Weaknesses

  1. Water holes on south place dry up frequently
  2. South place somewhat overgrazed
  3. Ranch debt/asset ratio too high

Opportunities

  1. Two calls asking for hunting leases
  2. New EQIP program
  3. Custom grazing partner interested in increasing cattle numbers

Threats

  1. High fuel prices raise cost of shipping hay
  2. "Above Average" likelihood of dryness this year

In business strategic planning, you may also complete a SWOT (Strengths - Weaknesses - Opportunities - Threats) process.  In planning for drought, it may be helpful to complete a similar process to identify potential drought management strategies.

The strengths (S) and weaknesses (W) originate from within the operation; they are internal factors that influence ranch or farm performance.

The opportunities (O) and threats (T) originate from outside the operation; they are external factors.

The Ranch Inventory will provide useful information for completing the SWOT analysis.

Source:Strategic and Scenario Planning in Ranching (Gates, Dunn et al.) (pdf)

 

Next Step:  Taking Inventory

Drought Plan Worksheet

Additional Resources

Holistic Management - A Whole Farm Decision-Making Frameworkby ATTRA National Sustainable Agriculture Information Center

"First and foremost, build a good system for your place. The first thing you’re going to do is look at your operation, make some goals, some plans... That is probably what sets most operations apart from being run of the mill to a quality operation. If you’ve got the goals, you’ve got your plan, then you can start picking out what do if this happens, what to do if that happens. But for gosh sakes keep it as simple as you can because if you get it too complex it overwhelms you..." (Nebraska Rancher)


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