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301: Planning Ahead — the Next Five Years Won’t Look Like the Last · CattleUSA Daily

• 0:03
  Welcome to the Cattle USA daily. Podcast your go to source for.
• 0:07
  The latest livestock markets, industry insights and the update
• 0:10
  shaping agriculture today. I'm your host Lauren Moylan, a
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  passionate advocate for agriculture, here to keep you
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  informed and connected. Now let's dive into today's
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  episode. Today I want to talk about
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  planning outlooks, looking forward, planning for the next 5
• 0:33
  years. But here's the thing, there is a
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  little sneaky trap that a lot of ranchers I know fall into, and
• 0:40
  that is we plan for the next 5 years based off of the last
• 0:45
  five. We look backwards at what prices
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  did, what did rainfall do? What did input cost, cost, What
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  worked recently? We assume that patterns that
• 0:56
  happened over the last five years will continue.
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  But agriculture is cyclical, Markets move, her numbers swing,
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  interest rates adjust, weather shifts, technology advances and
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  labor dynamics change. The next five years will not
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  look like the last five. And if you plan forward using
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  backward assumptions, you build fragility into your operation.
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  Today we're going to talk about planning forward intentionally
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  instead of reacting later. Reactive planning says we'll
• 1:32
  just see what happens. We'll adjust when we need to.
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  We've survived before. But strategic planning, on the
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  other hand, asks what are the trends?
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  Where is risk increasing, where is margin compressing?
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  What constraints are tightening, and what flexibility do we need?
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  The ranches that thrive long term don't predict perfectly,
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  but they position themselves intentionally.
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  They build in options, they build liquidity, they build
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  resilience, and they build clarity.
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  I want you to take a second and I want you to look at the market
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  cycle that you're walking into. Look at herd inventory, look at
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  beef demand, look at the export markets, look at interest rate
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  pressures, look at consumer spending trends.
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  Herd rebuilding phases create different margin structures than
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  liquidation phases. High cattle prices today do not
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  guarantee high cattle prices five years from now.
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  So planning forward means that you were asking yourself if
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  prices soften, can we handle it? If feed spikes again, what's our
• 2:37
  exposure? If interest rates stay elevated,
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  what does that do to expansion? What if drought returns?
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  What is our destocking plan? Because hope is not a strategy,
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  but margin protection is. Now when we look at capital
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  planning over the next five years, most ranches plan capital
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  year to year. Five year planning forces you to
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  ask different questions. It forces you to ask what
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  equipment will age out, What infrastructure needs investment?
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  What water systems need upgrading?
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  What fencing improvements do we need to do to increase grazing
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  flexibility? What debt will mature?
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  What refinancing risk exists? If you know you'll need a new
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  tractor in four years, start planning for it now.
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  If you know facilities limit labor efficiency, start
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  redesigning them early. If you know that debt service
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  peaks in three years, build your liquidity now because five year
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  thinking removes panic pressure. When we're rebuilding our herds
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  and herd designing for the future, I need you to also ask
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  yourself, is our cow type aligned with where feed cost is
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  trending? Is our cabin window sustainable
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  for labor? Are we selecting for efficiency
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  or to boost our ego? Are we managing frame creep?
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  Are we tracking reproduction aggressively Because five years
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  is enough time to reshape cow size, tighten fertility
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  standards, shift your calving season, improve your forage
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  matching, or rebuild her genetics intentionally?
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  If you don't shape your herd intentionally, drift, we'll
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  shape it for you. Labor.
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  Labor is a hot topic, and labor availability is not improving.
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  So I need you to also ask yourself, can this ranch run
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  without one person? Are we designing around burnout?
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  Are our systems overly complex? Is enterprise stacking creating
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  strain on our operation? Because five year planning means
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  simplifying where possible. Maybe for you that means fewer
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  enterprises, a tighter cabin window, redesigning feeding
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  systems. Maybe you need to look at
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  automation in certain areas or a better facility flow because
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  labor sustainability, it is a competitive advantage,
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  especially as we go into the next five years.
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  Now let's talk about land because land values are going to
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  continue to fluctuate, lease rates are going to change, and
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  competition is going to intensify.
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  You need to be asking yourself, do we expand our herd or do we
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  need to improve our efficiency? Do we need to lease more land or
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  should we be looking at optimizing current acreage?
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  Do we buy land or are we focused on reducing debt?
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  How about do we diversify revenue on existing ground?
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  Expansion in and of itself is not always growth.
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  Sometimes margin density is growth.
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  So five year planning is going to ask what is our target
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  position? Is it bigger, leaner, more
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  diversified, more focus? Ask yourself these questions.
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  Now let's talk. Talk about finances and
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  liquidity. Because liquidity of your
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  finances is oxygen. Five year planning requires A
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  realistic cash flow modeling, conservative leverage
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  assumptions, emergency reserve building, risk management,
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  utilization and margin based decision making.
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  If you plan for best case scenarios only volatility will
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  punish you and it will punish you hard.
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  You need to build build margin buffers starting now, talking
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  about something no one wants to talk about.
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  And that's succession and generational timing.
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  Because five years actually is enough time to define your
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  ownership structure, phase management, transfer, clarify
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  your equity strategy. Maybe you need to develop the
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  next generation skill sets or restructure your compensation
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  plans. Because succession is not a
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  someday event, it is a timeline. And if you don't define the next
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  5 years, transition becomes pure chaos.
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  Now there's a question that changes everything.
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  If you were building this ranch today from scratch, knowing what
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  you know now, what would you design differently?
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  Because five year planning is not about prediction.
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  It is about positioning. It is about asking yourself,
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  where do we want to be? What needs to change to get
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  there? What risks must be reduced and
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  what strengths should be doubled down down on?
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  Because the next five years will not look like the last five
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  years. Markets will move, weather will
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  shift, cost will fluctuate, labor's going to tighten and
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  technology will evolve. The question is will your ranch
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  be positioned intentionally or will it be reacting constantly?
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  Because planning forward isn't about being pessimistic, it is
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  about being disciplined and discipline compounds, especially
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  when we're looking over the next five years.
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  This is the Cattle USA Daily podcast.
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  I'm your host, Lauren Moylan, thanks for listening to another
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  episode. We will see you all next time.