Enhance Economic Opportunities for Agricultural Producers
Computer Software Tools to Enhance Ranch Profitability
Impact Nugget
In rural areas throughout Arizona, Nevada and Utah, Arizona Cooperative
Extension has provided hands-on instruction in using computer spreadsheets
for ranch management; program outreach has included Hopi, Navajo, San
Carlos Apache, White Mountain Apache, Tohono O’Odham, Supai and
Havasupai Native American communities–essentially all of the tribes
involved in raising cattle in Arizona. More than 1,400 ranchers received
instruction in rural areas from September 2003-September 2004.
Issue
The ranching business is by nature multifaceted, with expertise required
in three main management areas: range, financial, and livestock production.
The success of the ranching enterprise is dependent upon the operator
having skills in each of these areas. Given that many ranchers are in
the ranching business because they treasure the lifestyle, financial
management can often be neglected. Yet it is the area where the rancher
can define the strengths and weaknesses of the operation to ensure the
ranch will still be in the family for the next generation. Concerns
over the proposed Animal ID system, COOL (Country of Origin Labeling),
price uncertainty and few pounds of product to sell during the recent
drought have made the need for understanding and analyzing the financial
area very important for the Arizona rancher. Although the drought situation
as temporally eased, the cost of potential replacement animals and the
uncertainty of restocking have made several ranchers in the state reevaluate
whether they can or should get back in the ranching business.
What has been done?
Cooperative Extension continues to address ranch financial management
by providing hands-on computer-oriented workshops. Today’s computers
and software provide relatively easy tools for recording and analyzing
ranch management decisions. With appropriate inputs, the computer can
numerically and visually evaluate how business decisions have the potential
to threaten or enhance the financial health of an operation. However,
using computers can be a barrier to many who for one reason or another
have never had the opportunity to learn how to use them. Three UA faculty
have developed diagnostic software tools that pinpoint problems for
ranch profitability and assist in record keeping, cash flow analysis,
drought mitigation options, retained ownership, and evaluating the decision
to restock the ranch after the animals have been removed.
Each software tool has been designed and written with the input of
ranchers so that it is user-friendly and relevant to Arizona ranchers.
Data used for the computer workshops was taken from production figures
for the UA’s V Bar V Ranch. The ranch restocking software evaluates
the costs and returns associated with variations in buying replacements
or waiting for replacements to come from within the herd over time.
Training is conducted using a 20-machine wireless-portable computer
lab. This mobile lab allows faculty to reach under-served communities
that normally do not have access to computer facilities.
The program outreach focuses on scheduling several workshops in remote
communities where little, if any, hands-on ranch management training
has occurred. Even though workshops were brought into their “back
yards,” respondents in under-served rural areas indicated that
they still drove an average of 40 miles to attend the computer workshops
and several drove 100 to 250 miles. One respondent who drove 80 miles
had never attended a computer workshop because “one has never
been offered in my community before.”
Impact
From December 2003 through September 2004 this program was delivered
as an oral presentation to a total of 1,431 participants at several
conferences. Of the 1,431, more than 40 percent (406 people) received
hands-on training computer workshops throughout Arizona, Nevada and
Utah. Program outreach has included Hopi, Navajo, San Carlos Apache,
White Mountain Apache, Tohono O’Odham, Supai and Havasupai Native
American communities–essentially all of the tribes involved in
raising cattle in Arizona. When the workshop was presented the 17th
Annual Southwest Indian Agricultural Association (SWIAA) Conference,
which includes Arizona and Nevada tribes, the Nevada Tribal Agricultural
Committee, representing the 26 tribes in Nevada, requested more Planning
for Profitability workshops for their members. During the past year,
additional information on the potential for agri-tourism and specialty
agri-product market opportunities was added to the workshops in an attempt
to provided alternatives which may be available to the Arizona ranching
community.
Questionnaires were sent to 68 ranchers in underserved audiences in
2004. Of these, 44 percent reported that they had used one or more of
the computer spreadsheets in making decisions for their operations.
One rancher who had never used a computer before and who had been performing
all of his ranch management accounting by paper and pencil was so excited
about the spreadsheet templates that he wanted to buy one of the computers
in use at the workshop. A couple of elderly participants said they used
to make all of their decisions with pencil and paper but the workshop
convinced them that it was time to switch over to doing their spreadsheets
on the computer.
“It gave me a better understanding of how and why we need to do
a proposed budget for better management.” –workshop participant
“Will follow expenses more closely. The workshop helped show how
and what.” –participant
“Very informative, I hope more people will benefit from these
workshops” –participant
Funding
USDA: RMA
The Western Center for Risk Management Education
Arizona Cooperative Extension
Contact
Trent Teegerstrom, research specialist
Department of Agricultural and Resource Economics
The University of Arizona Economics Building, 403F
Tucson, AZ 85721
Tel: (520) 621-6245; FAX (520) 621-6250
Email: tteegers@ag.arizona.edu
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