All right, so there's a few just starting classic comments here. If you don't know where you're going, any road will get you there.
If you don't know where you're going, how will you know when you get there? And my favorite of all from the great Yogi Berra, if you come to a fork in the road, you got to take it. All right, so this is all about finding direction in what you're doing.
So we're going to start out talking about goals and objectives. And as the schools progress, you will get to know me a little better. That's why we didn't do a whole long big introduction on me, because you'll find out a lot of stuff about me.
useless trivia. I say it's useless trivia but some at some conferences they have trivia contests for people to win various stuff and it's the obscure things that people say in their presentations that usually come into that trivia.
So we're going to talk about setting goals and how to express it. So we got this guy here and he says, I want to be a dairy farmer. Actually, obviously he's already a dairy farmer but at one point in time he said, I want to be a dairy farmer.
And we can argue about whether or not this is a good goal. You know, a year ago the state of the dairy industry was so bad that why on earth would anybody want to be a dairy farmer? Alright, so that's that that's his goal but what does it really tell us?
It doesn't tell us anything about the nature of the business, when it's going to happen, anything like that. So rather than just thinking about having a goal somewhere in the back of your head, We want to develop gold statements that actually mean something.
When are you going to do this? How many cows? What kind of a system? How much investment? All of those are considerations that have to come into play when you decide that you're going to go into this farming business.
David, right here, he said he bought a place a year ago. He's had a career in the oil fields. And I'll put you on the spot a little bit later on. I'm not not first thing in the morning, but I'll do it when I put everybody else on the spot, too.
All right. So that's a real vague statement. I want to be a dairy farmer. Now, look at this one. I will have one beer tonight. And again, we can argue about whether or not this is a good goal, but it is a good goal statement.
Why? Because we can measure it. We know when it's going to happen. We can validate that we have achieved it. That is a good goal statement right there. And if you've gone to very many meetings of any kind of the last 30 years, you have probably been hit with the idea of smart goals.
Smart is an acronym. And we're going to talk a little bit about what that means. So S stands for specific. I want to be a grass based dairy. Measurable is the M milking 60 cows. Attainable is a realistic goal that you can actually make happen within the context of your resources, your finances, your skill sets, your lifestyle expectations.
All of those things are important considerations that determine whether it's attainable. And we're only talking about one person right now. Let's bring two people into the equation. And see if these goals.
Work together, are they relevant? Are they related? Some people. related, some people say relevant, some people say realistic. You know it's a beautiful acronym, you can put anything in there you want.
But are they in conflict with one another? And often in family settings and multi -generational farm and ranch businesses, we find that there are goals in conflict. We have couples, husbands or wives or significant others who have never really talked about their goals for the farm and find when they do sit down and talk about it, they are just you know butting heads.
They don't have the same end point or vision in mind. And so if you're one person by yourself, it's one thing to set goals that are exclusive to you. But as soon as other people come into this arrangement and relationship and this business, then we have to start balancing those goals out.
And then critically important is trackable. time -related timetable. Yeah, got to have timing on it. You know what we call a goal without a timetable? A dream. It's just a dream. It's not going to happen until you put some specific times to it.
So here is a goal statement. I want to have a grass -based dairy farm be milking 60 cows by the spring of 2020 with a dead asset ratio less than 50%. It's specific. It is measurable. It is trackable.
Is it attainable becomes the next question and maybe this less than 50% dead asset ratio is part of the attainable part of it. And now the relevant part of it. Who else is involved with this and do they want to be milking cows also?
So as I said, it meets the criteria of being a good goal statement. And so we start thinking about, well, business goals. Should we have personal goals also? Where do we start with all of this stuff?
And to me, the starting point is this one right here. It is a lifestyle goal. How do you really want to live? Where do you want to live? How do you want to raise your kids? What do you want to feed your kids?
What do you want to do in your spare time? And this, and believe it or not, farming and ranching, if it is structured right, there is spare time. You can do other stuff, even dairy farming. You structure the business, right?
There is an opportunity for spare time. So the lifestyle choices to me are important. Sometimes people ask me, why did you ever leave Missouri and go to that cold, dry, God forsaken place of Idaho? You know what the answer is?
It is a 100% recreational lifestyle move. Those of you who are in here before, if you are watching the pictures, most of those pictures were my front yard or my backyard there's a few from other places around but that's what I went to Idaho for wasn't because it's a better place to raise cattle it isn't because I had any grazing related goal at all and you'll see what our written goals were a little bit later on but it was entirely a lifestyle move if my life's ambition was to be in the cow business I never ever would have left Missouri because I'm still not convinced there's any better place in the United States to be in the cow business than Missouri so then we have this financial question what is it going to cost for you to live the way that you want to be in the place that you want to raise your kids the way you want to go on those occasional vacations for some people you know that's their lifestyle it is spectacular scenery and a really nice house and you know what unless you got a lot of cows you're not going to do that on commodity cow calf there are certain enterprises that will not support particular lifestyle choices.
So we have to look at the scale, the product, how we're producing and marking those products. Those are financial decisions. Those are financial planning that has to be in place. And remember, the point of why we're doing it is so that we can live the way that we want to live.
So there's a financial foundation that has to be out there also to allow us to live the way that we want. What do you want your environment to look like? Some people are very happy being in a Manhattan office on the 86th floor, long as we have a corner office with two glass sides.
You don't wanna be in a cubicle. I mean, if you're in a cubicle on the 84th floor in Manhattan, you just as well be in a cubicle in a metal building in big timber mines. Actually, I think you'd be way off being in a cubicle in big timber Montana, because when you walk out the door, then the real world begins.
Anybody besides Brandi, ever been to big timber Montana? Yeah, you know what I'm talking about. Yeah, right? Anybody know what Montana's tourist slogan is? The last great place. You know what Idaho is?
Idaho is what Montana wishes it could be. I don't know about that. Parts about the mine. It depends on where you are. Yeah, it depends on where you're at. Okay. So we think about how do we structure our business to create the working environment that we want.
Are we content with exploiting our resources and degrading the land? Are we content with just maintaining it in the state that it's in? Or do we wanna go down the path of that R word, the regenerative route, and make the land better than it was when we acquired it.
What a radical. cold, green, tree hug, and environmentalist statement. I wanna make the land better than it was when I got it. And I cannot, even before I got into this business, I cannot count the numbers of farmers and ranchers over the years who I've heard say that.
I wanna make this place a better for my kids than it was when I got it. That is a bold regenerative agriculture statement. And it is a conscientious view that we can have an impact on the environment in which we live.
And we sure wanna make that a positive impact. And after we do all of those things, then we figure out what's the production system gonna be? How are we going to accomplish this? The worst reason to be in the beef cow business is because that's what my granddaddy did.
It may not be the best use of your resources. It may not be the best opportunity in this particular economic climate. It might be. I'm not saying that there aren't places where cow calf is not absolutely the best choice that you can make.
But don't be in a business, whether that's dairy farming, cow farming, growing potatoes, whatever, because that's what we've always done. Because the economic climate changes, the environmental climate changes, people's lifestyle expectations change.
And so we need to adapt to those changing demands and requirements. You know, if you stay and continue to do what you've been doing for the last five years, 10 years, 20 years, you are working towards something we call the default future.
It's just the path that you're on. And it might be flat like that. Now, you might have a dream in your head that you wish you were somewhere different than where you are now. I wish I was making more money.
I wish I had more time. I wish, I wish, I wish, I wish. That's the future that you dream of. And if you start making some choices, making some decisions, writing down some goals, maybe you can go there.
Now, I say that's your default future, but this is also your possible future. If what you are doing right now is not making any money, if what you are doing right now is degrading the landscape, if what you are doing right now is tearing your family apart, then the possible future is probably down here.
It's not even up at this point. All of this is stuff that we can control. All of this is stuff we can control. can control. Once we make this decision, then we're going to do something differently. Anybody know this one?
Know what those words are going to be? The 10 most powerful two -word, two -letter words in the English language. Some people don't like this because it's short circuits, some of their foundational belief systems.
When I actually grasp this, now it's kind of a life -changing thing for me. And this is what those are. If it is to be, it is up to me. Your future is in your hands. You can have that default future.
You can work towards that dream. So that's my wife and I. So why did I leave Missouri? and go to Idaho. There's a real simple explanation. You ought to be able to look at me, see that I'm male, see what my approximate age is and you should be able to say what was the reason that I left Missouri and went to Idaho.
Anybody going to say it? Elk? Go hunting. Well we'll see. I didn't retire. I never have retired. It's called midlife crisis. Alright, so midlife crisis rolls around and you start thinking about who you once were and where you are now and stuff like that.
When I was 20 years old, I knew exactly who I was and what I wanted to do in life. I wanted to live in the Rocky Mountains and write stories. I grew up a flat land Illinois crop farmer. I got over it.
When I was 15, two of my older brothers and I went to Colorado, camped in the Rocky Mountains. First time I'd ever seen those mountains and from that day on, I wanted to live in the mountains. I said I wanted to write stories.
I started writing epic fantasy novel when I was in my mid -teens. Occasionally I still pull it out and work at it. That was the core of my being was that other world that I was writing about. And then life, marriage, family, career, all got in the way.
And when I was about, let me think about this for a minute. I hope you're enjoying the presentation and we'll jump right back in. But I wanted to. First, remind you to visit the show notes for freebies, deals, and more.
While you're there, don't forget to join our email family to stay up to date on all the current events. Now back to the show. Parts of my life, but I realized what I really wanted to do was live in the Rocky Mountains and write stories.
I'm gonna show you what our goals were. Get out of debt. So we had a nice farm in Missouri. We had actually paid for it once. Then we built the house. When the fourth kid came along and we'd been living in a just 1 ,200 square foot, you know, old farmhouse, we decided we needed some more space.
So, and always wanted to live in a log cabin. So we decided we'd build a log cabin, which of course turned into a log home. And because the rooms in the old house were quite small, you know, you say, well, you know, let's.
let's expand that out another couple feet and let's put in a good utility room and all that. And we ended up with a 3 ,400 square foot log home that cost a couple hundred thousand dollars. And I am given to understand that I'm not a pleasant person when I'm in debt.
Now a farm is one thing because if you're working the farm right, it's paying off its debt. A house does not pay any debts unless it's appreciating in value and you know that you're gonna sell it. So the house made me an unpleasant person.
Very nice house, just too much debt. So this is the first time in my life, by the way, that I ever wrote down a goal. This was 2002, 46 years old. First time in my life I'd written down a goal. I'd been given a talk like this telling people, oh, how important it is to have goals and all that, but I didn't actually do it.
I just knew that everybody says you gotta have goals to be effective. So I told people the same thing, but I didn't do it. In 2002, we actually wrote down goals. Get out of debt, stay out of debt. So that meant I wasn't gonna go to the Passimari Valley and buy a $10 million ranch.
I wanted to live adjacent to public land. I think public land, and you will never ever hear me say government land or federal land. That two and a half million acres out my back door, I own that. You own that.
We share it with 320 million other Americans. We all own that land. I got a mountain. I wanna have a mountain out the back door so that if I get up in the morning and say, you know, I'm gonna go to the top of the mountain today, I don't have to organize myself to be gone for five days, drive a thousand miles to get to the first mountain.
I just wanted to be able to walk out the back door. go to the top of the mountain. And as somebody said, ready access to good hunting and fishing. There's nothing in there about cows, there's nothing in there about grazing, there's not even, well I was going to say nothing about money, well the debt certainly is.
And so that's that's why we moved is so that I could go to the mountains and write stories. Now I still had to make a living somehow and that's why I do what I do. So I had had this dream since I was 15.
I think that's 27 years from the time I was 15 to the time I was 42 that I always dreamed of living in the mountains but I never got there. In 2002 kind of midway through the year we wrote these goals down.
April 1st of 2004 I was living in the mountains and started living the dream. that is what I do every day that I'm at home is I'm out there living the dream. Why? Because we wrote it down and said this is what we're going to do and then when you write those down all of your attention you know adheres to that point and you work at it.
So that was the log home in Missouri. The property we bought has a 700 square foot homesteaders cabin on it partially modernized. We lived there the first six months then we didn't but it did force us to change you know some of our lifestyle.
Where we live it's called the Passimari Valley this is Lemhi County over here this is Custer County. White is privately owned land the Orange's Bureau of Land Management and then Green's National Force.
94% of our county is public land. I love it. I love it because I can hike anywhere I want on that. I can camp out anywhere I want on that. I can hunt anywhere I want to on that. There's not a lot of water so I can't fish anywhere that I want to but where there is water I can fish anywhere that I want to.
We can establish a mining claim. There are areas where we can go and cut logs for building stuff. It does cost you know we have to pay four dollars you know for a tree that we can turn into a log and stuff like that and then harvest it and bring it out and all that but yeah that's living the dream.
Right there's where the house sits that's 6 ,000 feet that's 10 ,200 back there so yeah literally I got a mountain out the back door. We fish, we hunt, we enjoy life. We created our future. because we made decisions about goals.
So when you create your future you can build in these things here the free time, the family time, the hobby time, the education time, the mentoring someone else time. That's why I say farming and ranching does not and okay so we sold our herd and we sold our farm in Missouri we sold our herd in Missouri.
I did not expect that I'd ever be involved in day -to -day ranching operations again and now I manage more land area, more cattle than I ever did when we have our own place. Huh, just living the dream.
So we look at a lot of families and when I decided to go into the consulting business I thought I would design grazing sales for people, make recommendations on range improvement, pasture improvement, maybe some suggestions on herd structure and genetics and stuff like that.
You know what I find myself doing? Family mediations, interviewing managers, getting managers fired, sorting out family disputes. I don't enjoy that part of the job a lot, but we look at these happy ranch families and then we have to think about, you know, what are they really saying?
The old man's there and he says, here's what we're gonna do. The 40 -year -old -something son who has never made a management decision in his life, he is thinking, the old geezer's gotta die someday.
And then the daughter -in -law, who maybe she's from a successful ranch on the other side of the mountain range, she's thinking, what doesn't he ever ask my opinion? From the outside, we see a lot of what we think are good, solid family values and relationships.
And some of them are, but a whole lot of them are not. And the ones that are, what I have found through my experience, and I've been 17 years in the consulting business now, the families who are tight and unified, one of the things they have in common is, guess what?
Written goals that everybody agreed to and they work towards. The families that are in chronic discord, they just do not have a fixed plan of where they're trying to go. And so everybody's doing their own thing on it.
So these are important things. Agreed upon by everyone in the operation, written down, and then very importantly periodically reviewed and updated, because you know what, sometimes you can set a goal and you find out this really isn't realistic in the context.
of our resources or our family dynamic, and you might have to adjust it. Now, communicated clearly from management to labor, and I'm sure there are several of you in here who, you know, think of yourselves as being a one -person operation management labor.
Well, I'm both of that. You know what? It is terribly, terribly important that if you are both management and labor, that you communicate between those sides of the business. So in the consulting business, my office time rate is $75 an hour.
Flood irrigation. I love going out in the spring with my tarp dams and a shovel and put water where it hasn't been before. I am still working so hard to make water run uphill. One of these days, I'll accomplish it.
I will make water run uphill. I enjoy doing that. What's that job worth? I can hire a Mexican. and this is not said disparaging in any way, most of the grunt farm and ranch labor where we live is Mexicans.
I can hire a Mexican to do that for $10 an hour. Economically, it would make way more sense for me to hire someone to do that work so that I could stay in the office and crank out those consulting reports at 75 bucks an hour, but you know what?
I need the time on the shovel to maintain my sanity, and we all have those things. There are the labor part of this business that we just love doing it, and we wanna do it, and we don't wanna give it up for someone else to do it.
The management side of your mind, the management half the brain sometimes has to step in and say, no, no, no, no, no. That does not make sense. I need to be doing this, marketing our products, doing some strategic planning, sitting at the spreadsheet, shoeing the horse, feeding the hay, moving the water.
Someone else might be the one who should be doing that work and not you. So when we think about this management, communicating to labor, don't think that is just when you have multiple people in the business.
It is the division of management and labor within yourself that you sometimes has to manage. Okay, so everybody going the same direction on your place? I don't know. We have two things that we're gonna talk about, strategic goals and objectives.
So strategic goals, these are the big picture. This is where do we wanna take this business we're in now, and where does it need to be five, 10, 15, 20 years down the road? This is the point why I ask how many people in this room have actual written strategic goals for your farmer ranch.
Three people I mean you don't have to be embarrassed that you have these things it's a good thing three people out of 21 admitted yeah maybe three and a half to four and if you think about it a lot of people you know I don't have it written down but it's solidly in my mind and I'll offend a few people from time to time because I sometimes do get crass in my language I'm gonna say bullshit you might think that it's solidly in your mind but your mind is very fluid and it subtly changes things well that's not really what I meant and when it's written down it's a little more firm guide so guess what you get to do now For those of you who have never written down your goals,
this is where we're doing it. Five minutes, three strategic goals for your business or your personal life or one for your personal life, two for your business, two for your business, one for you. You know, write it down.
But everybody, we need to get some goals written down now. All right. Then the next layer that we have here is what I call tactical objectives. And that's the, what are you going to do? You've established this goal now.
How are you going to get there? So this is the roadmap of how you're going to get to the goal. And so if we come back to our dairy example here, we've got the goals become a grass -based dairy. And I could lift out the 60 cows and all that grass.
So we need to buy 40 Springer heifers by February 1, complete the milking parlor by March 1, subdivide the pastures for 12 -hour rotation, April 1st. So here's the step by step. This is what we have to get done to get there.
And it's very important that for each of these here, you have a budget for it and a cash flow plan. And on the, I think it's, it might be the very last session on Friday for those of you staying for that school, you know, we're going to go into cost -benefit analysis.
And when we look at a project, you know, I can take almost any kind of pasture improvement or ranch improvement project, and I can show that in the long -term that would be a profitable, it would improve profitability.
But there's two sides to doing these improvement and development projects. One of them, is it financially feasible? Is it economically valuable? it and the other one is how are you going to pay for it and for most of us that's a cash flow situation.
The types of ranch improvements that we're going to talk about over the next few days there aren't very many bankers that lend money for those type of projects because there's no liquidity to them and they don't necessarily add to the capital value of the land in the prevailing real estate market and so you you know we might you know do a budget and say okay in seven years this is going to you know pay out.
A lot of us don't have seven years of flexibility so we got to figure out how do we do something that in a single year or maybe at most three years is going to be completely recover our investment. Now if you make an investment in some kind of ranch improvement like stock water development fencing.
those sorts of things, they're going to have a much longer life than the horizon of which you're trying to recover your capital investment. So if you make a, you know, $50 ,000 investment in ranch improvements and you and it does in fact raise productivity and increases your gross margin, if you pay that off in two years time, the next 15, 20, 25 years that you're managing the place and that tool is still working for you,
you've got a better margin in all those future years. Like I said, we can pencil it out and say, oh yeah, in seven years and 15 years it pays off, but we got to get it paid off a whole lot faster than that just because it's our money tied up in there.
So we do this here. I am very much about planning and crunching numbers. I am a spreadsheet geek. I don't know how I became that way. Well actually I do know a lot of the tools that I use in my consulting business I actually developed in the early and mid 80s and I've just been refining them.
When we, you know, were making a decision about to buy more property to expand our operation in Missouri, I had to figure out whether or not this was going to work and so that's when I started, even though, you know, I'm a biologist basically, I'm not an economist.
Hey, I made one C in college and that was an Econ 101. And you know why that happened? Because I had already taken like three courses in Ag Econ and agricultural economics is so screwed up with government interference and all that.
If you learn your first economics in agriculture, economics, real economy doesn't make sense to you. So yeah, if it won't work on paper, it probably won't work out on the ground. So make sure that it looks like it's going to be feasible on paper and go from there.
Alright, so tactical objectives, five minutes again. You can do this, you know, different ways. You can take one of your goals and write three tactical objectives that are going to move you towards accomplishing that goal, or you can take each one of your goals and write out a first step objective.
So this is something that basically when you go home from this school, what are you going to do? What can you start with to get you moving towards your goal? next week. I hope you enjoyed this presentation.
Well, check out the episode notes and always remember the advice from cows and be outstanding in your field. See you next time. You
