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Expand or Contract Enterprises

How To Manage With Ranch Vision

You only have so much grass on the ranch, so it’s important to use that grass in the most profitable way possible. If you aren’t using all your grass resources, you can best increase overall profit by expanding your most efficient and productive enterprises. Shrinking or eliminating non-productive enterprises will free up additional resources. Use the Scenario Feature to plan how you will expand or contract enterprises, and over what time frame.


In your new scenario, update inputs such as annual purchases, % retained for stockers, % retained for breeding replacements, cull percentages, etc. to test out expanding or shutting down enterprises. Then use your reports and the Comparison Feature to compare outcomes. 


For example, say you want to gradually expand your cow-calf enterprise to take advantage of underutilized grass. Open a new scenario and examine how increasing the % of heifer calves retained for breeding (Management section), increasing annual purchases of new breeding cattle (Purchases section), and/or decreasing your cull percentages (Inventory Section), etc. would impact future grazing demands (Grazing Demands report)  and all the other aspects of your ranch business.


If you want to gradually  shrink or shut down your cow-calf enterprise, evaluate how decreasing the % of heifer calves retained for breeding (Management section), decreasing annual purchases of new breeding cattle (Purchases section), and/or increasing your cull percentages (Inventory Section), etc. impacts future projections. Compare scenario reports to your current plan to help you identify the best path forward.


What if, instead of gradually making a change, you want to grow or shut down an enterprise immediately? Think of this as a transfer of assets. You’re exchanging cash, savings, borrowed funds, and/or debt for livestock. You can test this option by adjusting your Inventory numbers (Inventory section) as well as your assets and/or loans payable (Assets section and Additional Costs & Income section).


For example, let’s say you want to expand your cow-calf enterprise right away  to take advantage of some new grazing ground that just became available. All you have to do is create a new scenario and increase the numbers in your cattle breeding herd until your Grazing Demands Report reflects the correct level of grazing. Next, determine the cost of acquiring those additional animals. Then make a comparable adjustment  either by subtracting from your current assets (Assets section) and/or by taking out a loan (Additional Costs & Income section).


If you wish to evaluate contracting your cow-calf enterprise immediately, open the Scenario feature and decrease the numbers in your cattle breeding herd as desired. Determine the amount you’ll receive from selling those animals. Then, increase a current asset (Assets section) and/or reduce outstanding debt (Additional Costs & Income). 


Your new scenario reports will reflect these transactions. Compare reports between  your current plan and the new scenario to determine the most profitable move forward!

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