This visual is meant to show how increasing an enterprise’s efficiency can increase ranch profit.

Enterprise efficiency refers to how well an enterprise converts resources into gross margin. The basic resource for grazing livestock enterprises is grass. A rancher is essentially a grass farmer seeking to convert the grass resource into marketable product. 

Ranch Vision measures grass in terms of the Net Energy it provides to grazing livestock. One Grazing Unit Month (GUM) is 304.375 Mcal of Net Energy. This equals 10 Mcal of Net Energy per day for one twelfth of the year. It is roughly equivalent to an Animal Unit Month(AUM).

The best measure of efficiency for grazing livestock enterprises is gross margin per unit of grass consumed. Ranch Vision determines the enterprise efficiencies for all grazing livestock enterprises and presents them in terms of gross margin/(GUM). This value shows you  how many dollars an enterprise returns per unit of grass the enterprise  consumes. Your enterprise efficiency report is critical for comparing and optimizing grazing enterprises. 

Using the Scenario Feature, you can perform instant cost-benefit analyses to assess the impact on enterprise efficiency for virtually any proposed management change. 

1. First, use the Scenario Feature to create a duplicate of your current plan. 

2. Second, let the program know  how you expect this management change to impact your other ranch variables. Enter these changes in your new scenario. 

3. Finally, compareEnterprise Efficiency reports between your current ranch plan and the new Scenario. This will let you see how any management change will impact your ranch profit. 

For example, say you’re considering  buying a vaccine to reduce calf scours. You know the vaccine costs $1.22 per cow, and should increase weaned % by 2% and increase weaning weights by 10 lbs. In your new scenario, you adjust your cash direct costs, weaned percentage, and weaning weights. You then compare reports for this new scenario to those of your current ranch plan lan to see how the  vaccine will impact enterprise efficiency–as well as herd numbers, gross margins, cash flow, profit and loss, grazing demands, etc.

Let’s take another example. Suppose you want to consider a supplemental feeding program for replacement heifers.You expect the cost to be $37 per heifer and you expect the program to increase conception rates by5%.  To run this analysis, all you have to do is make the appropriate adjustments to direct costs and pregnancy percentages and then compare the results between your current plan and the new scenario.

By increasing enterprise efficiency, you will increase the return for every unit of resource consumed. For grazing enterprises, this means more dollars for the same amount of grass.