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Enterprise Efficiency

Understanding Ranch Businesses

The primary resource of grazing livestock operations is grass. In a sense ranchers are grass farmers who convert grass into marketable products such as meat and fiber. In order to make comparisons between different grazing livestock enterprises, a rancher must determine the return of each grazing livestock enterprise with respect to the amount of grass resource it consumes.


This measure is called “enterprise efficiency.” It is achieved by dividing the gross margin of a grazing livestock enterprise by the total GUMs consumed by that enterprise. Calculating enterprise efficiencies of different grazing livestock enterprises on a ranch is an important comparison tool for ranch managers. Ranch Vision automatically calculates the enterprise efficiency of each grazing livestock enterprise on your ranch.

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