RANCH MUSINGS: The law of unintended consequences, and its effect

To be successful, you must answer these questions which are not easy

I remember a workshop for ranchers 20 years ago that began with question about “what is your product?” not just “beef” or “cattle” and what is your market like?

To be successful, you must answer these questions which are not easy.

Big national marketing surveys may be helpful and one’s own local surveys may be more helpful.

But it depends.

It depends on many things: your effectiveness at production and marketing and distribution of your product.

The big idea of unintended consequences can deal blows to your farm or ranch business.

READ MORE: The cost of information

Your breeding and husbanding practices which target certain genetics which are well adapted to your local growing conditions, may result in good quality meat, but your fertility may fall off affecting your profitability.

It is a rule of the modern economy that you must differentiate yourself in some way in order to have your efforts recognized by the markets, or buyers of your product.

You need to be known for producing a certain quality and quantity of whatever you are selling.

Systems of distribution need to be “right-sized” for getting enough product to market to pay for the production costs and some significant return to the owner/manager of the venture: something to live and thrive on!

Starting with the market you have your sights set on is perhaps the most important matter in business.

That is why students in the Sustainable Ranching program at TRU Williams lake get into this matter of differentiating their businesses in the planning phase.

This business course starts in January. Anybody can sign on for this one course.

Thinking through the “what ifs” is important.

What if the market return changes or consumers change their preferences for the product or the way the product is produced, for example, the welfare of the animals or the health of the soils producing plant-based products.

By the way, major producers of plant-based protein have recently developed a sophisticated network linking producers, processor and distribution/marketing components as they see the demand developing at a fast pace. The proven ability to produce soybeans in Canada means this system spans the U.S. Midwest and the regions north of that in Canada.

On a local level, the lack of meat processing capacity means trucking of live animals a long distance to and from the processors often in low volumes which raises the production cost and ultimately the price to local consumers.

READ MORE: Young people and agriculture opportunities

If ranchers heeding advice a few years back that smaller carcasses were what the processors and the public wanted, they may be shocked when selling into the commodity market which may discriminate against the smaller framed animals.

The unintended consequence of a business decision to supply the evolving market is that profitability is reduced.

The best laid plans to sell into a different market may backfire if the pieces of the value chain (processors, transportation) don’t exist and haven’t been overcome.

There is often research to be mined for information if you look hard enough. However, there often is a lack of local or regional information simply because the research has not been done.

Existing and new producers (students included) are encouraged to look hard to overcome the downsides of their plans so most unintended consequences are explored and planned for.

David Zirnhelt is a rancher and member of the Cariboo Cattlemen’s Association. He is also chair of the Advisory Committee for the Applied Sustainable Ranching Program at TRU.

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