The Three Key Determinants of Ranch Productivity

One of the main challenges that we (as ranch directors) have to deal with, on a day to day basis is that of enhancing ranch productivity. I was reflecting on this subject — namely the subject of maximizing ranch productivity — the other day, and it occurred to me that there are, in fact, three key determinants of ranch productivity. These three are aligned with the factors of production: which, to me, makes sense given the fact that ranch management revolves around seeing to it that the factors of production are optimally utilized.

The first key determinant of ranch productivity is that of land utilization. A ranch is said to be optimally productive if the land in it is optimally utilized. Thus if one ranch is 2,000 acres, and it gives, say, $1 million per year, while another mini ranch is 500 acres, and gives $500,000 per year, then the mini ranch (of 500 acres) is said to be more productive the big ranch of 2,000 acres. This is because for the big ranch of 2,000 acres giving $1 million per day, it translates to a productivity of $500 per acre, whereas for the mini ranch of 500 acres giving $500,000, it translates to a productivity of $1,000 per acre.

The second key determinant of ranch productivity is that of labor utilization. The idea is to produce as much as possible, using as little labor as possible, whilst at the same time ensuring that the labor is not over-strained.

And the third key determinant of ranch productivity is that of capital utilization. The idea here is to produce as much as possible, for a given amount of capital investment.

It is critical to understand that these factors are not supposed to be looked at in isolation, but rather, the factors should be looked at together. Thus, the first mine ranch that seemed to be very productive at $1,000 per acre may turn out to be not so productive, when we discover that the capital investment in it is much higher or/and when we discover that its labor costs are also much higher. So you need to look at the whole matrix of these four factors, while trying to figure out whether or not a given ranch is optimally productive or not.

Why is it So Hard to Find a Good Ranch Manager?

Some time towards the end of last year (2014), the person who had acted as the manager at our ranch for many years announced that he was considering leaving the job, to pursue other interests. He was therefore giving us six moths to look for another ranch manager. When I received that notice, I thought that six months would be more than enough to recruit, hire and induct a new manager for the ranch. But experience proved me wrong. As time went by, I began to realize just how hard it can be to find a good ranch manager.

After the previous manager gave us six months to look for a replacement, we placed adverts in various recruitment websites, as well as various agricultural publications, inviting people to apply for the ranch manager job. Then we started receiving applications. And this is when I came to realize that very few of the people who applied for the job could actually be regarded as proper candidates for it.

A good number of the applicants turned out to be people who had studied business management, and who imagined that that was enough to make them ranch managers.

Others had not studied anything to do with management, but they had worked in ranches for various durations of time, and they imagined that that would make them qualified to work as ranch managers.

Then there were the others who had general degrees in agriculture, and who felt that such qualifications prepared them adequately to work as ranch managers.

Finally, we did get a couple of applicants who had indeed studied ranch management, but who had no real life experience whatsoever; being recent graduates.

As we sifted through the applications, we came to realize that finding a good ranch manager can be very hard. In the end, we had to recruit one of the fellows who had studied ranch management, but who lacked experience, in the hope that we could induct him well, train him further and hopefully be able to do some meaningful work with him in the long run. The whole experience did, however, teach me that finding a good ranch manager can be very hard: as there seems to be a very limited supply of such professionals in the labor market at the moment.