What a difference three years can make, in 2013 cattle and crop prices were climbing to record highs. Agriculture and rural America was thriving on an unprecedented wave of record high prices for grain and livestock. Everyone knew it wouldn’t last forever, but the speed to which it came crashing down in 2016 was just as unprecedented. So what happened? The opinions and reasons are as varied as the landscape that makes up rural America. So how do we prepare for 2017 and weather this storm?
Strategic Planning: 10-Step Process
Strategic planning is an often used buzzword in the industry, but strategic planning does contain the tools for a ranch manager to navigate through this time of uncertainty and market volatility. Strategic and scenario planning in ranching is a 10-step process as described in the Strategic Scenario Planning in Ranching: Managing Risk in Dynamic Times handbook.
- Assess current situation and inventory of ranch resources.
- Conduct SWOT analysis.
- Establish a vision for the ranch.
- GAP analysis
- Strategies to close the gap.
- Describe multiple scenarios.
- Select and evaluate the most-probable scenarios.
- Determining Strategies with the highest likelihood of success.
- Implementation of the strategic plan
- Monitor performance with the Balanced Scorecard.
Each of the above steps will be covered in depth in subsequent SDSU Extension resources. Although the 10-step process may look daunting, it is an excellent opportunity to take a hard in-depth look at your operation. The process may reveal unforeseen opportunities and unlock the potential of the operation while better positioning the ranch when conditions and markets improve.
The Bottom Line
The strategic and scenario planning process works very effectively regardless the size of the ranch operation. Small family farms to large corporate operations have taken advantage of this process.
Many challenges face the ranching industry at this time and many more are on the horizon, however, by implementing a strategic plan, a ranch manager will be better positioned to manage risk and meet those challenges today and into the future.
Source: Sean Kelly, South Dakota State University Extension