A few thoughts by John Nalivka: Sustainability and Ranch Costs
January 26, 2017
Last year, I presented some of my thoughts on this "new" idea called sustainability. I continue to say that I am not sure if many of the marketers or consumers could really give a definition of sustainability with regard to the food industry. This concerns me if suddenly the beef industry finds itself in the midst of a regulatory quagmire that was conceived to assure "sustainable" beef production. Since the inauguration of President Trump, this may be less of a worry as he has already indicated that he intends to cut regulations that are smothering U.S. business.
However, regardless of whether the sustainable movement is driven by regulations or marketing across the supply chain, there will likely be costs associated with the compliance of any specific protocol. And, with regard to protocol for sustainable ranching, I reiterate – ranches driven toward long term profitability already manage toward sustainability – by definition.
But, what about these added costs? Anyone who has grazed Federal land knows very well how outside influence on grazing management can add cost to their ranching operation. If you make the decision to change the genetics of your cow herd in order to improve marketing opportunities, there is a cost. There are few major changes that will not add costs to your ranch business, particularly those that are imposed from the outside with little understanding of the unique cost structure of your ranching operation. This is particularly true when it is not necessarily clear what is involved, which in turn offers little opportunity for appraising potential added costs. This has been the case in Federal lands grazing management decisions. The rancher thinks he has an idea of what a decision entails only to find out after the fact that other criteria came into play. Managing for unknowns is not easy.
Marketing the sustainable concept can begin with the very best of intentions. It does have consumer appeal from the standpoint of increasing the awareness of food production in this country. However, like many other well-intentioned ideas, it can go off the rails and someone gets left holding the bag – added cost. This is why the discussion about that third leg of the stool, economics, is so important.