Biological Capital

I had an interesting phone call from a young producer just lately. He shared that he was experiencing a terrific growing season largely due to lots of rain. He had more grass than he had planned for. He was considering haying some of his land to deal with the extra growth.

His question was: what do you think I should do? My response was: I don’t have any idea. However if you give me some more information we can likely reach a wise decision together. How would you respond to his question?

Further discussion revealed that he had a financial plan that showed a profit. He was comfortable with his projected profit. His financial plan was based on average growth. This year’s growth had far exceeded the average. He understood the value of improving the land. Past experience had shown how valuable biological capital is. He realized he had areas on his ranch that could benefit from biological capital.

My final question was: If you don’t make a deposit in the biological bank account in the good years when will you make one?

Together we agreed that the answer is: NEVER!!!!

In the end he decided to leave the disc bine in the shed. He is choosing to trample the extra forage with his existing herd. The result will be a huge deposit in the biological bank account.

I think there are many areas experiencing excellent growing conditions this year. How will you deal with the extra growth on your place? Remember that biological capital is like having money in the bank. It will pay you compound interest for many, many years. I have areas on my ranch where my Dad made deposits in the biological bank account 60 years ago. We are still reaping the benefits. Improving your land is the quickest & surest way to become profitable & sustainable

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