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The first time I watched the movie Moneyball, I about came out of my chair thinking, “This movie is about ranching”. The correlations are strong and the lessons from the movie are absolutely appropriate to agricultural businesses.

In the movie Moneyball, Billy Beane is the general manager of the Oakland A’s, who have just lost their star players and don’t have the budget to compete for top talent. In the following clip he’s meeting with his staff of highly experienced scouts to discuss how to fill the roster.

You can almost see a room full of ranchers looking over a set of cattle, evaluating what they see and discussing which type of cattle would be best to put on their ranch. “See the leg confirmation on that one, look at that udder, the depth of body, etc.” In the clip you can hear Billy searching for a new strategy. Doing business in the same old way isn’t going to cut it for the A’s. “If we try to play like the Yankees in here, we will lose to the Yankees out there.”

If you’re ranching for profit, you’re like the Oakland A’s. Your competition has an unfair advantage. They are likely self-financed, already entrenched with long-term land access, owned livestock and equipment.  They often don’t have a profit motive and are willing to subsidize their operation with unpaid labor. If you want to win, you better come up with an unfair advantage or a completely new strategy. What are you willing to do that others are not? Where can you create value and a strong gross margin?  

Playing the game the same way everyone else is playing, isn’t going to cut it. Running a good set of cows, getting good conception rates and weaning good calves isn’t enough to make a healthy economic profit. We have to consider the weird stuff.  

Billy Beane hires Peter, a data nerd from MIT to identify undervalued players by their performance statistics. It flies in the face of the experienced scouts and causes an uproar in the A’s organization, but the A’s go on to have a stellar season despite one of the lowest payrolls in baseball. I’m not suggesting you ignore all the years of experience you have in your operation, but I am encouraging you to think beyond the way things have always been done on your place.  

What’s the Moneyball approach on your place? Where can you identify and exploit a competitive advantage that others are ignoring? What old ways is your business hanging on to that are hurting rather than helping you move your business forward? Post your experience of thinking outside of the box in the comment section below.

 

14 Comments

  • JOSH LUCAS says:

    I love the weird stuff, great article. These days my bills are pretty much all paid by grazing cull cows, fattening on grass and and then wholesaling ground beef. The margins are double what a pair can pay me and the best part is turn over is only about 120 days, I can do 3 a year and still only use the same grass as one pair.

  • Liz Riffle says:

    Dont wean calves. Less man power needed, less feed for the calves due to less stress. And in the end you really get to see which moms are fit and which are not for rebreeding.

  • Steve Campbell says:

    Heifers or bred heifers have a chance to be “the next big star.”

    10 year old cows that have had a calf every year and all of her daughters are still in the herd … kind of boing stuff. She is ten. She should go down the road.

    Not so fast Mr. conventional thinker.

    “One in the hand/herd (and all of her daughters) is worth two in the bush/EPD’s.”

    Good analogy Dallas

  • Kurt Dale says:

    That’s a great movie. Perfect clip to use. Now I am going to have to watch it again with a ranching mindset. Just replace “who is Fabio” with “what is WOTB” and it is dead on.

  • Erik Tucker says:

    Yes sir your spot on. The first time i watched it I thought their are a few lessons to learn here. Selling some over valued bred cows and buying back some undervalued bred cows, keep inventory and cash up close and for most in mind.

  • Shanon Sims says:

    Is it a coincidence that the guy with a giant hearing aid is the one that talks about how the ball sounds coming off the bat?!! I think that is another great analogy within this analogy!

  • John+Marble says:

    I recall the precise moment (several decades ago) when I realized that life and ranching were not fair. I was looking through the windshield at ranch after ranch and trying to figure out how they could possibly be making money. Of course, they weren’t. And that was when I realized that I would need to do things differently because they had money and I didn’t. Fifty feet of crap indeed. Then I bumped into a guy named Stan. Then Dave. Then Dallas. Pretty good scouting team. 🙂

  • Eric Moes says:

    Awesome Profit Tip Dallas! Moneyball is one of my favourite movies. Speaks to the contrarian that I love to be.

    Idea for competitive advantage? Buy other people’s “junk” cows (undervalued) and find a way to add value to them. Like you predicted, for us in our region, that means late calvers. Buy them at cull cow prices, calve them out on grass in May, sell light calves and open culls in the fall.

  • Lani says:

    We run 4 herds. One herd has bulls year round and run on the toughest most marginal land on our operation. The other three are seasonally bred. We run gross margins on each herd. Can you guess which one has the highest gross margin? The one we spend the least amount of money on! Moneyball! Btw, I got a D in Cattle Production 301 but been profitable running this ranch for over 40 years.

  • Monte+lerwick says:

    Oh man, I think you’re throwing me a ground ball here Dallas. It’s amazing to me how many folks are blind to the value of tech solutions. We consistently hit home runs on remote sensing and control for pumps, water tanks, pivots irrigation, rainfall, and a host of agronomy applications. We see economic breakthroughs – most only can see a new gadget and a new headache.

  • Justin Ayer says:

    Dallas, this is a great profit tip! Very insightful. I love your post and all the comments too.

  • Sammy Buchanan says:

    Great tip. The games not fair, work with what you got and the best one…There’s 50’ of crap and then there’s us.
    Another lesson is at the end when Billy meets with the Red Sox. Anything we (ranchers/farmers) do that shakes up the game or threatens the system they (packers, lobbyists and politicians) go batshit crazy.

  • Dusty Britches says:

    In that movie, he uses stats to pick the most consistent players. Not the greatest players or the flashiest, but the most consistent. We need to use our stats to the same end.

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