I know this guy that is highly intelligent.  His goal in life is to go home and take over the family farm growing corn.  Almost 20 years ago he decided to get a PhD.  When I asked him why he was doing this his reply was he needed “credentials.”  To this day, the closest he gets to corn farming is when he burns all his vacation time to go home and help.  This is a double binding message, which is where we say we want something, but we behave the exact opposite.  I asked this guy once how successful he thought he’d be as long as he keeps one foot out the door.

Are you ready?

Napoleon Hill said “There is a difference between wishing for a thing and being ready to receive it.  No one is ready for a thing until he believes he can acquire it.  State of mind must be belief not a hope or wish.”

People will say they want to make money in the cattle business.  If they think they are ready to receive, why do they keep talking about what is not working?  This chatter, whether out loud at the sale barn with their buddies or silent self-talk, reaffirms what they don’t want.  These people are focusing on their current results, which they don’t want, or problems.  They are not doing things in harmony with what they say they want.  They are focused exactly on what they don’t want.  Where attention goes is where energy flows, and that thing is what grows.

Capturing the profit

This week I went to an auction to replace cattle I sold and capture my profit margin.  In case you are new to this blog with legit sell/buy marketing we capture our profit margin on the buy back since that is where we have control. At first what I was seeing didn’t make any sense to me.  Six weight bulls sold for four cents less than the market topping five weight steers and six weight steers sold for 29 cents more than five weights.  For another $30 per head this joker could have bought eight weight steers all day long.  Needless to say, I got skunked at this sale.

Later in the week a friend texted me an LRP table.  It became clear what was happening at the sale earlier in the week.  This joker has to get the steers bought, and when he does, he can lock in an LRP on them for $2,700.  Since I just sold a load of steers, I knew exactly what my cost of gain was on them, and I also know what this guy was paying for six weight steers.  Doing some simple math in my head and adding the LRP premium the producer would be responsible for paying to the Cost of Gain (COG) I know what the margin is that he is trying to capture.

Get in harmony with a profit

Getting back to what Napoleon Hill said.  You’ll never receive a thing unless you are in harmony with it.  My goal was to make a profit that day by replacing cattle.  I couldn’t do it where I was, so I got on my phone sent a couple texts and within a short period of time an order buyer got my replacement buy back for me.  What the cattle cost me delivered to my place locked in a profit of what the joker is trying to capture with and LRP.

Those of us that generate positive cash flow from marketing skill think, speak, and act differently.  We have a completely different attitude and avoid counter intentions. 

Nothing is impossible

We have been indoctrinated all our lives that it is impossible to make money in the cattle business.  We have been told it is impossible to start from scratch.  The conscious mind has the ability to accept or reject ideas.  When I was young and bombarded with these messages, I rejected them.  I had this intuition that there had to be a way and I would not listen to people that told me it couldn’t be done.  Over a decade later I learned sell/buy marketing and proved them all wrong. I started from scratch with $7,000 and grew my operation until I was no longer working off farm jobs.

I used to think the only reason LRP existed was due to a person being a great entrepreneur and making a product that would fill in for our lack of marketing skill, and knowledge.  I still believe that but this week an idea was shared with me that makes too much sense to ignore.  LRP is what we were given for the government’s failure to break up the packer monopoly and that is why the premiums are subsidized.  It’s the only way anyone can afford a contract.  Big Brother is so thoughtful.

Play to win

Years ago when the government tried to roll out a farm program people rejected it.  It reminded them too much of the communism they fled when they came to America.  The government rewrote the rules a few times and offered a little more money to sweeten the pot.  Eventually people began to accept it.  Today farmers complain about all the stupid things they have to do in order to remain in compliance, but they are too dependent of the payments.  They can’t farm without them. 

LRP is becoming much the same thing.  This is another double binding message.  We say we don’t want the government to overregulate us and force dangerous mandates, but we are taking their bait.  The mouse dies in the mousetrap because it doesn’t understand why the cheese is free.  Another double binding message is we say we want to leave something for our kids, but we are actively participating in a program that is destroying the laissez faire free market capitalism that enables us to prosper. 

People are playing to not lose instead of playing to win.  This is another double binding message.  The biggest attribute to a double binding message is doubt, which is the opposite of confidence.  We gain confidence by gaining a higher level of awareness, or knowledge of a particular subject.

This is the reason I teach legit sell/buy marketing schools.  If we do not rely on silly programs designed to make us dependent, we are solid.  In sell/buy marketing we let the market determine the over/undervalued relationships, utilizing natural laws to prosper.  This means we do not let a calendar, a period of so many weeks, or target weights dictate what we do.  Right there you can clearly see the way LRP is designed it is not in harmony with what we want.  It is based off man made laws, fighting the market, instead of natural laws taking what it provides.

One of the natural laws is the law of polarity, or opposites.  If we place a net under failure, we also inadvertently place a cap on success.

It’s all about the relationships

Sell/buy marketing is about relationships.  I’ll explain one.  The out-of-pocket expense for an LRP on 25 head will cost enough to pay the tuition to one of my schools, the two-night hotel stay and enough fuel to drive 700 miles. The skill you will gain is better than money because it cannot be stolen from you or lost, unless you let it atrophy, and it will prosper you.  At the end of so many weeks an LRP will expire, and you will have to buy another, and then another, and then another.  Another double binding message, trying to keep costs low but spending money unnecessarily instead of investing in yourself.

Value of gain

This week the Value of Gain (VOG) was highest for flyweight cattle.  Markets were spit on what we saw from there.  Some sales set in the trough, meaning VOG dropped in the middle of the spectrum, the came back up on heavier feeders.  Other sales saw VOG just taper off as they got heavier.  Leap frogs, which is where we can buy heavier animals for less dollars per head than lighter ones, were abundant. 

One thing to consider when doing leapfrog trades is we run out of time, meaning we are getting ourselves closer to the terminus.  This week, however, that relationship was different, there are heavy feeders that are under-valued to fats!  Some of these heavy feeders were selling right at fat price or even below it.  When we can buy back replacement cattle at a price that is below our selling price, good things are happening (for the buyer anyway).

Geographical spreads were something to take note of.  As I pointed out above that is what I did this week.  Feeder bulls were up to $30 back, unweaned calves were up to $27 back, and fleshy cattle took a discount of up to $25.  The skilled marketer just can’t overlook these four opportunities because that person is in harmony with earning money.

The opinions of Doug Ferguson are not necessarily those of beefproducer.com, beefmagazine.com or Farm Progress.