The vibe in the cattle business is starting to suggest we’re approaching a tipping point.  While usually people have their pom poms out cheering for higher prices under the false pretense that it will make them profitable, their thoughts are beginning to shift.

A few people who are in my inner circle and more in tune with the mainstream than I am, are telling me they are noticing a lack of social media shares of popular YouTube entertainers on their feeds. I have been hearing comments from producers that this business is no longer for the faint of heart. This shows what else price discovery can do; it can get high enough that some people begin getting nervous.

Emotion and confidence

I hear from people that have attended one of my schools that what I teach takes the emotion out of marketing. There is no way that is possible since human beings are naturally emotional beings. When the right emotion is invoked, good things will happen. We’ve all seen a ball game where one player’s emotion can lift a team up. This also can go the other way. What I teach requires discipline to execute and when a producer stays disciplined and follows the math, which is the pathway, they can make good things happen.

First let’s examine what emotion is. It is defined as: A natural instinctive state of mind deriving from one’s circumstances, mood and relationship with others. Confidence is: A belief, the conviction that one has the ability to meet life’s challenges and succeed. Therefore, confidence is not an emotion. Self-confidence is one of several parts of emotional intelligence.

Related:Cattle market insights: Can bred cows beat diamonds?

Check the math

Having confidence in the material I teach is not an emotion, nor did it take the emotion out of it. These sell/buy rookies tell me they are constantly double, triple and quadruple checking their math to be sure they have it right. That much checking over is driven by emotion. They are nervous and anxious. I did the same thing when I was a sell/buy rookie.

Eventually after doing some successful trades these people tend to stop all the double and up checking of their math. Repetition comes before self-confidence. I am the only one who teaches this, and it is because I am the only sell/buy instructor who has lived it, so I understand what is required.

Management

All successful investors share this quote “I don’t invest in the S&P; I invest in me.”  What this means is they put in effort to improve their skillset and invest in material, such as books and conferences, to gain applicable knowledge to improve and expand their skills. So, what we are really hearing when people say this business is no longer for the faint of heart is an admission of a lack of marketing skill, and the self-confidence they will be able to generate positive cash-flow when this market does something different. I wrote different instead of crash because some people will no longer be able to generate positive cash-flow if is just goes sideways. A crash similar to 2008 or 2015 will certainly send some unskilled marketers out the door to soon be forgotten. They are no different from lottery winners who lose their millions quickly. This happens because they don’t have the mindset and money management skills to match their winnings.

Related:Opportunities abound in the cattle markets

Trauma in the market

After several years of teaching legit sell/buy marketing, I have run across some people who are still stuck and not sure they can move forward with what I tried to teach them. What I finally realized earlier this year is that they are dealing with some sort of trauma. Either from something that happened as a result of market movement, usually a crash, or from some bogus method they learned in another marketing school.

My memories of the crashes of 2008 and 2015 are different from theirs. I had sell/buy marketing skills and generated massive amounts of positive cash-flow. That cash-flow enabled me to expand my head count each time, while staying current on all my bills.

Related:The ‘Cattle 529 Plan’

It was all worth it!

The investment I made in myself to attend a sell/buy school several years before the 2008 crash seemed enormous at the time I mailed the tuition check. What the skills I gained from that school did for me during that crash then made tuition appear extremely undervalued.

What I described there was a shift in perception. I am going to try and help you young and beginning producers out there with perception right now. Some tell you that it is impossible to get into the cattle business right now because of these high prices. It is capital intensive, always has been, and $100,000 isn’t going to buy much at an auction.

Same opportunities

When I started buying cattle 26 years ago, I was working a dead-end job making $8 per hour, and that same job today pays between $16-$20 an hour. Since that time the price of fuel, the propane to heat the house and the electric bill, the cost of a new pickup (not the fancy one with all the bells), postage stamps and many other expenses have also doubled. When I was young and starting out, I thought the previous generations had the easier path and better opportunities. I realize now I was wrong about that. With wages and expenses both doubling, beginners have the same opportunities I did back then, everything is equalized and relative. If it seems impossible that is just a paradigm, and it probably isn’t even your paradigm, you got it from someone else who clearly doesn’t have marketing skill.

The markets

A few people shared some Tik Toc videos with me this week. I got a real kick out of those as they were talking about cow markets. They rattled off prices they are seeing paid for females and what they said without saying it highlighted the lack of depreciation in the breeding stock side of the industry.

The cow sales I was planning on attending this week were postponed due to the cold. I looked at market reports from other sales that took place and broken mouth bred cows in the third period brought more than five- and six-year-old cows in the second period (both large and medium frame number ones). What an awesome deal!

Work smarter not harder

We can get paid to market old cows and replace them with cows in their price, and we could calve them in warmer temperatures which means we won’t have to bring calves into the laundry room to keep them from dying of hypothermia. This also has the cost of not having to get the wife a new floor for the laundry room later on. Again, I have no interest in deflecting depreciation, I am interested in making money and making things easier on myself at the same time.