January 31, 2025

Monday evening, I was listening to a pregame show before a high school game. The coach excessively bragged up one of his players for time spent in the gym working on her shot. The interview didn’t age well when two hours later that player had an easy bunny shot that needed to be made to tie the game, only to miss it as time expired.
We played that moment back a few times in disbelief, there was a fundamental error in her shot that should have been corrected in fourth grade. It reminded me of the saying that we don’t rise to the occasion, we fall to the level of our training.
Fundamental flaw
This week I received a call from a producer who bought $5 three weights. He was experiencing remorse and wanted reassurance that he did right. I asked the standard questions of what he sold and what the cost of gain was. This is where I noticed a fundamental flaw, it was in his vocabulary when he gave me his numbers. I pointed this out to him as this is not what I teach, so I knew right off he attended someone else’s marketing school, and I have warned about this issue multiple times in this column. The issue was orders of operation in his math.
Many people have called me after getting into a bind when trying to implement what they learned at another school, as a result I’ve had to set boundaries with people who attend those schools after receiving a lot of heated negative feedback that for some odd reason got directed at me. I typically will cut the conversation off and refuse to offer free help until they attend one of my schools. This call made me curious though and could also be used for educational purposes.
Do the math and learn the method
After getting the math straightened out it was clear he should have stopped bidding at $4.44 to hit his profit target (and no, I didn’t give him the math, just the answer). He wanted to contest that, as he learned how to do the math the way he did at another sell/buy school. I asked why he called me then, and he admitted something didn’t feel right. With the weight difference between his sell and buy back he thought the dollar difference was light. I agreed because he bought a loss of over $200 per head. Four weights sold on an 87-cent slide from the three weights. He could’ve bought over 75 pounds for less dollars per head and captured some excess profit.
This producer bid away his profit margin and the feed value of gain on that buy back. I teach this in my schools: “A livestock business that has no animals is more profitable than a livestock business that devalues its feed by feeding it.” Since he wasn’t properly trained to spot what he should be buying he would’ve been better off going home with an empty trailer, keeping his feed and money. To me this situation is what a margin call looks like with faux sell/buy marketing.
I’ve received this same call multiple times, same problem different voice on the other end. Full transparency for readers, I didn’t hold back. Father to father I pointed out to him that he was failing in his duty, obligation and responsibility to provide for his family by marketing the way he attempted to. And that he paid tuition to learn how to lose money. He shot back at me and said that he did what he was taught. Circumstances do not change responsibility.
The whole point of owning cattle is to make our lives better. Profit so we can afford goods and services, provide healthy food, and all the byproducts we get from them. Sequestering carbon, upcycling, and improving the ecology of pastures. The whole point of teaching schools should be to help others understand how to earn money so they can provide for their families.
Correcting the fundamentals
The coach I mentioned above should not be praising his player for extra time in the gym, that is a mediocre mentality. Instead, he should be correcting her fundamentals. The instructors of that other school should correct their fundamentals, which in this case is orders of operation.
Breeding stock
On the female side of the market, it is clear there is no shortage of willing buyers. One sale barn owner told me before his sale that he had more buyers than cows. Some of these buyers only had enough money to buy a couple head, and he ran his sale accordingly. Every draft we had the option to buy one head up to everything we saw in the ring.
I listened to a real estate podcast, and they commented that people always want to get into real estate when the market is hot. We are seeing the same thing with breeding stock. People have cash and they want to spend it on cows.
Dispersal sales
At every female sale I took in there were dispersals. I write down every draft that goes through the ring and this time I paid close attention to the head counts by age. Here’s the average. After selling bred heifers the consignments sold 36 percent fewer 3-4-year-olds. There were 16 percent fewer 5-6-year-olds than 3’s and 4’s. 71 percent fewer 7-9-year-olds than 5’s and 6’s. But then there was a 140 percent jump from the 7’s to the old cows.
Yes, I took some time this week paying attention to silly things. This highlights the obsession of cow longevity. The few that make it to that age are the ones that some people think “paid for themselves”. That means that most of them don’t due to how many fell out between age two and 9.
Selling culls
Statistics tell us that 20 percent of gross income in the cow/calf segment comes from selling culls. Some people say we should not be in the business of making old cows due to depreciation. However, with legit sell/buy we can market older cows and replace them with younger ones at a profit, and it was possible to do at every female sale I took in this week. One producer asked me my thoughts about the silly saying of we shouldn’t breed an animal unless we plan to calve her. The people that spout such nonsense would have to explain away the bred heifer and rebreed markets.
That last paragraph was a shotgun pattern. Here’s my take. The fallout rate is why I suggest people ignore the longevity idea and learn how to market females. This is possible due to the existence of being able to sell rebreeds, adding value to them. Relationships exist throughout the entire spectrum of the market. Relationships exist due to stage of pregnancy, body condition, and cosmetics.
Opportunities
As I watched these female sales (close to 5,000 head) I spotted so many classic opportunities for producers to prosper themselves. There was time value of money buying pairs, selling old cows and replacing them with younger ones at a profit, the difference in stage of pregnancy, geographical spreads, and selling fleshy cows and replacing them with thinner ones (the harsh weather caused some to lose weight). A producer could also do some female to stocker trades if they wanted due to the rise in the fat cattle market. And the one and done cows. Bred heifer prices are high enough that the greedy pigs are bidding a sweet premium into replacement quality heifers.
While I am seeing all this happen in the ring several yards in front of me, I overhear the chatter on the seats. Things like “How does that work?” “She loses one calf she’ll never pay for herself” “What if the feeder market falls” “He must have a better banker than I do”. This led me to have a light bulb moment. While I saw nothing but opportunity in the saw dust some saw a high-risk low return game. What I realized is the opportunities don’t exist in the market; they exist because of the knowledge and marketing skill in the operator’s head.
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