Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: United States

Opening yourself to doing things differently

vectorbomb-ThinkstockPhotos artwork of cowboy riding market
Watch each Friday for Doug Ferguson's Market Intel blog on Beef Producer and BEEF magazine.
Sticking to the status quo and failing may be a sign you need to think about your business in a new way.

When I was a little kid, I was helping my dad work on a piece of machinery. I was trying to get a bolt started but the darn thing just wouldn’t go in. I was throwing a fit about it when my dad finally told me if it doesn’t work one way try doing it a different way. That was the best advice he has ever given me. For some strange reason I have carried that in my mind for over three decades and my dad’s words have applied to so many different situations. If he had told me the righty tighty, lefty loosy thing I most certainly would not have found solutions too many situations I have faced throughout life.

Once again, this week I was reminded of how fortunate I was to get that advice from dad. I spoke to a few younger cow calf operators that told me they sold their cow herds earlier this year. These are the guys that have a job in town, and three to four dozen cows. The goal was to grow the operation big enough they no longer needed the off farm job, so I was shocked to learn they packed it in.

I don’t know if these guys know each other or not but they all gave me the same story. They were not making enough money to justify all the work they were putting into it. They concluded that having more free time to pursue other interests was more valuable than keeping the cows around. They all blamed the cattle industry informing me how screwed up it is and how it's impossible to make it unless you have everything handed to you. They all told me they ran a cow as cheap as you can run one.

Digging in on the details

I pressed them for more details about their past operations and what it cost them to run a cow for the year. Their cost to keep a cow was middle of the road for a conventional status quo operation. They were probably true to their word when they said they did it about as cheaply as it can be done, when doing it the status quo way.

I know another young cow calf operator that’s an hour away from here. I asked him earlier this year what it cost him to run a cow, and he shared with me that his cost to keep is $400 cheaper than the young men that gave up. Now let me tell you this guy is anything but conventional or status quo.

I reminded these guys I started my deal from scratch and so have my closest friends, so I know it is possible. I disagree the industry is screwed up because sometimes what people see as screwed up is an opportunity (the perception thing I wrote about last week). I told them it can be done, the thing is sometimes we may not be able to do it the way we want to do it. We have to find a different way that works.

Here is the moment they all really shocked me. After I told them they must find a different way they got tense and defended the status quo. They failed trying to do it a certain way and will still defend that way of doing things. Let me define the word failed: we don’t fail at something until we give up. They were succeeding in that they were making a tiny profit, it's just that they gave up is why they failed.

Persevere for cattle success

When I was younger and still in the registered cattle business I was struggling. I asked some producers that have the big production sales, with the higher sale averages, and sell bulls to AI studs how long it took them to get to that point. They all told me 30 to 40 years. That’s a long time. Thing is at that point in my life it gave me hope because I discovered the importance of persistence from those conversations.

I want to be clear on one thing since I have learned how what I write sometimes gets taken out of context. I wrote these guys failed because they gave up. That does not mean they are failures. They will succeed in life; they are good husbands and outstanding fathers. I still respect them. I just wish they had tried a different way before they packed it in. It just might have been the breakthrough they needed

I understand how changing methods can be difficult. Years ago when I enterprised out my operation I discovered I was losing money on the cow herd. I ran the numbers several times because that just couldn’t be true. I had to have made a mistake. After several days of rechecking and recalculating I had to face the fact, it was time for a different way.

After that the look of the cow herd changed. Breeding decisions changed, and so did the criteria for choosing replacements. The nutrition program changed too. It was tough for a while but the end result was a profitable cow herd.

Ten years ago there was not a word in the English language bad enough to describe what I thought of pigtail posts and poly wires. Today I can’t imagine doing things without them and a portable water line. These tools allow me to grow more grass on the same acres. I can’t imagine why others don’t do it.

People always give me the excuse of not having time to move fences and cattle on a regular basis. If you don’t have time to do that you don’t have time to bale hay, or feed cattle in the winter. You see I know how much time it takes to put up hay. I know how much time it takes to load a feed wagon and drive it out to the pen and feed 200 head of cattle once or twice a day. It takes much less time to move a poly wire and a group of cattle than it does to feed a pen. Not to mention you have to feed a pen every day where if using cell grazing, they may be in that cell for a day or three. As you can see the time excuse is just keeping people from a better way. Sometimes it's something that small that stops us from a better way, from being successful.

For the time being we must do the best we know how, until we learn how to do it better. Then we must implement what we learned and do better. It’s like Bud Williams said “there is no limit to better”

One of the things we need to learn to do differently is market cattle. I have a marketing school coming up the first of September. For more information go to my website. I am limiting this to 25 people and registrations have started coming in already. If this is something you’ve been thinking about the time to get registered is now.

If you are still not sure and are poking a stick at the idea of doing things differently go to this podcast and listen to the Wally Olson interviews. https://pharocattle.com/podcast/ There are some good nuggets in there.

Market report from the field

This week I saw more bred cows and pairs sell in Nebraska. This is uncommon for this time of year since most cattle are out to grass now. There was no interest in fall calving bred females. They only brought weigh up price. Pairs with small young calves at side brought $500 more than the bred cows, while pairs with bigger calves brought $100 more than small calf pairs. Age of the cow didn’t seem to matter much as there was only a small decrease in price with the age of the cow.

The Value of Gain in the feeder markets was all over the place. Some auctions maintained the trend of high VOG on cattle under 600 pounds. But other auctions had VOG that was up and down across the spectrum. To be clear when I calculate the VOG I go every 100 pounds.

Buyers have little to no interest in cattle weighing over 900 pounds. At that weight range 50-pounds heavier could net $80/head less. With current feed prices selling this heavy weight is a costly blunder. With the bump in fat price these heavy feeders are a profitable buy back.

Load lots sold well this week. One thing that caught my eye on market reports is the price paid for load lots of heifers in the south, they were near Nebraska price. The person that sold a load of heifers could easily buy back steers and still make a handsome profit. What a deal. Sell heifers, upgrade to steers, and still have a good profit. Profitable heifer to steer trades can and do happen.

This week feeder bulls were 15 back. Unweaned calves took a hit of 10-30 back. The 100+ degree temps would have a lot to do with that big of a discount.

Make plans to see Doug Ferguson at Husker Harvest Days – Sept. 14, 15 and 16. He'll be speaking at in the Beef building – to the grandstand crowd where cattle handling demos occur. If you attend the show, check out his presentation. It begins at 11 a.m. each day.

TAGS: Beef
Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish