Cattle producers: Don’t make repetitive mistakes, find the problem and a solution.

Doug Ferguson

October 20, 2023

7 Min Read
Watch each Friday for Doug Ferguson's Market Intel blog on Beef Producer and BEEF magazine.VECTORBOMB-THINKSTOCKPHOTOS

When you do something enough times eventually something will happen. My daughter had two tough practices (cross country and basketball) in the same day and only a few hours apart and she ended up with a hip injury. She eventually ends up in physical therapy, and the therapist explained to us that her pelvis was slightly tipped, and there is an issue with her toes that led to this injury. If these two issues were to go unaddressed this would be a reoccurring injury she would suffer through as long as she keeps running.

The therapist informed us that the running shoes we bought her were the worst shoes for someone with her physical ailments. That was the easy part, all we had to do was upgrade shoes and get insoles for some of her other shoes. The hard part is resting and doing exercises to strengthen the hips, along with learning how to change her form so she uses her body in a different way.

That visit to the therapist shed a bunch of light on things for us. My wife and I have noticed she looks a little awkward when she runs but we shrugged it off thinking she grew tall at a young age and she’s at that age when kids are just awkward.

When we were informed of her condition the lightbulbs came on and it explained so many things, we’ve seen her struggle with over the years. Of course, with this new information we now have better questions, and I’d say a better plan moving forward.

Don’t repeat history

Later I was thinking of this and how it is the opposite of production agriculture. I couldn’t help but wonder how many repetitive injuries have happened to farmers and ranchers due to the line “we’ve always done it this way.”

Something grandpa did fifty years ago resulted in him making a bunch of money that one time and he just started doing it over and over every year. That eventually became how things are done around that place.

How many times has that practice resulted in injuring the family business, leaving it to struggle for a while until it is up and running strong again and then the same injury reoccurs? How many family farms went under because they failed to see the root cause of their issue and didn’t correct it? Just like my daughter’s condition, it is easy to miss.  It is also easily, and painlessly fixable once aware of it.

Once we become exposed to new ideas and material, we can never become unexposed. What we decide to do with it is up to us. Some of us reject it. In fact, some of these people were only exposed to it by accident, they do not actively seek a new and possibly better ways of doing things. 

Don’t be afraid of something new

Then there are the rest of us who actively seek new ideas. The question then becomes what are they going to do with it?  Do they go home and put the book on a shelf and think they’ll come back to it someday? Or do they go home and immediately begin to implement something?

Do they do what they preach?

The first thing I recommend is to carefully vet the school or seminar you plan to attend. There are some out there that are not qualified to speak on the subject matter they are presenting, and some are only trying to get into your wallet. It’s a shocker, I know, not everyone has your best interest at heart. Do they live what they preach?  Disappointingly many will not pass that litmus test.

Once you do find a good quality school, I suggest comparing their material against your situation. Find a way to begin implementing some of the material, even if it is on a small scale. Easing into something and gaining some small successes is a great way to gain experience and build confidence. It will also let you know if you need to adjust something to retrofit it to your operation.

There are many articles being written about what to do with the windfall profits being made in the cattle biz right now. I haven’t seen any (I haven’t read them all) that suggest investing in yourself. Your mind is your greatest asset so it would only make sense to invest in it. I think the reason this great asset is overlooked is two reasons. First it was given to us free of charge so we place little to no value on it. Secondly, we tend to have a bit of arrogance about us. This usually comes from multi-generational operations and sounds like this “we wouldn’t still be here if we didn’t know what we were doing.” I can’t overstate how dangerous that line is.

Education vs. inputs

Education is cheap when compared to other inputs. High quality education also has a much higher return than other inputs. Some people who have attended my marketing school have earned all their tuition money back on 5 head! There are some grazing schools that have helped people more than double the grazing capacity on their ranch. Think of that, it’s like getting a second ranch for free.

There were two people that have gone through my marketing school and both of these guys were in the same marketing school I was at when I first learned sell/buy marketing. One told me that hell is when you meet the person you could’ve become if you made a different decision. He went home and did nothing with the material we were exposed to and raising cattle to make a profit has been a struggle. Where I took it and used to make enough money to quit all off-farm jobs and raise cattle full time. Learning and implementing the right things will greatly change the value of your time as you move forward in life.

This week I was interviewed on another podcast. This one was great fun, and these young women ask me different questions that no one has asked me before. I have already received awesome feedback from it.    NDFB - Straight Talk

Plan ahead

We have also released some 2024 dates for two sell/buy cattle marketing schools. One will be in February on the 6 and 7th.  The other in April on the 2nd and 3rd.  Registrations are already coming in.

At the market this week

In the markets this week there are two things that are really grabbing my attention. First, in areas that have received rain some of the fancy 4 and 5 weight heifers are seeing great demand from buyers, with some sets outselling their steer brothers. I can sum up my thoughts on this in one G rated word: overvalued. The thing is it also tells us how optimistic some people are feeling about the future. 

The second thing that gets my attention, and I’ve hinted it was coming on here, is the abundance of leap frogs. The majority of the leap frogs are the 10-weights. Here is the thing we need to understand. 

Value of gain

While the Value of Gain (VOG) is important to know, it is the relationships that are the most important. While the buyer of the 10 weights is being subsidized by the seller these 10 weights are still over-valued to fats. This brings me back to a question I ask all the time, “How does anyone think they are going to make money with cattle if they don’t know how to accurately calculate a Return on the Gain?”  The answer is dumb luck.

The VOG was strong on light weight cattle and tapers off as the cattle get bigger.  Feeder bulls were up to 50 back this week, and unweaned calves were up to 19 back.  This underscores the need to know the difference between VOG and monetary gain.

First calf heifers

Female sales this week pulled a nasty trick. No one had any interest in first calf heifers. They sold right at their Intrinsic Value (IV).  Lighter weight feeder heifers sold for more than bred heifers this week, and the bred heifers were good quality too. A broken mouth bred cow was worth more than the bred heifer, and the heifer has the higher IV to boot.

Intrinsic value

Second and third period bred females in good flesh sold well above their IV, except the bred heifers and the short solid cows and older cows. Females that were moderate to thin fleshed sold right at or under their IV.   Females in the first trimester sold below their IV.

Pairs sold pretty much for the same price, regardless of age.  Body condition had more impact on price than anything. Pairs sold over their IV, until the cow was called a short solid, then they sold at or under their IV.

The opinions of Doug Ferguson are not necessarily those of or Farm Progress.

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