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Lessons From the Gridiron

This time of year in Nebraska, and probably every where else, conversations always seem to turn to football.  I like the game just as much as the next guy.  I will sometimes listen to the sports nightly shows.  If I’m busy on a Saturday, I have a friend text me updates from the Husker game.   I am now at an age where I have friends whose sons play high school football so I kinda try to keep up with that too.

Now as much as I like the game, I often times think we put to much emphasis on sports in our society.  If  you don’t read this post all the way to the end, at the conclusion I still think we place to much emphasis on sports.  Thing is, I had a conversation with a buddy of mine recently that made me take pause and reexamine that stance.

My friend and I are on opposite ends of the athletic spectrum.  He had talent and ability, I had none.  So our stories differ.

I’ll start with my experience.  My sophomore and junior years in high school I didn’t get to play much at all.  I was in a cast both years before school started so I missed out on most all the season, due to healing and rehab.  I went to all the practices, and games.  Watched it all from the sidelines, while wanting to play, regretting what happened to me to keep me on the sidelines.

My senior year I was healthy, and in good shape.  I loved it.  Everything from the conditioning and especially the hitting.  One big problem though.  I was kind of a small kid, so the underclassmen were about the same size as me, had just as much experience, and were a bit more athletic.  When the season started I got to start on offense and the underclassmen got to start on defense, and we alternated series on either side of the ball.  Our team sucked, I’m not sure if we even won a game that year, so the underclassman got more playing time.  I didn’t like it, it sucked.  But hey, it’s a fact of life

A few games into the season, at a home game no less, they introduced the starting D.  I got to stand there as all my classmates ran on the field when their name was announced.  I got to stand there when the sophomore that I was sharing time with got to run on the field when his name was announced  as well.  Things changed in that game.  Some time during the first half I was playing both ways.  During the second half I never got pulled off the field.

Being from a small town I know how things are.  After the game I took my time leaving the locker room that night, to let the other kids bug out.  I went into coach’s office and asked him if the only reason I was playing was because I was a senior.  He told me I was the only player who gave him 100 during practice and 100 during the games, no matter how bad we were getting our ass whooped.  He pointed out that during the games I miss a few of my assignments, but I never stopped.  If your jersey wasn’t the same color as mine, I was gonna hit you

What I heard was I would never spend another second on the sideline the rest of the year.  All I had to do was give 100 every day.  No matter how much I hurt, how tired I was, or how many times I was gonna puke, 100% every time meant 0% on the sidelines.

My buddy went on to play college ball at a small college.  He had some success there.  One summer he was home.  He’d been working out at the high school gym like a Beast.  Never in his life had he been bigger or stronger.  He was also working physical labor jobs, in the summer heat.  He, like any other kid from Nebraska had a dream of playing for the Huskers.  His plan was to try to be a Walk On.  I never knew that was the goal until just recently.  Here is the disgusting part.  He told some of the local fucktards his goal.  They made fun of him constantly.  They told him all the reasons he couldn’t accomplish it.  Like any of them had a clue.  Problem is, he listened to them.  All those hours of sweat and pain in the gym, eating the right foods, out the window.

He told me just about every time he sees the Husker tunnel walk he puts his head in his hands and tears up.  He will never ever never, know if he could have made it.  You shoulda heard the pain, the regret,  in his voice

Him and I learned quite a bit from the grid iron.

Giving 100 has its rewards.  Nobody regrets doing their best

Quitting lasts forever

 
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Posted by on August 26, 2013 in Uncategorized

 

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Night Out With HSUS

The hardest thing about writing this blog is the opening paragraph.  That is nowhere as hard as what I did last night.  HSUS (Humane Society of the United States) had a town hall meeting in Lincoln NE last night, and I attended.  With all the buzz we hear about them wanting to end animal agriculture you can not possibly imagine how hard it was for me to go.  I am very passionate about what I do and think no one has the right to tell me I can’t do it.  If you are a new reader I am a stocker and back grounding operator.

I was nervous about going and might have not went except I told a couple friends I might go and they told some other people I was going so they all started texting me the day before the meeting. I kinda felt like I had to go at that point.  So I quit working early, put on my clean boots, belt with a rodeo buckle I won, and a long sleeve shirt with my brand embroidered on the right shirt sleeve.  As my wife and I pulled up to the hotel I felt nerves like I haven’t felt in years.

We got there early, the meeting started late.  I felt like I got an interesting “sizing up” from two of the security guards.  Whatever that was about.  One of them needs to find a different tailor, I’ll leave it at that.

I invited several other livestock producers to go with me. All of them turned me down.  My wife and I took our seats, and felt very uncomfortable.  Everyone else in the room knew each other and kinda kept eyeing us.

HSUS Nebraska introduced the people that make up their state Agriculture Council.  One of the cats on the council talked about a Farm to Fitness program they have been working on.  Its where some of their producers deliver meat to local gym for their customers.  Here’s a link to the website http://farmtofitness.com/

John Hansen president of Nebraska Farmers Union, gave a good speech.  I’m not sure how I feel about it even yet this morning.  Thing is John always makes good points when he talks.  He talked about how other farm groups have tried to fight HSUS in other states and lost.  He had stories and data that suggested animal ag should have an open discussion with HSUS.  He made the comment that none of the other livestock groups were there, stating that “they are refusing to put on their big boy pants, and have a discussion”.  I’ll come back to that in a bit

Wayne Pacelle was an excellent speaker, as you might imagine.  He is very good at addressing his critics.  For example, HSUS doesn’t use much money to actually rescue animals.  He had all kinds of footage of the organization rescuing animals.  He never stated how much money they  spend annually, or what percentage of their budget they spend on animal rescue.  He mentioned that he gets asked all the time about doing a ballot initiative.  He continued on that he doesn’t think they have to.  He says the market place is changing with dozens of food chains and grocery stores saying they are only going to sell pork that was produced without the use of gestation crates.  He did make another statement at a differ part of his speech. “ Just because some practices aren’t illegal doesn’t make them right”.  So does that mean HSUS might try seek legislation to ban tail docking for example?  We’ll just have to wait and see.

Here’s what I didn’t expect.  He used a quote from Temple Grandin, and made some of the same points ag groups do.  He spoke about connecting the farm to the consumer, and about transparency.

After his speech I got a chance to speak with Wayne one on one.  As a parent I have great concern about the “one generation and out” quote.  If you are not familiar with that one, it meant one more generation in animal ag then no more.  So that would mean that I will be the last generation to raise cattle and my daughter will not be able to.  His response was simple.  He claims it is a lie that someone made up.  My second question for him was why did HSUS get involved in the lawsuit against the Beef Checkoff.  He stated that NCBA may be misusing checkoff monies to lobby, and that is not what the checkoff is set up to do.  Now gang I’m gonna throw in my two cents in here for a second.  He expressed a little bit frustration with NCBA for blocking the egg bill (the one banning battery cages).  So to me it would only make sense to cut off NCBA’s income stream, checkoff money, if you are HSUS.  What I’m saying is since the cattlemen got involved in eggs, HSUS is gonna get involved with the cattlemen.

Last point on Wayne.  He did tell me he has no problem with cattle production, citing that in all aspects of production, pasture to feedlot, cattle have room to move around and express themselves.  During this time his staff got a few pics of us chatting.  Ok whatever.  Wayne and I shook hands.  I thanked him for his time, and reassured him that I am still looking at him with a crooked eyebrow.

I am not a supporter of HSUS, nor a fan of theirs.  I do not think we need them.  I do think we as livestock raisers do need to continue to improve our stockmanship skills.  I am so sick of hearing ag groups and HSUS argue over methods and practices and science.  Who the f&*^ cares about that?  That stuff has nothing to do with being able to work with animals

Now about our ag groups here in Nebraska.  No excuse for you guys not being there last night.

I joined Farm Bureau because they were the lead dog in the fight against HSUS.  They can’t explain away why they did not stand beside me on the front line last night.

The who’s who of Nebraska Cattlemen were only a few blocks away for the Executive VP’s farewell party.  None of them showed up either.  I find this tragic.  Especially since only a couple months ago they pushed extremely hard for a new state beef checkoff, and said one of the reasons they needed the extra money was to fight HSUS.  Again they can’t explain away why they were not on the front line beside me.  Guess the comments about those of us that are not dues paying members being freeloaders just exited the state

AFAN, We Support Agriculture, and other groups that were created to promote, agvocate, and defend agriculture were not there.  Why not?  Did they not want to boost the head count that HSUS may have used to show as support?  There were probably only 20 people there that were not staff or on the state Ag Council, or their family.

How can these groups claim to represent livestock raisers when they don’t show up?

I think a little confrontation is good.  I’m not saying go there and pick a fight with Wayne.  I am saying get out of your comfort zone.

One last thought.  I learned about this meeting in a livestock publication I receive from South Dakota.  Why did I not hear about it from any of the ag groups in Nebraska?  If we pay money to these ag groups they have a duty to warn/inform us on what’s going on.  Yet these same groups are talking openly about PETA coming to the state fair?

 
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Posted by on June 28, 2013 in Uncategorized

 

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Sleeping Zombies

We have so much technology in the palm of our hands today that enables us to keep connected.  Both to each other, markets, news, sports, and anything thing else our hearts desire.  I sometimes use the internet on my phone to watch a cattle auction to see what calves are selling for in one salebarn, while bidding on calves in the salebarn I am sitting in.  I will exchange text messages with other people I know to see what the market is doing in their corner of the world too.

I stumbled across these points on J.W.R.’s blog.  He used them to illustrate how the corral around the sheeple has been made much smaller by our tyrannical government.  I copied and pasted them here since something else jumped out at me that fits part of the theme of my blog.  Thinking.  Staying informed.

 

Consider the implications of some recent events in America:

• The entire city of Boston is locked down under the equivalent of martial law, and house-to-house searches are conducted in one neighborhood without warrants. No uproar. No publicized post facto inquiries.

•John Corzine is not prosecuted for stealing more than a billion dollars from farmers and ranchers at MF Global. Nary a peep from the mainstream media.  (Nor from the ag world either I might add.  In fact some cattlemen’s groups are still suggesting you hedge.  How fucking dumb! )

•An Out-of-state “Marketplace Fairness Act” sales tax bill is ramrodded through the Senate. No uproar.

•The Fast and Furious scandal results in NO high-level dismissals from the BATFE or Justice Department, even though it was clear that it was ordered from the top. Few people are asking the President: What did he know and when did he know it? No uproar.

•Multiple Benghazi Cover-Ups. No huge Iran-Contra type congressional hearings. No dismissals.

•Asset Forfeiture by the Department of Homeland Security has become institutionalized. Hardly noticed.  (also hardly noticed was the Executive Order signed on March 16 2012, called National Defense Resources Preparedness.  Basically a peace time Martial Law.  So your assets, forget them they are not yours anymore.  But hey, he signed it during some important basketball game)

•Justice Department snooping of Associated Press journalists’ phone records. No uproar.

•The Obama administration intentionally makes the sequester budget cuts as painful as possible by slowing down air traffic control, in a grandstanding move. No uproar.

•Attorney General Eric Holder threatens the State of Kansas for daring to assert its sovereignty. No uproar.

•An amnesty deal for illegal border-crossers is negotiated in the Senate back rooms with a mixture of bribes and arm-twisting, and it now awaits a perfunctory debate and a floor vote. No public outcry.

•Meanwhile, Legitimate hard-working, law-abiding refugees (homeschoolers) who properly applied for visas face deportation. This gets barely any notice in the mainstream press.

•Bitcoin’s main banking interface (Mt. Gox) has its assets seized by the Department of Homeland Security. No mainstream news banner headlines. No uproar.

•Most blatantly, there were revelations of systematic targeting of conservative and Jewish groups by the IRS,–perhaps as many as 500 groups. At last there is some indignant bleating heard, but only because mainstream press deems it “newsworthy.” Few people are asking the President: What did he know and when did he know it?

•And as all of these monumental, riveting events are going on, what is the most sought after news story by Americans querying Google, Bing, and Yahoo search engines? Angelina Jolie’s hooters.

Like I said, we Americans are doing a fantastic job of using all the technology available to us to stay informed.  Gosh we are an intelligent, critical thinking bunch!  Some people fear a zombie apocalypse.   If you ask me its already here

 
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Posted by on May 21, 2013 in Uncategorized

 

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Cattle 529 Plan

Ever since I was a little kid all I wanted to do was farm and raise cattle.  Everything seemed so simple back then.  Just grow up and do what you want to.  We all had that dream.  When you get older, and especially when you have a kid, things get real.

In the last year and a half I have spent way more time in the lawyer’s office and CPA’s office than I care to in a lifetime.  I did not get into the cattle biz to learn all about LLCs, Trusts,  payroll taxes and crap like that.  Thing is I do get to do one money/parent thing I love.  Invest in my kid’s future with nothing other than cattle.

A couple years ago I got fed up with the stock market, and pulled all my money out of my Roth IRA, and used the money to buy cattle.  I’ve had a 20%, or better, return on my money since 2005 with cattle.  My IRA never did that.

So here is my thinking.  As a parent it is always a concern of how to pay for college, even though I would not recommend college, or how to at least give our kids a good start.  After Bernie Madoff ,  John Corzine, and computer generated trades I do not trust the markets.  Thing is I know cattle, so I stick with what I know.

Here is what I’m doing for my kid.  The numbers are based off my last trade just last week.  I know the cattle markets will move so for this example I am going to freeze these numbers for the next 18 years.  Thing is even in the last 8 years I’ve still managed to make a 20% return.  Keep that in mind

I market my cattle on a real time cash flow reckoning, so this allows me to always buy back replacement cattle at a profit.  You will need to learn how to do this in order for what I am about to outline for you to work.

So when my daughter was born I bought her five head of calves.  In this example I am using 480# heifers at $1.43 or $687 head.  So five head would cost a total of $3385.  We are going to back ground these heifers and resell them, and replace at a profit.  So in this example we are selling 730# at $1.33.  My real cost of gain is $.93 with a 2.75# ADG so when I add on a 20% return my cost of gain goes up to $1.15.

The 20% return is a $55/head profit.  Buying 480# calves and selling them at 730# with our rate of gain we get to turn 4 times a year.

Now those first five calves I bought for my daughter are financed through the Bank of Dad (BoD).  So when we do our first four turns in year one the BoD collects all $1100 of profit and subtracts it from the $3385 that was loaned to the new baby.  At this pace the kid pays off the first 5 head by age three and has $84 left over.  After this point we make the kid reinvest their profits into buying more cattle.  So after four more turns the kid will have enough saved up to buy 6 calves.  I think that would make for a pretty proud four year old.

Now I am going to assume you see the pattern here and I don’t need to do all the math for you and show you the year by year turns.

By age ten in this example the kid will have 37 head.  Since there was an income for a minor dad paid the taxes for them.  By now I figure it’s time to secure voter registration, and make the kid a tax payer.  Ouch!  So just figure between Fed and State tax kiss 15% good bye.  Gotta pay for the roads we are using to haul these cattle.  Long before we get to this point, a responsible parent is having/helping the kid pay bills, and balance a check book.  Lots of lessons to be taught here.  I have a buddy doing this with his kids, and it helps them to see there is a purpose in learning math in school.  Also all the lessons that come from helping, do chores.  Some real character building here.

Now by the time the kid is 14 we stop adding more cattle.  We stop at 75 head.  That is enough for a pot load.  Also when we stop at 75 head after the first turn we have the rest of the year to do the other 3 trades and save money.  At 14 what kid doesn’t want a car?  So, let them buy one with their own money.  They will have enough.  Also let them pay for some gas, tax, title, insurance and so on.

Now after the car is paid for with cash, we have a decision to make.  Do we just hold it here with 75 head, or do we keep buying more?

For my example here I stopped at 75 head and just started saving money.

By 18 the kid will have 75 head of cattle worth $72,000 and saved $39,000, and spent $35,000 on car, gas and so on.  So our original investment of $51,500 turned into $146,000 in 18 years.

Now I know the doubting Thomas out there is thinking well you didn’t figure feed and so on.  That was in the cost of gain and subtracted from the dollar difference between selling the 7 weight and replacing with the 4 weight.  Leaving us with the $55 retained profit.  And it took 14 years to get up to a load lot.  This is a crockpot not a microwave.

Now what if we took that $51,500 and invested it into a 529 over 14 years, and stopped and then just let the interest compound for four more years until the kid was 18.  At a 10% rate of return we would have $169,000.

I really think cattle can compete with a 529, IF you market correctly.

This is what I am doing for my kid.  Now according to this example the 529 out performed my cattle plan.  Thing is the 529 didn’t give a sense of accomplishment, or ownership like the cattle do.  The 529 didn’t teach responsibility of paying bills, buying and caring for a car, and cattle, managing cash flow, or understanding where money comes from, and marketing skill.  The 529 didn’t teach the kid how to run a business, and looking at how many animal science and ag business majors corkscrew operations into the ground college didn’t teach that either.

So when my kid is 18 there will be three choices to make.  1) Go to college, keep the cattle and hire dad  to take care of and manage it and use the income for school, or sell them off and go to school, with the goal of graduating debt free.  2) Sell them off and pursue something else.  3) Continue to do the cattle thing.  And I can tell ya with a track record and cash flow like this even at 18 a banker will finance the youngster, with daddy’s supervision of course.

Now suppose I’m half right.  And after 18 years you only have a net of $70,000.  Still pretty damn good.   What if I’m half wrong and by 18 you have $300,000?  Wow!

My kid is two and already owns 6 calves all on her own.  But she gets to take advantage of my buying power too.

Dave Wright President of Independent Cattlemen of Nebraska (ICON) said something to this effect once “I raise kids, the cattle are there to help me teach them life’s lessons”

 
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Posted by on March 11, 2013 in Uncategorized

 

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Valentine for the Farm Wife

Fifteen years ago my life changed in a big way.  I did not realize it at the time.  Looking back on it now it was a HUGE pivotal moment that set a lot of things in motion for me.  Fifteen years ago today I met the woman who became my wife.

I do not think many people realize that who they choose to marry has such a huge impact on their life.  I have several friends who have gotten a divorce.  I asked them one question and got the same answer form each one of them.  I asked “Why did you marry her anyway?”  The answer, “I settled”

So many times today we have a sexual relationship with the person we are dating.  So many times this causes us to not see the person for who they are, and we don’t really get to know them.  (Don’t misunderstand I am not judging.  I am guilty of this.  That is how I know).  Both sexes are guilty of this.  Years later when the blinders come off this may cause “things to blow up”.

I will not tell you that I am relationship expert.  Often times my open honesty and directness puts a lot of my relationships under such heavy strains/tensions.  When I met my wife she was a senior in high school, I was 20, a college dropout, and had a dead end job that I hated, but I had dreams.  She was going to the snob college in NE,  several months after I met her.  So I figured our relationship would not go anywhere.  As we continued dating I thought for sure she would meet someone else.  Like some rich college boy with nice clothes, whose parents had money, and all that shit.  We dated for eight years.  I knew one thing.  People change a lot at that age, so no point rushing in (That’s when my friends got married).

During eight years we went through a lot.  Good times and bad.  In all honesty the reason we are together today is because she did not give up.

She was not a farm girl.  She is every bit a cattleman’s wife today though.  I have hired boys, that is what they turned out to be, from the local ag college to help here.  My wife will out work em.  At branding she made them look like sissies.  This one time we were baling small squares, and  to this day I still do not understand why she could not follow simple instructions.  I was on the rack and she was driving the tractor.  I gave her clear hand signals what I wanted her to do.  She did not do it.  I tried my best to yell over the top of the baler, so she could hear me in the cab.  She just turned the a/c a bit cooler and the radio a bit louder and paid no mind to me.  She knew by the time we got the rack loaded I’d get over it.

When speaking to beginning farmer groups, I like to tell the story about Andre Agassi .  These young people are too young to know who he is.  He was the best tennis player in the world at one time.  He married Brooke Shields.   She did not support his tennis career.  Sometimes she would get up and leave in the middle of his matches.  His career corkscrewed.  He wasn’t even in the top 100.  He suffered an injury, and eventually drug use.  Many assumed his career was over.

Andre divorced Brooke, and started seeing Steffi Graf.  She supported his tennis career, (she was a tennis player too).  Andre rededicated himself to the game, and eventually became the best again.  They started a family and are philanthropists.

My point is, who you marry has a big impact on your life, and can affect your level of success in life.  I doubt if I would have had as much success as I’ve had, especially at a young age, without the support of my wife.  Like most farm wives she gives way more than she receives.

Now I’m gonna shift gears.  I think it is of utmost importance to involve her in your operation.  I don’t mean have her out in the worst conditions day after day.  Having her out there once in awhile, especially on a bad day will give her an appreciation why you come home grumpy sometimes.

In all seriousness though.  Drag her along to the CPA’s office.  Take her to the Lawyer’s office.  Take her to meet with the financial advisor.  Keep her updated on what is happening day to day on your operation.  This way if something should ever happen to you she knows where/who to call.  I don’t care if you are in your 20’s, 30’s or 40’s.  Get your affairs in order.  Have life insurance.  Keep her updated on things, so no one can take advantage of her.  Get a will.  Guys this is your responsibility.  Take care of her.   After all she is your cheapest employee.  Most times she will work her ass off for a hug and a thank you.

 
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Posted by on February 14, 2013 in Uncategorized

 

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Cattle Biz Headlines

It’s been what, six weeks since my last post?  A lot has happened in the world during that time.  I like to troll around on social media and see how people react to it.  I have come to think I must be kinda dyslexic,  because I see things differently.  Over the last few months I have got to meet a few readers of this blog.  The biggest compliment I get is “I don’t always agree with you, but damn, you sure made me think about it.”

Here very recently my Facebook and Twitter feeds have been full of the news of Japan taking beef up to 30 months of age. (If we have not met in real life do not friend request me on Facebook.  Follow me on Twitter @mrcattlemaster instead)  I saw very little about Cargill closing the Plainview plant.

One of these will affect the cattle biz in a big way.  The other not so much.  While everyone has their pompoms out for the Japan deal I am talking to guys who are facing reality.  Think for a moment.  Will Japan suddenly import more beef from us?  I doubt it.  They will probably just import cheaper beef.  See their economy is imploding in a huge way.  In case you didn’t know they are in way worse shape than the EU or the US.  We are printing $4 Billion a day to prop up the stock market, just to give you some perspective.   (Don’t think that funny money doesn’t spill over to commodities.  If you are in the market in any way get out!  I don’t care to hear your hedging BS.  You tell me that you obviously don’t know what hedging is).  So what will this do for the market?  I have seen very little affect so far, and I’ve been buying cattle just about every day since that announcement.  I think it will be difficult to gain much when we are in a currency war.

One thing that has had a profound affect is the closing of the Plainview plant in TX.  There are groups that think this will be a huge positive for our state.  Couple that with the Japan news and man they got their pompoms and megaphones out.  “NE is the beef epicenter of the world”.  Um ok.   I currently have the privilege of buying cattle for a big feed yard.  The owner tells me that the National buyer has not been there to bid cattle for a couple of weeks.  He called the guy up to find out why.  The buyer told him that he didn’t need to buy cattle in NE anymore.  They can get all the cattle they need in TX and KS.  Less competition down there now.  This leaves only a few major buyers in the yards here.  I spoke to the Cargill buyer in my area last week.  He told me that if I had some fats that I better get them on his list because they are filled for the next three weeks.  As show lists continue to grow I can only imagine the wait will get longer.

Learn a lesson from the sheep industry.  It is my understanding they had three for four packers.  Sheep producers were making money.  When I was in NCBA’s YCC group a few years back there was a buyer from Tyson in our group.  He told me that packers hate each other so bad they will buy cattle at a loss just so the other packer can’t own them.  That is what the sheep producers had going on.  One packer finally had enough of buying at a loss just to keep the doors open.  So they closed.  This left only two or three packers.  The reduced competition has allowed to the remaining packers to bid less for sheep, resulting in the packer making money and the sheep producer losing money.

I do  not understand the meat complex we have in the cattle biz.  Guys, unless you are a packer you sell CATTLE, not beef.  Japan in this case is not your customer.  The packer  or feedlot is your customer.  So do you need more end consumers or more customers?

 
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Posted by on January 31, 2013 in Uncategorized

 

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Cycles

I do not pay very  much attention to cycles.  I will admit they do exist.  I see market cycles within the week, the month, a six month period, and even the year and beyond.  The thing is due to the way I market cattle the cycles do not matter at all to me.  Before I learned how to market cattle on a real time cash flow reckoning, I paid a lot of attention to this stuff.  I was listening to the wrong people.  Good thing I got that straightened out or else I’d probably be an unemployed production welder right now. (no offense to the welders out there.  I love welding myself.  It’s just that there have been a lot of layoffs in my area).  I have noticed another cycle.  The cycle of the cry baby

Right now we are somewhere near the top part of their cycle.  They tend to emerge when losses in the cattle biz go beyond $200/head, anything below that we do not hear from them very much.  So I conclude that any losses around $150ish and lower are acceptable losses.  (snorf)  There’s a sweet sexy term, acceptable loss.

I’ll give you a few examples.  In the middle of the last decade 04-05 the “experts” were predicting time periods when we would begin exporting to Japan again after BSE.  So the cattle feeders would load on a certain weight of cattle that would be market ready at that date.  Only the boarder did not open around that date.  These guys would bid a huge premium into feeders, thinking they would get it back when exports resumed.  They really believed they would get $10/ctw more for fats when exports resumed.  They did this several times for over a year.  Losing big money every time.  “It was all Japan’s fault.  They weren’t playing nicely and cooperating.  It was Canada’s fault, after all that is where the dirty cow originated form.  What am I to do?”  The peak cycle of the cry baby

I saw it again in 08-09 when the market fell out of bed.  In summer of 08 corn was high, fuel was high, feeders were high, fats were high.  Then bang!  This housing bubble thing popped.  “During the high run up in stocks the damn hedge fund managers put their money in commodities.  The CME has more corn contracts for bushels than we have bushels.  It’s just all funny money and bullshit contracts, that never should have been printed to begin with.  Then when stocks fell, they pulled out of commodities to buy cheap stocks, which is where they belong anyway, in stocks, and crashed our markets too.  Them assholes!”  Early 09 was peak cycle for the cry baby.

Here’s one that is more current.   Everybody is crying over the drought affecting their operation.  Costs are high (not as high as they were.  Feeders and corn were both higher than they are now).  But hey, it’s not my argument.  “Forage prices are too high.  I can’t afford them so I am forced to buy poorer quality forage.  We need rain.  The price of corn is too damn high.  We need to repeal the RFS.  What is the governments deal anyway?  Picking one corn user over the other.  It’s all ethanol’s fault.  We keep losing acres of forage production and pasture to the plow to raise corn for ethanol”.  Thing is folks I don’t know if this is even the peak yet.  “We need a Farm Bill!  We need to fix this fiscal cliff problem”.

Well I got some good news for you guys.  The 10 year cycle peaks on years that end in 3 (snorf)

Do you notice something here?  They always have something or someone to blame for their short comings.  Bud Williams told me once that in his lifetime of observing and working with ranchers that they are more than happy to lose money as long as they have someone to blame it on.

A few years back I got to go golfing with a few big shots.   During the day we were discussing the cattle biz, sipping whiskey, and smoking cigars.  They were all bragging, and yes it seemed like bragging, about how much money they were losing.  One asked me what my worst move was of the year so far, and I told him I made $17/head.  I got laughed at!  They said $17/head wasn’t worth scratching their nuts for.  I didn’t understand, still don’t.  It’s cool to lose money and not cool to make a small profit?  WTF!?

The cry babies are busy right now.  Last week was cattlemen’s convention in my state.  I didn’t go.  I was busy.  So this weekend I tried to get caught up on the news.  There they were on the TV and news articles bragging about how tough it is.  How resilient they are.  But oh man “If we don’t get some help, or relief soon it will be real bad and people will be out of business.”  That is another natural cycle folks.   Businesses fail all the time.  Bankruptcies happen all the time.  And have since the beginning of civilization.  And yet we have managed to make it to the point we are at now.  A time of such great abundance.  The cry babies didn’t make that happen!

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Posted by on December 11, 2012 in Uncategorized

 

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