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Monthly Archives: April 2012

From the Mail Bag

You are a great writer, and you have some excellent points! I enjoy reading it! While I appreciate your rally to have an operation plan – a GREAT and essential concept – along with good record keeping. I have these nagging questions in the back of my mind. You talk and sound like someone who “pulled themselves up by the boot straps.” A self made man. Am I right? You are very blunt and truthful in your blog post so I hope you will not be offended by an observation.

You say you are a 5th generation rancher – so I assume your family’s land is paid for – owned out right. So do you personally own the land that you run your operation on? Or do you rent/exchange of labor or an agreement with your folks?

You don’t mention anything about saving back or budgeting for buying land, or making payments? Or saving to have enough cash to make a down payment on a farm. What about equipment needs – how was that handled? It just seems a lot is lacking from your personal story that wouldn’t necessarily be true of a beginning farmer – with just a dream and a drive to succeed.

You fail to mention that you also need capital. You would not be able to buy a farm without some startup capital – down payment and proof of repayment ability. That you would have probably borrower the money to purchase cattle as well. That’s two hefty payments to made yearly. The cattle and equipment loan could probably be paid off in seven years, the farm – probably the next forty. Not to mention a line of credit that one might need to pay the bills until the cattle are ready for market.

So while I applaud you for making good decisions and encouraging plans, record keeping etc. If the above assumptions are true – you had a lot more going for you than most beginning farmers I have come across. Please correct me if I am wrong about your situation.

There I said my peace. Thanks!

 

 

I thought this was a great comment/email.  In the past I have only responded to one message I’ve gotten.  The person that sent this one makes some excellent points.

There are a lot of topics here that were addressed.  You kind of hit me in a shotgun pattern so to speak.  I will start by saying this.  When I blog I try to keep to just one pin point topic and try to make it like a woman’s skirt.  Long enough to cover the subject, short enough to be interesting.  I do plan on covering the things you mentioned.   Such as saving, debt, dealing with the bank, equipment and so on.  I will say this.  When I write I only write about what I know.  In other words what I did or am doing.  This can’t be looked at as a road map for others.  Just a place to get ideas that can be tweaked to fit a situation.

I wanted to set aside a paragraph to address your comment about land, equipment and payments.  I do not understand the obsession about owning these things.  I have had thousands upon thousands of cattle through here in the last decade, and finally bought a squeeze chute a few weeks ago.  I had been using an automatic head catch and portable panels as the main components to my working facility.  For years when I fed cattle I wore out a lot of buckets, before I got a mixer wagon.  The two I’s that work against you are interest and iron.  Iron rusts, and interest works against you even when you are sleeping.  Now about land.  That is a separate business.  I do not own any land because it should not be a part of an operation until you are wealthy.  There are only three legs in the cattle biz.  Cattle, money, and feed. Notice I didn’t mention land.  A bar stool will stand up with only three legs right?  Those are the three legs you got to have.  The good news is you do not need to own any of them.  Sounds weird I know.  I will explain it in the future. (I know it seems like I’m kicking the can)  You mentioned it would take forty years to pay for it.  What if I told you that you could do it in fifteen or less?  Depending on how many acres you buy)  You would doubt me.  I think it is a matter of putting first things first.  I will cover that in the future because it seems to be the subject everyone gets so hung up on.  Right now I rent.  The nice thing about that is I can deduct it as an expense on my taxes.  If I were making a land payment I could not do that.  I could only deduct the interest.

Now the family matter.  I have only let a few close people into the barn, so to speak.  So I may hold back a little here.  I asked my wife just last week if I am in fact a 5th generation farmer of first.  So you’re observation is correct.  I will say this.  I started my feeding/ back grounding operation as a niche in the family farm.  When it started to make money, I found out rather rudely that sweat equity is worthless, and verbal agreements with family are meaningless.  This “niche” was then became a necessity.  I put a lot of energy and resources into growing it.  It did not take long to grow it into a full time sustainable operation.

So when you say that I boot strapped, that is correct.  I had family try to stop me from growing my business.  So I had to be creative at times to overcome challenges.  I could tell you horror story after horror story about things that went wrong in the family.  So the assumption that I have paid for land and the family is debt free is incorrect.  I will share this observation with you.  I have noticed that first and second generations tend to go through a hardening off phase caused by the struggles of building an operation.  The third and beyond generations are softer because they are far enough removed from those struggles, and do in fact inherit a lot free and clear.  I do not know if I will inherit much.  My mom has a sister that is entitled to part of my grandparent’s estate.  That means land sales I’m sure.  I have a sibling who married into a family, that farms near here.  Given all that, it is a great relief that I did what I did in starting my own business.

 
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Posted by on April 27, 2012 in Uncategorized

 

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Mad Cow = Distractions= Beginning Cattlemen

BSE made the news again.  I have a different view point of it than most people.  Past experience tends to shape how we view things.  Everyone else seems to be a bit shaken by it, while I kind of embrace it and laugh about it.  My Facebook status right now is “We have 140 breeds of cattle and the black and white ones seem to be the center of most of our problems.  Before Angry Birds came along Holsteins gave us Mad Cow.”

How did I come to this paradigm?  It was back when I was really still struggling to get my cattle feeding enterprise off the ground.  I had been buying calves and co-mingling them.  All I could buy at that time was the singles, the sorts, and well junk.  I would back ground them and resell them.  At the time if I could get about 30 to 40 head put together in a week that was pretty good.

My pen was empty when we had the second inconclusive mad cow.  Everybody panicked.  I went to the bank to get a loan to buy cattle.  They looked at me like I lost my mind.  “Don’t you know what’s going on?” they asked.  Every bank in town turned me down.  At some of them I didn’t even get the chance to sit down before being laughed out of the place.

Here is what I did.  I had some money that was in a CD.  It was put there after my aunt was killed in a car accident.  My grandmother divided up her retirement money between us grand kids.  It was to be used for college.  But as I stated earlier in another blog, I dropped out.  I had scholarship money that covered it when I was there.  I also had another CD that my great grandmother put together for me to use for college.  I cashed them both in.  Paid the penalty and went to the sale barn.  Remember those penalties are only there to make you feel trapped.

I had budgeted everything out.  I knew how much money I needed for propane to heat my home.  How much I needed for gas and food for each month, and so on.  I saved that amount back.  I turned down the heat in my house.  It was cold enough in here that I slept in a hoodie under a few blankets.  I quit driving around so much, and so on.  I already had enough feed to background several groups of 40 head for the rest of the year.

So I tripled my efforts.  I bought about 100 head.  I could background them for a few months.  Put a couple hundred pounds on them, and then I sent them to a custom yard.  There I valued them, so I had a check and money to live on for a while.  I financed the feed, so that was deducted from my check when I sold them as fats.

Here’s what happened.  I made a shitload of money.

When I was buying those calves people tried to talk me out of it.  I even had a guy here last week that recalled I did that.  He told me people were really worried about me buying those cattle.  They really got cross with me when I ignored their warnings.

Here is what I knew.  None of the borders had been reopened since the first cow with BSE was discovered.  So we did not lose any trade deals.  Yet when that cow came up inconclusive the market dropped about $40 a hundred here.  Get it?  We really lost nothing yet the market was sustaining that level before that cow was discovered, so I figured it was only a matter of time before the market came back.  To my surprise it came back in only a few weeks.  Of course that was due to the cow coming up negative on the long test.

Here is my take away.  Sometimes the best time to be successful is when everyone else is distracted.  Maybe today’s mad cow will provide some buying opportunities.  Maybe not.  The thing is, this is the type of thing you need to keep your eyes open for, and have the balls to cash in.  I did this when I was in my early twenties, and it greatly accelerated the growth of my operation.

 
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Posted by on April 25, 2012 in Uncategorized

 

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Commie Rules

I will get back to the beginning farmer blogs soon enough.  I just had to get this one out there

I ran across this a week and a half ago.  I’ve been thinking it over.  How much of this have we seen come true?  How much of it is happening now?  How much of it has our culture come to embrace?  Especially the younger generation?  Why do they accept it so easily?  How can we stop it?

I have been to socialist communists countries and one reason I think it is accepted here is under the words “we gotta level the playing field”

Be sure to listen to the video at the bottom.  It is a speech from Ezra Taft Benson who was Secretary of Agriculture in the 1960’s.

On Jan. 10, 1963, Congressman Albert S. Herlong Jr. of Florida read a list of 45 Communist goals into the Congressional Record. The list was derived from researcher Cleon Skousen’s book “The Naked Communist.”

1. U.S. should accept coexistence as the only alternative to atomic war.

2. U.S. should be willing to capitulate in preference to engaging in atomic war.

3. Develop the illusion that total disarmament by the U.S. would be a demonstration of “moral strength.”

4. Permit free trade between all nations regardless of Communist affiliation and regardless of whether or not items could be used for war.

5. Extend long-term loans to Russia and Soviet satellites.

6. Provide American aid to all nations regardless of Communist domination.

7. Grant recognition of Red China and admission of Red China to the U.N.

8. Set up East and West Germany as separate states in spite of Khrushchev’s promise in 1955 to settle the Germany question by free elections under supervision of the U.N.

9. Prolong the conferences to ban atomic tests because the U.S. has agreed to suspend tests as long as negotiations are in progress.

10. Allow all Soviet satellites individual representation in the U.N.

11. Promote the U.N. as the only hope for mankind. If its charter is rewritten, demand that it be set up as a one-world government with its own independent armed forces.

12. Resist any attempt to outlaw the Communist Party.

13. Do away with loyalty oaths.

14. Continue giving Russia access to the U.S. Patent Office.

15. Capture one or both of the political parties in the U.S.

16. Use technical decisions of the courts to weaken basic American institutions, by claiming their activities violate civil rights.

17. Get control of the schools. Use them as transmission belts for Socialism and current Communist propaganda. Soften the curriculum. Get control of teachers associations. Put the party line in textbooks.

18. Gain control of all student newspapers.

19. Use student riots to foment public protests against programs or organizations that are under Communist attack.

20. Infiltrate the press. Get control of book review assignments, editorial writing, policy-making positions.

21. Gain control of key positions in radio, TV & motion pictures.

22. Continue discrediting American culture by degrading all form of artistic expression. An American Communist cell was told to “eliminate all good sculpture from parks and buildings,” substituting shapeless, awkward and meaningless forms.

23. Control art critics and directors of art museums. “Our plan is to promote ugliness, repulsive, meaningless art.”

24.Eliminate all laws governing obscenity by calling them “censorship” and a violation of free speech and free press.

25. Break down cultural standards of morality by promoting pornography and obscenity in books, magazines, motion pictures, radio and TV.

26. Present homosexuality, degeneracy and promiscuity as “normal, natural and healthy.”

27. Infiltrate the churches and replace revealed religion with “social” religion. Discredit the Bible and emphasize the need for intellectual maturity, which does not need a “religious crutch.”

28. Eliminate prayer or any phase of religious expression in the schools on the grounds that it violates the principle of “separation of church and state”

29. Discredit the American Constitution by calling it inadequate, old fashioned, out of step with modern needs, a hindrance to cooperation between nations on a worldwide basis.

30. Discredit the American founding fathers. Present them as selfish aristocrats who had no concern for the “common man.”

31. Belittle all forms of American culture and discourage the teaching of American history on the ground that it was only a minor part of “the big picture.” Give more emphasis to Russian history since the Communists took over.

32. Support any socialist movement to give centralized control over any part of the culture – education, social agencies, welfare programs, mental health clinics, etc.

33. Eliminate all laws or procedures which interfere with the operation of the Communist apparatus.

34. Eliminate the House Committee on Un-American Activities.

35. Discredit and eventually dismantle the FBI.

36. Infiltrate and gain control of more unions.

37. Infiltrate and gain control of big business.

38. Transfer some of the powers of arrest from the police to social agencies. Treat all behavioral problems as psychiatric disorders which no one but psychiatrists can understand or treat.

39. Dominate the psychiatric profession and use mental health laws as a means of gaining coercive control over those who oppose communist goals.

40. Discredit the family as an institution. Encourage promiscuity and easy divorce.

41. Emphasize the need to raise children away from the negative influence of parents. Attribute prejudices, mental blocks and retarding of children to suppressive influence of parents.

42. Create the impression that violence and insurrection are legitimate aspects of the American tradition; that students and special interest groups should rise up and make a “united force” to solve economic, political or social problems.

43. Overthrow all colonial governments before native populations are ready for self-government.

44. Internationalize the Panama Canal.

45. Repeal the Connally Reservation so the U.S. cannot prevent the World Court from seizing jurisdiction over domestic problems. Give the World Court jurisdiction over domestic problems. Give the World Court jurisdiction over nations and individuals alike.

http://youtu.be/AQ7LcplfkgY

 
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Posted by on April 23, 2012 in Uncategorized

 

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Concept 2

Successful business people don’t just focus on what to do.  More importantly they focus on what not to do and they stop doing it.  For example my family has been in the cow/calf business for five generations (me being the fifth).  I also started a registered Angus herd from scratch, and had that business for over ten years.  Then one spring I sold a bunch of pairs and a big bunch of the registered herd and replaced them with stockers.  The stockers made me more money, and fit perfectly with my back grounding/feeding enterprise.  A couple years later I sold off more of the cow herd and ran more stockers.  My point is just because something has been in your family’s core business for generations, doesn’t mean you should continue to do it.

Now I told you I started the feeding part of my operation from scratch.  I also farm with my family.  I get a lot of pressure to back off the cattle thing and focus more on farming.  This does create a bit of friction.  Successful people do not rely on the approval of others to pursue their calling.  They have the audacity to take initiative despite social pressures, rather than because of them.  They are emotionally committed to doing what they love, not by being loved by others.  Most of us worry about being loved rather than being what we love.

Now you all know, or have heard, that you should do what you are passionate about.  If you are not doing something you are passionate about you will half ass it.  It will drain your energy and your attitude.  I’ve been there done that and it sucks.  I can also tell you that you will be the first one in line when the layoffs come.

So search your own heart, for out of it flows the issues of life.  You will find something that you believe you were born to do.  You will catch yourself saying “Man. I can’t believe I get paid to do this”.   This is where your motivation will come from moving forward.  You will begin to try and learn all you can about the business.  You will start to seek out people to teach you new skills.  You will no longer have a problem getting out of bed in the morning.  You will eat, sleep and live your future.  You will establish your own identity in the world.

 
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Posted by on April 18, 2012 in Uncategorized

 

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Concept 1

One thing you will need to have before you can begin in any business is a concept.  This will be the focal point of your plan I blogged about earlier.  I am going to use the cattle biz as my focal point for this blog (like you didn’t see that one coming).   There are many areas in the cattle biz, seed stock, commercial cow/calf, stalker/backgrounder, feedlot.

You must first determine what it is you can handle.  For example some people can only handle cows and calves.  Some can only handle heavy feeders and not three weights.  If you buy the kind of animals you can not handle it is an expensive lesson you are going to get to learn.

One way to avoid that expensive lesson is to know yourself.  It is tougher than a lot of us think.  You need to know what it is you really want to do, and what you don’t want to do.  You need to know what you can do and what you can not do.

If you try to do something you don’t really want to do, you will do a poor job of it.  If you do a poor job of it you can damage your self confidence. Which can begin a downward spiral.  I know this guy who will only buy steers.  He knows there are times he could make more money if he’d buy heifers.  Thing is he knows he does not want to deal with heifers and might not do a good job with them so he sticks to steers.  I know another guy who is in his mid twenties.  He wants to get into cattle bad.  I told him to background some calves.  It’s faster paced and cash flows every few months.  He didn’t think that was a good idea because he didn’t want to be married to them.  Meaning he didn’t want to have to be there every day to feed them.  He wants cows so all he has to do is check on them once a week.  That was the smartest thing he could have said to me.  If he had to skip his partying to feed calves on the weekends he would grow to resent those calves.

 
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Posted by on April 17, 2012 in Uncategorized

 

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Swim

I get asked all the time what my thoughts or advice are for young people who want to get into agriculture.  I have been asked to give presentations on this topic.  What I tell them is really unconventional, and catches most people off guard.  This blog will be about one of the very first things a person should do.

The first thing to learn how to do is swim.  If life is an ocean and we are all in it you need to know how to swim, otherwise you will drown with your friends.   I used to have a lot of friends.  We had a lot of fun, drinking, hunting and so on.  I was in my late teens early twenties.  I was trying to raise cattle and had dreams of making it a big deal one day.  It seemed the harder I worked the bigger mess it was.  My buddies were always pulling me away to go do this or that.  When I got home to do chores it was late and I didn’t give a shit, or in the morning I was really hung over.

Then I kinda had some falling outs with a few of them.  Eventually the others quit inviting me to things because I quit going.  Here is the funny part.  After I got away from that mess, things improved for me.  I started having some success.  I had a new bunch of friends.  As I got even more momentum those friends started to get sideways with me.

Here is the thing.  People that are too weak to follow their own dreams will always find a way to tear down yours.  It takes a lot of inner strength and belief in yourself to break away from them.  You have to go out on a limb to be successful, and it is lonely out there.  You will get made fun of.  You can always go back to the comfort and the acceptance of your buddies.  You can crawl back from the limb and rejoin them on the trunk of the tree.  My guess is they will probably pick on you and remind you to never try that again.

So what if you do have some success?  Your friends will throw darts at you.  Their words may hurt.  I have seen people have some success in life, and when their friends poked fun at them for it, they quit trying so hard.  Next thing you know they were back in the same rut as their buddies.  My friends tried this and that is what led to the falling out.  I left them.  The trick is to be able to swim

Keep kicking.  Find yourself a mentor. Learn from their firsthand knowledge.  I did this.  It involved some travel and time.  I want to be the best.  In order to become the best I knew I had to learn from the best.  I will give you a hint on where to find the best, they are not in the universities or colleges.  And most have never won an award or special recognition.  People that were mentored are catapulted years ahead of their age group.  While my age group was in college majoring in parties, I was being mentored.

Network with people who are better than you.  I feel it is somewhat important to have someone to chase.  Don’t make it a sick obsession.  As long as you can see someone who is ahead of you and better than you are, you will push yourself to improve your skills.  Here is the thing.  You will eventually miss the intellectual stimulus that is critical to entrepreneurial and physiological mental health.

I want to stress this point.  Even though you are learning from others it is important to do your own thinking.  Question your mentor.  Use the tools you already have.  Don’t be like the Tin Man or the Scarecrow and go to the Wizard to find out you already have a heart or a brain.

So what happens if things don’t go right and you fail?  Stay out of the trap of seeking co-misery.  Keep kicking.  Keep swimming.  You see the co-misery trap all over the country.  It is the farmers that feel rotten about themselves and routinely join to talk about how hopeless it is.  The one thing that will make them feel worse is a farmer who does have success through his own initiative.   These guys will wage physiological warfare on anyone who shows signs of positive thinking.  They will nag at you and tell you all the reasons why what you are doing wont work.  If you are sensitive to this there is only one cure.  Stay the hell away from them at all costs.  If you are wired like me you will love them hating on you.  It motivates me.

Keep kicking.  Don’t be afraid to take a risk.  The old timers in the coffee shops that bitch about life will tell you a story about how if they had taken that one chance they would be better off.  Then wait for it.  It will come.  The whole list of excuses of why it wouldn’t have worked anyway.  Decades later, still making excuses, still full of self doubt, still stuck in the co-misery trap.  Don’t be that guy.  Swim.  Keep kicking because a person only floats when they are dead

 
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Posted by on April 11, 2012 in Uncategorized

 

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Plan

This time of year I get all kinds of phone calls.  High school seniors call and ask me where they should go to college.  College grads call and ask for a job or a job lead.  Local unemployed people call and ask for a job as a ranch hand.  Somebody else will call looking for a bull or some grass calves, or some semen.  Who knows.

There are two conversations I find extremely troublesome.  The one I will focus on is the youngster who wants to get started in the cattle biz.  This ranges from a high school student to a college grad.  They will call me with an idea of how they will get started.  I bet you can guess the most popular part of the industry they want to get into.  The registered cattle biz, followed by buying baby calves and raising them to fat and selling the beef quarters.

I’m not going to discuss these ideas in this blog because that is all they are is ideas.  What I do is question these youngsters about their plan.  You know what?  They don’t have one.  Guys you have got to have a plan.

I can ask them what it will cost them to run a cow, or feed the calf.  They don’t know.  What if the cow comes up open, then what?  Where will you get the feed to finish the calf?  Where are you going to purchase these cattle?  How are you going to market them?  What kind of return will you get?  Here I would like to point out there has never been a thought about making a profit.  The goal is to just get by and hopefully expand over time.  I even had one kid tell me he will raise his own replacement heifers because they are free.  There is never a mention of budgeting or cash flow.  Just a vision of a small feedlot full of fancy black baldy steers, or a pasture of registered cattle with that persons brand on them.  I like the clarity of their vision.  It makes it appear real to them and that leads them to believe it is achievable.

If there is no plan though, how are they going to make it happen?  When I got started in the registered biz I did not have a plan.  I thought if I just raised better cattle than everybody else the buyers would just show up.  A lot of kids have that same idea.  When I started feeding cattle, I had a plan.  I know what the calves were going to cost me.  I knew what my feed costs were going to be each month.  I knew the packer buyers to call and had an idea of how I was going to sell those cattle and I had a plan to buy back replacement calves.

It was the feeding part of my operation that allowed me to quit my off the farm job and raise cattle full time.  I think the key was that I planned my work then I worked my plan.  I had it written down.  When the grim emotions would creep in at 3 a.m. and wake me up at night, I would just stick to my plan and fight the demons off.  This kept me from making some irrational decisions based on fear, and things always worked out ok.  Not  always like I hoped they would.  The thing is I made some money and was able to stay in business.

It amazes me every year, how people will get into the cattle biz without a plan, or even without the thought of making a profit.  No other industry in the world would try that.

 
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Posted by on April 10, 2012 in Uncategorized

 

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