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Shoo Fly

Every year there are numerous articles about fly control. All of them revolve around using some kind of gimmick for control. Now it’s no mystery why these freebee publications will only write about gimmicks that siphon money out of the pockets of cattle producers. It helps them sell advertising space. They probably also don’t realize there is another way: well managed grazing

stormcattle

I know there are people that read this and want me to provide research to back my claims. I don’t care for scientific research, no matter who conducted it. Here is why, science only tells us how we should act if we want to attain definite ends. So for that research to worth a hoot my cattle, the flies, the weather, and other factors in nature must all act a certain way. Ha! Good luck with that.

Here is what happened for me with better managed grazing. I started putting my cattle into groups of 200 head or more. I use poly wire to split the pasture into smaller grazing cells, and rotate daily to every third day. Cell size will vary based on terrain and water. I rent several different pastures, that are only a few miles apart. I will rotate around one then load the cattle up and haul them to the next pasture, then rotate around that one. (I haul them because I have to cross two major highways, and am surrounded by irrigated corn with no fences around it and I have no help)

One day when I was hauling cattle from one pasture to the next, I had an extension researcher riding along with me. He did the typical routine of rolling up the window every time I loaded and unloaded. He finally noticed that I was not doing the same, and he remarked that there were not any flies getting into the truck. We then looked at the cattle and there were little to no flies on them!

At first we were only interested in how my new grazing system would affect my grass, now we were both interested in following up on how it would affect my cattle and flies. For the next month I had the same results, until I rotated up against the perimeter fence and the neighbor’s cattle bunched up next to mine. Then I had flies, a lot of them. I also ended up with their bull too, I was running stocker heifers.

After loading the cattle up and then moving to the next pasture I still had the flies for a while. This pasture has no neighboring cattle. I rotated as I needed to and eventually the fly load lessened. I think this is because my grazing system breaks the fly cycle. In the short amount of time it takes for a fly to lay an egg and for that egg to become a fly my cattle are gone away from that area.

I have only done this for two years, and have noticed a big difference in fly control. I mentioned the neighbor’s bull for a reason. Long story short they ended up paying for a preg check on my cattle. That got expensive for them in a hurry. The following year, they didn’t turn their cattle out into that pasture until I rotated away from the perimeter fence. That year I didn’t end up with their flies or their bull. To me that one variable right there is why science doesn’t mean much out here. It proves how other people’s sloppiness can affect your plan.

We all know that parasites can affect cattle performance and their behavior, so I don’t feel I need to get into that, to keep this short as possible. I do feel that I should do some cost comparisons.

For my grazing system I had to invest in a fence charger, rolls of poly wire, pigtail posts, a water tank, valve, and portable water line. I bought extra poly wires and posts so I could build fence several cells ahead when I have time, so all I have to do is move the cattle which only takes a little while. My total cost for all this was around $5000. That is a lot of money. Thing is I started this program to help improve the pastures, and it has. This is a small investment when compared to that. Also at the end of the year I still have all that equipment.

hose

If I were to spray my cattle for flies it would cost me $400 for a concentrated solution, that they recommend I mix with water and diesel fuel. The fuel would cost an additional $36. Its by far the cheapest solution. There is labor involved to gather all your cattle in, unless you use a rubber. Here’s the rub for me. Why do you want soak your cattle in a little bit of poison over and over? Second, these products will also kill the good bugs that are essential for a healthy pasture. Not to mention the pests you are trying to get rid of will come back before the beneficial bugs do. How do you assign a cost to that? I am not sure but I can assure you it would be high.

Fly tags would cost me almost $2000. I have used fly tags in the past and they are just crap. In fact when I buy my grass calves, if they already have fly tags in their ears (which is the wrong time to even have them in, leading to the flies building a resistance to them) I cut them out, even though they are brand new.

Then there is using flow through control in your mineral. I’ve tried this and it didn’t make a whole lot of difference. Also I have never gotten a straight answer on how it affects dung beetles. That literally could be a million dollar question that I have not yet got an answer to. If I were to add Altosid IGR to my mineral it would cost me an additional $1600. If I used it in tubs for 60 days it would cost me and additional $1900. (cost difference in tubs with compared to without, so you would also need to add in the cost of the tub/mineral itself) Then begs the question of what do you do with the empty tubs. Around here no one takes them if they are plastic. I can’t help but notice that people around here just leave their empty tubs accumulate in their pastures. Nice uh?

Now for Vet Gun. If I were to purchase this thing it would cost me $1250. That includes CO2 cartridges, gun, and the balls. If I were to go out and start shooting a couple hundred head with this how do you suppose it’s gunna end? If I were to walk into a crowd of people and start shooting them with a paintball gun is the crowd just going to stand there? Heck no! Plus what if I miss and hit one in the eye? To me this just looks like it don’t end well.

Then there are predator wasps. I have a little experience with these guys. I have noticed a little affect with them and the cattle seem to hang around the area where the wasps were. I plan to experiment with them more in the future

wasp

Now I didn’t start my grazing system to control flies. I did it so I could look at all my cattle in just a couple hours (I couldn’t do that when I had 50 here 200 there 20 in another pasture and so on. There was too much travel time between pastures). I did it to improve soil and grass, and cut down on less desirable species, while lightening my work load. Using my system I grow more grass. Assuming I only grow a mere 150# an acre more grass, and it’s valued at $60 a ton, there is my $5000 initial investment for water line, tank, posts and poly wire in just the first year! And just a reminder, I still own these things. With the other fly controls, you spend money, use the product and it’s gone. You also are not improving rangeland, or wildlife habitat.

All of these controls take time/labor except the mineral. All of these have a negative impact except the controlled grazing and the wasps. To me it comes down to what kind of person you are. Are you really a steward of the land or not. Are you really a stockman or not. It comes down to your work ethic, and managerial skills.

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Posted by on April 21, 2016 in Uncategorized

 

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Slaughter Trucks

A year and a half ago we were on vacation when I noticed a bunch of gooseneck trailers all turning the same direction at an intersection. I told my wife to follow them and they lead us to the local salebarn and it was auction day. My wife waited in the café while me and my daughter, who was three at the time, went out back to view the cattle. We walked back across the parking lot to the café, and my daughter asked me “daddy, where are all the Peterbilt’s?” I told her that calvies don’t ride to town in Peterbilts in that part of the country. “Well, if we buy some calvies today we will need a Peterbilt to get them home.” Was her reply

Everyone calls livestock haulers a different name. Some common ones are, Bull hauler, cow mobile, punch hole, bull rack, pot, and evidently as we saw around Christmas time slaughter truck

First lets make one thing clear, slaughter does not take place on these trucks, just in case there is someone gullible enough to think that. There is no refrigeration to cool the meat which would be essential for the slaughter process. Second, livestock have to walk off that trailer in order to be sold. If an animal can not walk off that trailer under its own power, by law, it can’t enter the food supply.

There will be that one fateful day in every critter’s life when it will take that ride to a packing facility. Most of the hauling these trucks do, does not end at a packer’s door.

Most of the hauling that is done in the cattle biz is transporting the cattle to different phases of production.
On my operation in particular, these trucks haul cattle to my place from an auction where I purchased the cattle. Some of the cattle will stay in the home pens and some go out to pasture for the growing phase. I will sometimes hire a big truck to haul them to pasture for me. It would take me ten or more trips with my pickup and a big truck can do it in two. This gets it done quickly and greatly reduces the stress on the cattle, since they don’t need to be sorted off into small bunches all day long while I haul them.

When I decide its time I will load these cattle onto a Pot again and have them shipped to an auction where they will be sold, and then loaded again to go to a feed lot.

Think about this. These cattle have been hauled several times to different locations and there has been nothing but growth and promotion of life.

Some people use these trucks just to haul cattle out to summer pasture and back home in the late fall.

The trailers have many different features, all designed for the comfort of the livestock, convenience for the driver, and safety.
Since its winter time I’ll start with the panels the drivers add to the side of the trailer. These panels are made of plastic and are corrugated like card board. They simply slide into holders on the side of the trailer that hold them in place. This keeps the air warm inside the trailer. Their body heat warms it up. Even when it well below freezing, you will have to take your coat off once the trailer is half loaded. They are that effective! The driver will stop and check on the stock from time to time, and if need be he can add more panels to make it warmer, or if he determines they are getting to hot he can remove some panels to regulate the temperature better, and make it more comfortable for the stock.

This load came
 in at sunrise on a cold morning.  The driver used panels to insulate the trailer and keep the cattle warm

This load came in at sunrise on a cold morning. The driver used panels to insulate the trailer and keep the cattle warm


The truck and trailer has an air ride suspension, which makes the ride smooth and comfortable. To help make the rid more comfortable the driver will avoid braking hard. Show the animals some respect and don’t cut off a livestock truck, okay.

Drivers will often times put down some wood shavings or saw dust before loading. This does two things. One it reduces the noise of the animal’s hooves on the aluminum floor, and second, it helps to absorb moisture. This prevents the floor from getting slick, so animals don’t fall down. A good driver can feel it when an animal lays down, and he will stop and get the animal back up, so other animals can’t step on it and cause injury.

There are ramps on these trailers to get the animals into the different compartments. The guys that haul most of my stock have ordered these ramps to be a little longer. These longer ramps are less steep, which is easier for the stock to get up and down. There is also funnel gates inside the trailer to guide the animals where to go.

Each compartment has a gate to close it off. Some of the bigger compartments have gates in them to make them smaller. This allows stock to be kept separate for ownership, or to keep bigger animals separate from smaller ones. This prevents the big ones from injuring the small ones. All these gates have a slam latch. What that is, is a latch that automatically locks when the gate is slammed against it. This is for safety, so an animal can’t hit the gate and cause it to come back and hit the driver. Think about it, if a 1400# steer hits that gate hard it can seriously injure the driver. I’ve even seen trailers where there is a release latch on the outside of the trailer so the driver never has to get in to open them.

Some trailers have roof hatches. They will open these, to help let the hot air escape out the top of the trailer. Again this is for the comfort of the animals. On chilly mornings I have seen steam coming out the top of those roof hatches. By allowing the steam to escape it won’t settle on the animals, which may cause them to get a chill later, if they get soaking wet and then cold.

One outfit that hauls most of my cattle, has sprinklers on their trailers. They use these mostly for pigs. On a really hot day they can hook a hose up to the sprinkler and cool down the inside of the trailer. If you know pigs you can bet they will find the sprinkler and get a drink while they wait. These guys have pulled over and hooked up a hose to cool down loads of stock. Sometimes they do it while waiting in line at a packing facility. Think of that. The pigs are waiting to be unloaded at a packer, and the driver is still doing all he can to make them comfortable, even in the last hour.

I recently saw a trailer that had an airline going inside the axels. Then it goes to the rim so the driver can pump air into the tires. This is convenient for the driver and is a safety feature for him, other drivers on the road and the livestock being transported.

I am now at 1200 words and I have not even written of the safety features that are in place for the drivers protection. When you stop and think of all the thought that has gone into the design of these trailers from a safety and convenience standpoint it seems silly to call them slaughter trucks.
As one final thought, I have seen the videos the animal rights groups have put out. Most people get distracted with the point of the video, and never really look at what they are watching. Most of those trucks are old models, and the people are often times wearing clothes form the sixties or seventies. Both the trucking industry and livestock industry have made huge strides since that time period

 
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Posted by on February 9, 2016 in Uncategorized

 

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Own Up to It

I came home one night, when I was in high school, and went straight to my room. My mom for some reason came to check on me.
“Have you been drinking?” she asked
“No” I mumbled
“Look at me” She commanded
“I just don’t feel good. I need to sleep”
“Look at me” She commanded again
I rolled over, and sat up. My eyes rolled back in my head and I got sick.
The next day my parents were nice and let me skip church and a family dinner, to sleep it off.
The next Monday at school, my peers gave me a hard time about how hung over I must have been. I denied it. I never admitted to my parents that I was drinking. Everybody knew I drank way too much and lived to survive one of the worst hangovers I’ve ever had.

I never owned up to it. Just took the consequences and moved on

Many cow/calf operators exhibit the same behavior. They suffer the consequences of their actions, move on and repeat them year after year. They never own up to the fact the problems they face year after year are a direct result of their management decisions.

I’m talking about winter calving specifically

Last year there was the story circulating around social media, about the producer who saved his calf from certain death by jumping into the hot tub with him, to save it from hypothermia. Many haled this as proof cattle producers will go to any lengths for the wellbeing of their stock.
If a producer really cares for his stock he will never put them into a potential situation that may cause them harm.

To clear up that statement, let me tell you this story. Last year after the hot tub story circulated, I was in a local salebarn. A couple was there and the husband half was bragging how hard they worked to save a calf from hypothermia. The wife didn’t share his enthusiasm. They had the calf in the bath tub, then in the kitchen for a while. I imagine her lack of enthusiasm was because she had livestock in her house, and it created a livestock kind of mess, and her heroic hubby didn’t help clean up. I went into the office where I know an ABS rep has some calendars stashed. I handed her one of those calendars. I showed her how each day on the calendar shows that if your cow is bred on that day it tells you approximately the day you may expect her to calve. I whispered to her “You can turn your bulls out later, and skip all this mess”. She looked at me like it had never dawned on her before.

During the conventional calving season, the cow/calf guys get up in the middle of the afternoon and leave the salebarn, to go home and check cows. You never know when you will have to intervene, in what should be a natural process, to save a calf. This costs the salebarn money, because they have to turn the heat on when all the hot air these guys expel leaves. What hot air? I can refute any talking point they may have to defend calving in winter. I used to calve in winter and made the change. I used to believe all the same things many of those who will defend it do.

I used to chew Copenhagen. I had a bad habit. One day I had to stop baling hay to run to town because I was out, and couldn’t stand it any longer. A few months later I decided it was stupid to let it have a hold on me like that and just quit. It was extremely hard. Many of you have let your cows do the same thing to you. Or it may be peer pressure from some fool. Either way if you refuse to examine a change you are trapped

I used to follow Ann Barnhardt’s blog back when it was mostly about cattle markets. She had a link to Pharo Cattle Co. I clicked every link on her page, so this was the first time I was exposed to Kit and his ideas. This was the first time I was exposed to the idea of calving in synch with nature. I had all the same ideas many of you winter calvers do and I thought someone really ought to clue this fool in. Funny thing is, ten years later after I changed to calving 1/3 of the year later, at grass time, Kit got smarter. To be clear Kit didn’t change, I did.

Now I’ve stated I can refute any talking point there is. There is one that never comes up. I stated earlier in this post that you are trapped. These talking points you so weakly defend are only in your head. You are a prisoner of your own mind. The hardest thing I had to overcome when changing my calving dates was to let go of the old ideas. Learning the new way was easy.

I can post another blog later if there is a demand for it to refute the common points to defending winter calving. I will give you this to ponder in the mean time. I posted last week that it was 20 below here. Several of my neighbors are calving. I drove by a couple of them. There were dead calves at each place. Imagine if you were wearing summer clothing and were soaking wet after coming out of a room that was 102 degrees. That is exactly what the baby calf experienced. It took only a matter of minutes for that little guy to freeze to the ground. It took a little longer for death to overtake him due to the cold. Like I said if you really cared you would not put your stock in that kind of position.

I know my neighbors worked their asses off during the night. They got cattle into their barns, and got the calves dry and started. They had to kick them out into a pen to make room for another cow in the barn. They bedded the new pairs well. Problem iscattle will bunch up and the calf they worked so hard to save may stepped on by a cow. If it steps on them in the wrong place the calf will be killed.

I know the heart break this causes. You and your stock do not need to go through this. I do know someone who is thrilled. I have not seen a coyote for over a week. I assume they must be eating well, and are sticking close to their new food source, those dead calves.

To wrap it up, I buy cattle year round of varying weights. I know there will always be a supply of cattle for me to bid on. What you may not realize, since you left the auction early to go home and cuddle your cows, is the discounts I get. When you get your check in the mail from the salebarn, you will notice that several of your good calves sold for considerably less. When your nice group of calves walked into the sale ring a guy like me will motion to the auctioneer to hold 3 for example. They sell the group then ask which three I want sorted off. I will point out the two with the froze off ears and the one with the froze off tail. I will then counter, that I will take the whole group and skip sorting if they just adjust the price on them. The discount on those three sure helps cheapen up the group. I know that you’re stunned and upset when you see the price on those three got adjusted. I know you think it’s just a dumb set of buyers who do not know quality. Maybe you’re right. I do not feel sorry for you that you worked so hard to keep them alive, only to turn around a year later and give me a discount. I am thankful.

 
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Posted by on January 26, 2016 in Uncategorized

 

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Light the Furnace

The weather has been very challenging here to say the least. 2015 was the fourth wettest on record. Between Thanksgiving and New Years we’ve had close to a foot of rain. That just is not good since it doesn’t dry out that time of year. When that is coupled with temps that are 50 degrees on Thursday and 20 below on Monday it can create a lot of stress on cattle, and the care giver.

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So what is a guy to do? The main focus is to take the stress off the cattle.

When it gets just terrible cold I typically will not rush out to feed. In 17 years of experience I have learned it’s not necessary. On a typical nice January day I may head out around 7 a.m. When it gets 0 degrees or colder I may wait until 8 or a bit later. The reason is I have noticed that the cattle don’t care to get up and move much at that time. Sunrise is usually the coldest part of the day, so it seems to be to their liking to wait a little while and let it start to warm up a bit.

I will start the tractors and let them warm up. While they are doing that I will walk all the pens. This walk will be over a mile in distance. It is not the most fun you will have when bundled up in all that heavy winter clothing. I will not move to fast so that I won’t begin to sweat. If that happens I will begin to get cold rather quickly.
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I will go in every pen, and chip ice off the water tanks if they need it. Water is the first limiting nutrient for cattle, making it the most important. They need water to help with digestion, which in turn helps keep their furnace running. Let me explain that. When a calf ruminates, he is acquiring nutrients from plant-based food by fermenting it in a specialized stomach prior to digestion, through microbial actions. The process typically requires the fermented cud to be regurgitated and chewed again. The process of rechewing the cud to further break down plant matter and stimulate digestion is called rumination. Rumination helps them generate body heat. This process can cause them to elevate their body temperature above normal by a few degrees. Couple that with their winter hair coats and that heavy leather hide and they handle the weather very well.
While I am in the pens I will make sure each and every single calf gets up. This is critical. Each critter may be feeling just fine. They may be ruminating, napping or just chilling. They will have a good spot picked out that is out of the wind and be very comfortable. I get them up because they may just stay there other wise, and not come eat when I feed them. When it gets that darn cold they will consume more feed. If one calf doesn’t get up and go eat his pen mates may eat it all leaving him none. This will cause him to get stressed. First off he is hungry and second he will not have the fuel to ruminate. These two stressors can cause him to not feel well, and this could be a problem. We do not want stressed cattle because they may get sick. Just the simple task of getting them up can prevent a lot of problems.

Breaking the ice off the drinkers

Breaking the ice off the drinkers

getting everyone up bofore feeding.  Note the bales in the background.  they are there for wind protection.  The dirt pile on the right is from scraping pens to make a nice place for them to lay down

getting everyone up bofore feeding. Note the bales in the background. they are there for wind protection. The dirt pile on the right is from scraping pens to make a nice place for them to lay down

Later on in the day I will take the cattle for a walk. Exercise is good for them. When the ground is frozen solid they will move slowly because it is hard on their feet. I will apply enough pressure to move them around but not so much that they feel like they need to get away from me quickly. A precaution to prevent them from injuring themselves on the rutted ground. Sometimes I just move them around their home pen a bit but usually I get them out in the alley ways. This gives them the chance to walk 3/8 of a mile one way and also they get to see cattle in the other pens. This will stimulate those cattle as well.

Out for a walk

Out for a walk

Upon returning to their home pen the cattle will usually eat a little or get a drink.
The three most important things a calf can do for optimum health is exercise, rest, and eat and drink. We just did all three of those things. Simple stuff. I have learned that if you want to manage for healthy cattle you must do healthy cattle things.

Keeping the pens maintained is important too. I keep a portion of the pen scraped to keep the mud and manure down to a minimum. When you get as much rain as we did in December this can be difficult to do, just because of all the slop, but the best attempt to do it must be made. As I said rest is critical for the cattle so we must provide a good area for them to lay down.

If the weather gets really bad for a period of time I will bed them. This means I will roll out a bale of some kind of cheap forage that is really not a good feed source. This bedding helps give them a barrier between wet ground, or just an insulation layer between them and frozen ground.

Yesterday morning when I did my normal routine it was 20 below. When I fed again in the evening it was in the teens. My cattle were running around their pens, bucking and sparring with one another (more exercise). This is a behavior of healthy, happy, stress free cattle! Mission accomplished. Thing is we start it all over again the next morning.

Fueling the furnace

Fueling the furnace

 
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Posted by on January 19, 2016 in Uncategorized

 

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529 Plan Updated

My 529 plan was originally posted in March of 2013. In my example here, my daughter would have the original 5 head paid off at age 3.  As an update of how well this can work, my daughter has 8 head fully paid for and a few hundred dollars left over.  The cattle market has been extremely generous this year, making our original investment of just over three thousand dollars in February in 2011 worth over ten thousand dollars today.  I seriously doubt anyone has a college/future investment plan for their kid that has done this well.

In all fairness and objectivity, I am fully aware that this bull market will not last, and the value of her cattle will drop. Even so, she has added three more head than projected, which will generate an income even in the bear market that will come someday.

I also mentioned that the cattle biz will help me teach her life lessons. My buttons pop off my shirt as I swell with pride over how much she knows already.  Most of that knowledge coming from her just being around and observing me.  Seeing as how I have seniors from K-state and UNL calling me now seeking advice on everything and anything to do with the cattle biz, I’d say my little girl is way ahead of the curve in more ways than one.

Her lunch is there on the left.  She is following along during the sale with barn card and pen in hand.  Still a bit young for a cell phone

Her lunch is there on the left. She is following along during the sale with barn card and pen in hand. Still a bit young for a cell phone

cat walks provide the best view.  From here she can see all the action in the yard.  This can provide entertainment for quite awhile

cat walks provide the best view. From here she can see all the action in the yard. This can provide entertainment for quite awhile

 

 

The original post:

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 September 26, 2014 in Uncategorized

 

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Where’s the Benefit? (bread & milk)

Last summer I was in a room of about 40 cattle producers from all over the US, with all kinds of different back grounds and strengths.  I don’t think I’ve ever been part of a more diverse group.  One question that was presented to us was “How does your ranch benefit others?”

Right away the first answer was BEEF.  I will say this, that person went home realizing they are a cattle producer not a beef producer.  There were some ramblings about conserving the environment, and taxes.  Then it was just quiet.

This was something I had thought about before, so I spoke up.  I sell and buy cattle all the time.  I need truckers to move them critters down the road.  That driver uses the money he earned from me to pay his taxes, fuel that he bought somewhere, food from a food service establishment that provides jobs to people, tires and other maintenance, insurance, and so on.  What is left over he keeps the lights on in his house and bread and milk on the table for his family.

I buy feed from family and neighbors.  They must make machinery payments, farm payments, maintenance on the equipment, pay for fertilizer, fuel, seed, and so on.  One guy I buy feed from has three kids, all under the age of three.  He forks out a lot of cash for bread and milk.

Don’t forget the mom and pops feed store I do business with.  They got to pay their suppliers, and employees, along with utilities, and equipment, insurance, taxes, and so on.

I buy cattle in sale barns, who obviously have employees, and other expenses.

You’re getting the idea.   A little bit of money gets spread pretty thin and everyone is trying to pay for bread and milk.

A sale barn needs buyers there to establish a market through open price discovery.  As a cattle buyer I have aided in that process many, many times.

One day I was buying cattle and need to recycle my coffee.  I stood at the top the steps for a moment to see what was behind the gate coming into the ring.  In came a small group of three or four heavy four weight heifers, black.  They would fit a deal I had going, and I needed some weight and some average makers. (average makers are the cattle that get bought cheap, to add weight to a load and lower the average dollars/hundred).  I stood there and watched until the bidding stalled, then jumped in.  I hit them three times, and owned them, improving my average.

Now that scene is no big deal to me.  I do that all the time.  Here is why I remember that day so well.  After I left the head, I went to the office and got a recap (recap is a printout telling me how many cattle I have on each of my numbers, what the average weight and average price per hundred is.  Also tells me total dollars spent and total pounds on each number).  This guy comes up to me and thanked me for buying those heifers I just told you about.  I kinda tried to blow it off, and said “you’re welcome”.  He said “No. You don’t get it.  Every little bit helps.”  I  then stepped outside to call a guy I had just finished putting a load together for.  I watched the guy who just thanked me get into a car with a young woman who was feeding a baby.  He showed her the check and gave her a kiss on the cheek before starting the car and leaving.  I bumped them calves about $25/head.  He got about an extra $100 because me and another buyer pushed them.  Having a little one of my own, I know $100 is barely a dent when it comes to bread, milk and diapers.

I’d like to share another example with you all.  I’m totally bragging here, it’s a good one and I had fun doing it.

The last week before all the kids went back to school last fall, one young teenager was sitting in a local sale barn trying to buy a few calves.  One group of calves came in the ring.  This kid started bidding on them.  They were way too low to just sit there so I hit them a few times.  I pushed them to where they were a good buy and a somewhat decent sale price.  Then I pointed at the kid as a sign for the auctioneer to knock them off on him.

Now to set this up a little better there is always some old asshole that never leaves well enough alone.  Back when I was younger and fiercely needed a few breaks, (good buys) this old grumpy fucker would always jump in and run me.  Well he did the same thing to this kid.  He ran the youngster right up to about what the market was bringing for those calves.

The poor kid shook his head “no”  He was out.  Now, I have NEVER jumped back in on bidding on some cattle after I decided I was out.  I had the money to run this old man, and my anger at him for doing that to me when I was younger came out.  I ran him.   I hung those high dollar calves on him.

This exact same scenario was repeated on the next group of calves that came in the ring.  Everyone in the place got the hint.  We were all going to let this kid have a few calves at a good price, or I was going to fuck with you.  The auctioneer is also the owner at that barn and boy was he having fun with the situation.  That kid got all the calves he wanted (about eight) and he swelled up with so much pride I thought the buttons were gonna pop off his shirt!  Next week he was back in school and I was back at the same barn buying cattle.  I made a win/win situation

Gang, I could list tons more examples of how our operations benefit others.  We often times don’t think they do because we rarely take the time to reflect on it.  This is just everyday stuff to most of us, thing is, it matters to somebody.

 
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Posted by on June 3, 2014 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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