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Things Kids Say

Over Spring and Easter break there were a bunch of little kids in the sale barns I was at. We all know kids will say the darndest things. Today I’m going to share a few I heard

One Afternoon a small class of what I am guessing to be first graders came into the cattle auction where I was buying cattle. They sat right in front of me. They were relatively quiet, and well behaved. I could still hear the auctioneer. One girl in particular was very observant. She starting asking questions about some of the cattle going through the auction ring. I was very impressed with her observations. One calf came through the ring and it was obvious something was wrong with it. She asked about it. I told her the calf could not see too well. She responded “It’s blind?” I told her “No. It can see, just not to good” Her response “Oh. He just can’t see his problems to good. That will keep him happy, because he has lots of problems”

Another day a little boy around age four or five was playing in the phone booth at a cattle sale. He had the receiver off the hook and was swinging it around by the cord. He finally paused and asked his dad what the thing was. When his dad told him it was a phone the boy looked at the receiver for a bit then tried to “swipe” it with his finger like you would with an iphone.

I was cutting some little feeder bulls I had bought. After I cut the nuts out I throw them on the ground in a pile. My little girl, age five, was there and looked at the pile and asked what they were. I told her they were nuts. After I cut another one she asked “What are nuts?” I told her “They are the boy parts” She watched me cut another one and asked “You cut them out?” I nodded. She asked “Will that make them smarter?”

 
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Posted by on April 11, 2016 in Uncategorized

 

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Daddy’s Day of All Stars

When my daughter was four she went through a phase where she was afraid of bugs. It didn’t matter what we said to her about bugs, she was terrified. At the time we also had what we called “Daddy’s Day”. On this day she’d spend most of the day with me, and all of it if the weather would allow. (feeding cattle in the rain or freezing cold is a bit much to ask a little one)

On one of those daddy days I had it with her freaking out about bugs. I came up with a plan on the spot. I asked her if she wanted to go for a four wheeler ride, which I knew she’d be more than eager to. I always have a spade on my wheeler, so I grabbed a fishing pole and we were off. I took her to an outdoor class room, a pasture I rent.

When we got there I got off the wheeler and tried to show her all the different bugs, and tried my best to explain to her how not all of them are bad. I didn’t seem to be getting anywhere with her. If I caught one and tried to show it to her close up she’d freak.

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Then we found an All Star team. Dung beetles. I didn’t know much about the other bugs I found, but I know these guys. I simply explained to her the beneficial role these guys play in supporting a healthy pasture, pasture feeds calvies, calvies feed dung beetles, the beetles feed the soil, and soil feeds the grass. We were trying to teach her to recognize patterns, and explaining that cycle like I did helped make sense for her. There also was the element that whatever is good for the calvies is good as a whole.

The beetles we found were rollers. These guys can easily entertain a little one. She became very excited, because she thought they were playing ball, just like she does.

dungbeetle

I then took out my spade and turned over some soil. Boom! There was the other All Star team. Earth worms. I again gave her a simple over view of the benefits of earth worms. She seemed to really be catching on.

After finding a way to get through to her and help her realize not all bugs are bad, we took a few worms and headed over to a farm pond that is always good for bull heads, which is just perfect for a kid her age, since they usually bite fast.

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I feel it is important to include this last bit. There was a lot going on in the first 400 words, that I’m afraid most may have missed, since the focus was on bugs. First, by setting up a “Daddy’s Day” we have provided a structure where our little girl really has a strong presence of me in her life. She gets exposed to many life lessons that farm life, and commerce provide. As you can tell from this story, I slow down a bit on daddy’s day. I take the time to use our large class room to teach her things, and we also use it for play time. Like four wheeler rides and fishing. The surprising thing is how much I have learned. It is difficult some times to explain things about agriculture to a four year old. But when I hear her explain what she learned to someone else I get to relearn about what I do through her eyes. This has opened my eyes to more things, helping me to learn more, by giving me a fresh perspective. It has also helped me communicate better.

 
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Posted by on March 2, 2016 in Uncategorized

 

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AgProud Q1

Some time ago Ryan Goodman made a list of blog topics. I thought this was one heck of a list, and thought, if I started blogging again that I’d take a swing at it. My finger tips are back on the keyboard, so here goes. (Not all 88 of these are applicable to me, but most are)

Question 1) What is your role in agriculture?

The simple, broad answer is “the growth and promotion of life”. That is what anyone in production agriculture does.

To be more specific, I own and operate a backgrounding/stocker operation, as my main enterprise. What this means is I purchase young calves, most of which are not weaned, and I take them through the growth phase of their life. The calves are then sold to a feedlot.

While the calves are here the main focus is on their health and well being. I will give them two rounds of vaccinations, make sure they are free of parasites, and address any other issues they may need. Other issues may be dehorning, castrating, or just making sure they get the vitamins and minerals they may have been lacking prior to coming here. It may be a surprise to many people just how many calves are lacking in something. For example, the hair around a calf’s ears can tell me if it’s copper deficient or not. It’s my job to identify this and get them what they need. Getting their nutrient requirements in balance gives their immune system what it needs.

Receiving a load of long haul bawling calves.  I immediately begin taking the stress off them

Receiving a load of long haul bawling calves. I immediately begin taking the stress off them

Part of the regular routine is to make sure all the animals are drinking, eating, resting, and exercising like they should. If the cattle do those things the likely hood of a problem is slim, and they will perform better.

Some of the calves I buy will stay in a feedlot pen. Others will go out to grass during the spring to fall months. I use a rotational grazing system, using temporary electric fence and a portable water system. Without getting specific here, this system plays a vital role in the health of the environment. When properly managed grazing is in place it compliments the natural cycles, such as the water cycle and mineral cycle. I have only been using this system for a few years, and have already seen species of plants come back without being reseeded, and I’ve seen an increase in forage and wildlife, such as deer and game birds, in these pastures.

One got on the wrong side of the wire

One got on the wrong side of the wire

An important role I have in agriculture is to get my little girl involved. She just turned 5, and like any other kid her age, she wants to learn. I feel it is essential to pass along knowledge, skills, and life lessons to her, as she is ready for them. Since agriculture deals with life cycles, we have a great hands on classroom for her.

A December pasture walk with my little girl.

A December pasture walk with my little girl.

Another role that I oddly find myself in, is a teacher. It seems like every year more people reach out to me for advice on something, most of whom I’ve never met. I’ve been contacted by custom grazers, feedlot managers, cow/calf producers, college students, and even extension researchers. And if I can’t help them with their questions I know who can. I was even asked to contribute to Chip Hines’ latest book “Cow Country Essays”

A seminar I was asked to speak at

A seminar I was asked to speak at

There are other roles that I play in production agriculture. My dad is a crop farmer so I help him, when he needs it and I am free. I have a haying enterprise, and sometimes do some order buying for other cattle feeders, and stocker operators.

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Due to a recent event that happened here I am going to do some agvocating, so there’s that role.

A tour I hosted for the local Chamber of Commerce leadership program

A tour I hosted for the local Chamber of Commerce leadership program

 
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Posted by on February 5, 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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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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