Why do you do what you do? Do you know? Could you change? Answering those questions create a healthy evaluation of your business

Doug Ferguson

September 24, 2021

4 Min Read
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Watch each Friday for Doug Ferguson's Market Intel blog on Beef Producer and BEEF magazine.vectorbomb-ThinkstockPhotos

One thing you can count on this time of year is hearing stories about kids, teachers, and coaches. This to me seems normal since the kids are learning and growing up. There will be some bumps and some friction. What is alarming to me is now it seems the issues are created by the teachers and coaches acting like kids themselves. How are kids supposed to grow up and assume adult leadership roles, if adult behavior is not modeled for them?

The same goes for ag businesses. If we complain, cast blame, and throw good money at trying to solve problems, instead of looking for cheaper long lasting solutions, we are just repelling our kids from this business. Then we turn around and ask or seek advice on how to retain our kids.

We need to change our thinking, the behaviors we model, and the words we use.

Look at that line about retaining our kids. To me the difference between retain and restrain is the use of handcuffs. Neither of these words are positive. We need to change our thinking and our approach. Kids want to be attracted; we all do.

Strong paradigms create challenges

That sounds easy right? If it is that easy why don’t we do it? Our paradigms and culture (culture being a group paradigm) are just that strong. They control our behavior without us even realizing it. Here’s an example: I ask corn farmers once in a while why they use the farming methods they do to grow corn. They look at me like I have two heads and tell me that’s just how corn is raised. There is no attempt to answer my question, just an offended look and deflective response. Truth is they don’t know why.

They don’t know why they do what they do. A paradigm can be so strong that we are prisoners of our own minds and we don’t even realize it. How do we escape from a prison if we don’t even realize we are in one?

When I was at Husker Harvest Days there were two age groups of people that showed the most interest in talking to me. They were sixty and older, and twenties/early thirties. The sixty and older bunch realize they need to change and were looking for ideas.

The young crowd really got my attention. I talked to young people from five different states, so they didn’t know each other, and over the three days they all told me the same thing. They see that what other producers are doing isn’t working. So it’s very simple to them, “Just do the opposite of what the status quo is doing”. They also all had the same problem they are trying to find a solution for “I don’t always know what the opposite is”.

One thing I am certain of is the young people will be just fine. They have hope and faith to drive and motivate them. I am also certain the older bunch will hit their mark as well. The playwright George Bernard Shaw once said: "The people who get on in this life are those who look for the situation and circumstances they want. And if they can’t find them, they create them." That’s exactly what these people are doing. And guess who’s going to create the situation and circumstances to attract the next generation.

A look at the markets

The heavy feeder heifers continued to be a profitable buy back against fats. As I look at the heifer spectrum the Value of Gain is attractive, meaning it’s higher than the Cost of Gain, through part of the spectrum. Just where it falls below COG varies from one auction to another, and this happens between six and eight weights, and is region specific.

I am assuming there are some new readers this week and I probably need to explain a little better. If you are in a region where the six weight heifers are the hot ticket and you have some at home, you may want to consider selling them. When the VOG, falls below the COG it simply means it is not paying us to put any more weight on them. When we put weight on for more than what we are getting paid for it, we are in a way subsidizing the buyer. This week at a lot of auctions a nine weight heifer only brought $25/head more than an eight weight. It cost more than that to put the weight on, so in this case it’s a good buy, since a buyer can buy weight cheaper than he can feed it on.

If you are in a region where the VOG is still attractive up to the eight weight heifer, then maybe you consider putting more weight on. Thing is we must know, not guess, what our cattle weigh, and what our COG is in order to make these decisions.

The steer spectrum is clear, buyers have set their sights on five weights and eight weights.

This week feeder bulls were 10-25 back. Unweaned cattle were 5-15 back. The size of the unweaned discount reflected the size of the calves (the bigger the bawler the bigger the discount), and if they had preconditioning shots or not. Southern markets were undervalued to plains markets.

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