Get past cattle market idiomsGet past cattle market idioms
The industry is full of sayings that do little to advance a successful marketing program.
April 28, 2023
When life serves me a softball, I am going to swing at it. Last week I mentioned the two voices we hear in our head. This week another buyer gave me a perfect example of how those voices mess with us.
A few weeks ago, he bought a small group of calves and overpaid for them. Right after the auction he was needing approval from everyone there that he did okay buying them. The next week he added to them, but he wasn’t bidding as aggressively. The following week he walks in and immediately begins telling us he won’t be able to buy any cattle that day.
There is one type of animal he is zeroed in on and he has blown all of us out when bidding on these. He volunteered a whole list of reasons he wouldn’t be able to buy any cattle, most of which were the fault of us other buyers. As the sale progressed it was us other buyers that were encouraging him to jump in and bid on some groups that fit his criteria, and he just sat still like he didn’t hear anyone.
When he needed validation from everyone after buying the first bunch it was clear the negative voice had already gotten to him. He most likely already knew he paid too much, but the voice talked him into it. We have all done that, then once the buyer’s remorse kicks in we try to figure out ways to make it work and reassure ourselves things will be okay. This process usually involves cutting a corner to save some costs. The problem there is cutting the wrong corner, or cutting too deeply can cause us more problems down the road.
If you want to become great at something you must choose to focus on mastering it. Simply understanding concepts won’t create mastery. Being able to recite definitions, or memorizing (memory is one of the six faculties of our minds) idioms won’t be able to create it either. Mastery is more than just being able to copy a movement over and over. It is understanding why the movement works and finding new ways to apply it in other areas of your life.
I want to dig deeper into reciting idioms because the cattle biz is full of them. First here are some examples “buy low, sell high”, “Sell them before the last steer trips in Cheyenne”. These have nothing to do with the fundaments of sound marketing. All these do is trick us into thinking we know more than we really do and misdirect our focus.
Negative thoughts will always try to creep into our heads. Whether we generate them ourselves or get them from people around us. As you can tell I have no use for idioms. There is a much better way to have self-conversations that keep us focused on hitting our target to generate positive cash flow and prosperity - affirmations.
I share several in my marketing schools that have served me well. They have gotten me through some tough spots and helped me prosper, even in times when it looked like that was not going to happen. Here are some examples “keep the needle pointed in the right direction” (pointed towards positive cash flow) “Get the five best buys.”
Understanding idioms and affirmations
There is a huge difference between the idioms and the affirmations. As you can see the idioms rely on forecasting, while the affirmations invoke the will, which is one of the six mental faculties in your mind and is what enables us to focus. Bingo! That is how to win the mental game, focus on what you want.
This directs our attention back to our numbers. Some will try to tell you that this is just a numbers game to be successful. Numbers do play a huge role, but it is our market literacy and our skill that will enable us to string together good trades over a period of decades in business that will determine our success.
Remember above I wrote about talking ourselves into a deal then cutting corners somewhere else down the line to make it work. This is manipulating the numbers. I could go down a long rabbit trail about this topic. Pay attention to and know your numbers. Do not deviate from them. I have heard marketing gurus openly brag about manipulating numbers on podcasts and how they have the slides to back it up. Pay attention to what is said and what you are really looking at folks. This invokes another of the six faculties which is reason.
If we cancel out the idioms and use affirmations to direct our focus we get to the math. If we use our own real numbers and do honest calculations with our profit target figured in, and do that before the auction starts, we will not need anyone to tell us if we are doing a good job. We will also not be second guessing ourselves and talking ourselves out of jumping on some great buys. We will have clarity in the marketplace. I hope this sheds some light on what I wrote last week, what’s between our ears will affect our profitability.
As I sit down and write these columns every Friday morning, I often surprise myself where the topic ends up flowing. I have already mentioned three of the six mental faculties – memory, the will, reason - so I may as well cover the other three.
Yesterday morning I was telling my wife that I was going to look at an investment opportunity and invited her to meet me there if she had time. At breakfast she was telling me all the reasons she didn’t want us to do this and acted like it wouldn’t work. Pretty clear what voice in her mind she was interacting with.
After we looked at the investment yesterday afternoon her tone changed, and so did mine. I was ready to walk away and keep looking. She saw potential in what we were looking at. She invoked her imagination, one of the six faculties, and generated some solid realistic ideas that will work. This changed her perception, which is another one of the six. What we need now is some realistic hard numbers, which our adviser didn’t have, to make a decision.
I share this to illustrate how these faculties can guide us well if used properly, or mislead us if they are manipulated. The last of the six is intuition, which is trusting your gut.
Last fall we received an earful of the great wave of prosperity to come to the cow/calf business. Some people are still waiting, and it’s been almost half a year. Let’s examine how their predictions are holding up so far.
The young first- and second-calvers are over-valued, they got that much right in their predictions. They also said to sell off your five-year-old cows to deflect depreciation. Looking at market reports and the sales I was at this week there is $750 depreciation from the first calf to becoming a five-year-old right now. Most sales had only slight depreciation from five-year-olds to short solids. I say most because two sales south of I-70 sold eight-year-olds for more dollars than five-year-olds of the same type and condition. So, as we can see the prediction didn’t age well. I hope this reinforces that predictions are just gambling.
They also suggested we should buy all these heifers and breed them to resell for lots of money. The jury is still out on that one. Thing is with legit sell/buy marketing we don’t believe in forecasting; we just deal with today. Today being this week. The only thing saying to buy these open heifers is the price relationship between them and first-calf pairs. It is a margin of a few hundred dollars per head if looking at the average prices. One marketing guru likes to compare the 5- or 15-head of market toppers for comparisons. In that case the value capture is closer to $900.
Using hard honest numbers, to analyze the relationships it is easy to see there is not a market signal of any kind to swap out a mature cow and replace her with a heifer. The math says not to do it right now.
If we examine real numbers and deal with today it is clear to see they missed their prediction all together. The new wave of prosperity found its way to the feed yard! These open heifers they suggested buying and breeding are capturing the same several hundred dollars profit as replacement buys to fats.
The price relationships will have to change greatly for these gamblers come fall/winter because they killed their turnover for the year. The feed yard will likely be starting their third turn by the time the other guys have their over-valued heifer pair.
The opinions of Doug Ferguson are not necessarily those of beefmagazine.com or Farm Progress.
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