There are math lessons to be learned, and shared, from the cattle business

Doug Ferguson

May 7, 2021

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

You have probably noticed that this week was “Teacher Appreciation Week.” I hated school growing up as a kid, and as a reflection of that attitude I didn’t care much for most of my teachers. Looking back with a 40-year old brain I had some good ones, and I am better off because of them.

I sat on the student side of the desk most of my life, and judging from that side teaching looks easy. After teaching my first marketing school last year I can tell you it is hard. I have a much higher respect for teachers and what they do. And to think that they do it every day, all day leaves me shaking my head.

Since I am a parent of a 10 year old girl the topic of education is important to me. I’m going to go down a rabbit trail this week and I promise I’ll bring it back full circle to marketing.

There are things about being a schoolteacher I think most fail to realize. I know I did until a friend who used to be a teacher pointed the obvious out to me. A teacher’s first responsibility is to make sure the classroom is safe. The second job is to set and maintain order and discipline. In today’s world that can be a tough task. Their third job is to teach.

Here’s something that really gets me upset. When a student is not doing well in school the parents often blame the school and the teacher. The bottom line is as parents we are in charge of our child’s education. The teachers and school are there to help with this. Parents must take that responsibility. I have heard stories this year where teachers refuse to communicate with parents. This is unacceptable and is a wrong that the parents must correct.

Be involved and engaged

Taking responsibility for their education means being involved. We must know what they are studying/learning and how it is being taught. Last year my daughter’s grades started to slip in math, and she didn’t care much for the subject. I immediately knew something was wrong because she always got good grades in math and enjoyed it. I easily figured out what the problem was.  She was being taught to use bubble gaps.  On problems with larger numbers there could be over 50 of these gaps. That greatly raises the probability for error. I told her to forget the bubble gaps and do the math the way I taught her, the right way, and her grades went back up.

Here’s another example. My friend’s son got to the point he didn’t think much of his schooling was useful in the real world. My friend asked his kid what he wanted to do when he grew up. The young man wants to be a rancher. My friend sat down with him and showed him how math is used to tally up expenses, and to calculate weight gained. He then showed him that math is used to calculate cost of gain, value of gain, break profit cost of gain, and return on the gain. To run a profitable business, the kid was going to need to know these things. His son’s grades improved right away.

That little bit of effort is all it takes to take charge of their education. I really think the reason most kids struggle with math is the boring brain-dead manner, in which it’s taught. If we show them it has practical application to real life and that it is fundamental, meaning it doesn’t change, they will crush the subject.

We will take time to teach them how to make hay, drive cattle, weld, and other things on the farm. Why not take time and sit down with them and show them how we use math in the business? We should make sure they can read well. If they can read well, they can pick up a book and teach themselves.

The power of life-long learning

Every week on this blog I try to share ideas to help people get better, and sometimes I share a link. I am going to share another link this week that can certainly help some of you. First, I want to share something else.

Before we can teach, we must be a good student and a life-long learner. I learned sell/buy marketing from Ann Barnhardt, and Ann learned it from Bud Williams. Ann and I were both good students, that’s how we ended up in the teaching role. How can you teach your kids if you are not learning or studying yourself? Are you following up on things I share on this blog? Are you studying better grazing, or business management? If not, I have a tough question, what are your actions teaching your kids?

When Ann taught her schools, she made a point “if you’re going to be in it, be in it to be excellent.”  That applies to everything. Marketing, business, stockmanship, and your most important job, parenting.

Ann was an excellent teacher; she had a gift. She stepped away from the cattle biz several years ago to pursue her real passion in life. I reached out to her this week. Our dialogue was a little different this time, she was giving me thoughts and advice on how to be a better teacher. After attending her marketing school in 2005 my life took a different trajectory, and I’m sure that trajectory will change again after this week. That is the mark of a great teacher.

Now to close the loop. I said I’d provide a link that will help some of you. Before Ann decided to take her life in another direction, she made an instructional DVD set on cattle marketing. She confirmed that there are still some available. For those of you who refuse to travel to a live school check this out:

I have a copy. She had this professionally recorded in a studio, so the audio and video are good quality, and the content is solid.

Market update

This week the VOG in the feeder market tends to fall off around 600 pounds. I had a few people call this week wondering if they should try to do something with their five- and six-weight cattle. Prices for these cattle tended to vary (by as much as $20 a hundred in Nebraska). My advice was to try and do a country sale, so they were guaranteed a price, rather than being surprised at auction.

Checking market reports from across the country something else stands out this week. At many of the sales, a heavier weight of steers sold for less dollars per head than a lighter one. And just to be clear I am comparing weights of 100 pounds or greater. As a seller we should be paying attention so we don’t give weight and feed away. As a buyer we need to be paying attention because it provides an opportunity to do a leapfrog trade, where the market pays us to take weight home.

This week unweaned cattle were 20-30 back (In Nebraska) and feeder bulls were 12-25 back.

I got the Fun With Math idea from Ann, it’s a thing she did years ago. In appreciation of my teacher:

Sell fats at $1.18 and buy back 1,010 pounds steers at $1.08 laid in from southwest MO. This gives a ROG of $1.44. I was curious so I bumped the price of corn up to $7.50 and ended up with a BPCOG of $1.44. This trade allows us to hit our profit target even with $7.50 corn.

Here’s one more from Southwest Missouri. Sell a 475 pound steer at $1.7850. Buy back a 460 pound bull at $1.62. This trade put a Ben Franklin in our pocket on a 15pound difference. We really don’t need a calculator for this. With a ROG of $6.80 and a COG much below that we are making money hand over fist.

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