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Profits? Justin Sullivan/Getty Images

Thoughts on hiring a soldier and equal distribution of money

There’s a wide philosophical gulf in the beef business. Can we overcome it?

“All gave some; Some gave all.”

That quote flashed through my mind as I did some late-night pondering over messages on my land line’s voicemail. I returned from a trip to North Dakota, stumbling through the door somewhere around midnight, and couldn’t resist the flashing red light on the phone.

The trip was largely personal, but the line between personal time and BEEF time is blurry at best and often indistinguishable, which can bring either the best or the worst of both worlds. In this case it was both—a chance to make some new friends at Napoleon Livestock in Napoleon, N.D., and a trip to a walk-in clinic in Bismarck to verify a fractured rib. Spending time with good people in the beef business makes trips like this worthwhile; broken bones makes them interesting.

In between the telemarketers urging me to “Select 1 now to receive your urgent warranty information” were phone calls regarding the November issue of the magazine. This is the most phone calls—three—that I recall getting after the magazine hits your mailboxes.

The first was from a lady in Kansas, who called to thank us for the cover photo on the November issue of a returning soldier getting an enthusiastic hug from his girlfriend. Pictures such as this are not just iconic, but they tell the story of a part of the American experience that we cannot, must not, ever forget.

The picture illustrates the magazine’s feature story about how farmers and ranchers can find the dependable, solid, capable help they need. If you’re looking for an employee who can make decisions and carry them through, look no further than a returning veteran.

Differing philosophies

The other two callers showed the stark differences in philosophy that abounds in the beef business. The first caller complimented my editorial, which points out that markets aren’t fair and never will be. “You hit the nail on the head,” he said.

The second caller indicated that not only did I completely miss the nail, I whacked my thumb instead.

READ: Packer gross margins vs. cow-calf profitability

His arguments, calmly and articulately made, were the same points that the populist arm of the beef business has been making for years. “Everybody wants to beat up on the little guy,” he said, pointing a finger mainly at the packers. He also related a story about how he asked a market analyst how he would react if his boss told him he had to take a cut in pay and benefits.

But the comment that most caught my attention was this: “Why not let the feeder make $100, the rancher make $100 and the packer make $100 instead of the packer keeping it all?”

First, let’s look at the pay cut comment. Agricultural production, regardless of commodity, has never been an occupation with a guaranteed paycheck. And I strongly suspect that most of you don’t want to become contract growers. So, in my opinion, that’s an apples-to-oranges comparison, to use the old cliché.

Now to the equal distribution of wealth. It’s been a long time since I’ve had a class on economic theory, but I suspect that’s part of Karl Marx’ thoughts on economics. It was Marx who famously said, “From each according to his abilities, to each according to his needs.”

On the surface, the idea of equal distribution of wealth has some appeal. It sounds fair and equitable. But history has shown that, in practice, it does the opposite of what Marx intended, which is a classless society. I suspect beef producers who prefer capitalism and the entrepreneurial spirit would find that idea an anathema.

Read: Cattle imports, beef production and COOL

This is not the best analogy, but it serves to point out the differences in philosophies. One of my wife’s relatives was, for 20 years or more, a perennial qualifier for the National Finals Rodeo. He was invited to an event some years back where every contestant was guaranteed a paycheck.

Instead, they all threw the money into a figurative hat and competed for winner take all. “That’s what rodeo has always been about,” he said. They wanted the opportunity, not the guarantee.

That’s on the extreme end of the spectrum, but it’s cause to ask ourselves this question: What is the beef business about, economically speaking? Making a profit is just one reason for being in the beef business, so your answer will be different from mine or others.  

Related: Keeping the operation whole: Risk management options

I relate all this simply to point out the obvious, which is that there is a wide gulf in philosophies in the beef business. It would be in the industry’s best interest to narrow that chasm a bit, but I don’t think that will happen, at least not anytime soon.

So where does that leave us? That’s a question for which there are no easy answers.

But I do know this: If left to function correctly, the cattle markets will be the final arbitrator. It is within that framework that beef producers have always operated, and it is within that framework that beef producers must maneuver to position themselves for success.  

 

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