Last week while I was finishing a marketing school my promotional manager (wife) set up another one in Deadwood SD on September 26-27. I will also be speaking all three days at Husker Harvest Days in Grand Island Nebraska, September 13-15.
One of the things that seems to be at the forefront of most people’s minds is money. It simply takes more of it to purchase the things we want or need right now. At Husker Harvest Days I am going to cover some simple fundamentals of Sell/Buy marketing and how to apply them to the current market situation to generate positive cash flow. I am going to show you all the money.
There are many things that make my marketing schools unique and stand out from the others. One is that I take time to talk about money. No one has ever done this before. I had a wonderful mentor who started a company from scratch that eventually did business all over the globe before he passed. This man owed more money than he was making when he was in his 20’s and had a net-worth of over %20 million when he passed. He had some serious paradigm changes along the way and one thing he learned and taught was how money really works.
There are some people who believe that money can be under-valued, and if or when it is you should just hang on to it. Now that sounds good on the surface, after all that’s what sell/buy marketing is all about sell the over-valued and replace with the under-valued. Here’s the thing, money has no value unless it is being circulated. Money only has value based on our perception of it.
Understanding the true nature of money
Money is a fungible proxy we use as a medium of exchange for goods and services. The system works because we have been mentally conditioned to use it to value things that are not alike. We use money to place a value on cattle and we use it to place a value on a boat. I usually use boots as an example when talking about the value of money. We find a pair we like and look at the price tag. We then decide the boots are not worth paying that price for so we put them back on the shelf and look for a different pair. Those boots don’t have enough value to us to justify spend that much on them.
I will also tell a story of a time I bought a bunch of four weight heifers because I didn’t think my money was worth what they were selling for. Money should only be spent to buy things that have more value to us, otherwise why spend it?
So how do some people think their money is under-valued? They perceive it as under-valued because they sold an under-valued animal. This is easy to fix by paying better attention to what they have in inventory and the market value of those animals and sell them before they become under-valued.
Things are seldom ever equal, that is why Sell/Buy works. Fats aren’t equal in value to feeder steers, and feeder steers are not equal to each other when we break them out by weight and type. Same thing with breeding stock.
Let’s test this money under-valued theory. Many other things have gone up more in price than cattle have. If we market cattle to earn money, and cattle haven’t gone up in price like other things then that implies our money is under-valued. So how do we justify spending $5 on diesel to go to the grocery store and buy food, when food and diesel have gone up more than cattle have? We spend the money on this grocery shopping trip because the use value is higher. We spend this “under-valued” money on food because it is much better than the alternative. We spend the $5 on diesel to get to the store and back because we are not going to carry our groceries or push the cart 15 miles home in 100-degree heat. The use value from $5 fuel is greater.
Here is something valuable I’ve learned about money. Money is the effect and will refuse to replace you as the cause. If you want to make money you need to work on yourself. If the paradigm of money being under-valued is in place we have left the door wide open to do sloppy trading and lose money because it is justified in our minds. With this paradigm in place it will be difficult to keep money and cattle in inventory over time.
Here’s another test to crush the idea of money being under-valued. In the Sell/Buy philosophy we state that today is the best day to buy in, because at every sale there are under-valued cattle. You don’t believe this if you think your money is under-valued and you should hang on to it.
Report from the markets
Looking at the markets this week fly weight steers are good property to be buying in. Their Value of Gain (VOG) is much higher than anything else right now. And once again this week there is a price cliff around the eight weight cattle.
There were several auctions I looked at where 9 and 10 weight cattle brought equal to or less dollars per head than eight weights. Even though fats got a little more shaved off their price, the heavy feeder heifers are still a profitable buy back against them.
This week feeder bulls were 20 back and unweaned cattle were up to 15 back.
Heading to Husker Harvest Days? You can catch Doug Ferguson live each day at 12:15 has he offers ways to put more money in your wallet with sell/buy marketing. And it’s your chance to talk with him each day. Husker Harvest Days runs Sept. 13 – 15 near Grand Island, Neb. Make plans to attend.
The opinions of Doug Ferguson are not necessarily those of beefmagazine.com or Farm Progress.