Cattle have superpowers

The feeder markets continue to be hot, but price relationships are what matters.

Doug Ferguson

August 11, 2023

7 Min Read
There are strong signals to make sure calves are weaned before the auction barn. VECTORBOMB/THINKSTOCK

Last week’s blog was about including people as the base of the inventory triangle. This week I was in Oklahoma City because of people. My daughter was supposed to play in a basketball tournament there and that is the reason we chose OKC as the location for a sell/buy marketing school.

Almost everything we do revolves around people. Why do we raise cattle to begin with? My answer to that question is because they improve the lives of people. Not only do they provide beef, but there is also all the other byproducts that we get from them that improve our lives. When grazing is well managed, cattle can improve the local ecosystem and sequester carbon.

Capturing value

To me cattle have two superpowers. They can upcycle and gain weight from feedstuffs we can’t utilize ourselves and we can capture value from that weight gain. They also replicate themselves and give us a calf to sell. These two superpowers are all that is required sometimes for some people to make money.

In order to capture any value, we need other people to trade with. As I pointed out last week, the only reason the inventory pyramid exists is because of people. I learned sell/buy marketing from Ann Barnhardt, and now I teach it to other people. One day someone will replace me and teach sell/buy marketing to other people. Since there is no limit to better, I also believe this person will figure things out that I haven’t, and I look forward to what that might be.

A great service

When Ann taught me, she provided a service. This service was of great benefit to me and my family. To me Ann was a person of increase. What she taught me lead me to a life of abundance because I was equipped to identify opportunities and prosper from them

I love cattle and the cattle business. This is my motivation for teaching the same sell/buy skills I use to others. I know they work and am confident in them. If I can teach this to other ranchers and cattle feeders the industry will be strong and persist for generations. I am extremely passionate about this.

Believe in yourself

In my schools I talk about how we need to believe in ourselves. Ever since we were young, limiting beliefs about the cattle business were hammered into our brains. Then life happens, we get thumped, and we see this as confirmation that what we were told was true. This tends to affect the way we see ourselves, usually allowing the limiting belief to settle in and become our paradigm. We will never outperform or out earn our limiting self-image.

There was a guy in this week’s class that works in finance/investing. I didn’t exactly comprehend what he does, but he told me to think of working with the type of people who are on Wall Street. He told me his world and mine are complete opposites. The people he works with all think they are smarter than they really are, and he’s trying to rein them in a bit so they don’t do something silly and risk losing all their money. I am trying to get people to believe in themselves. We both are trying to provide a service to others and be a person of increase to those people.

Know your self worth

Much of this boils down to knowing our worth. I have asked many of my buddies who are divorced what they believe the underlying cause was and they all told me that when they got married, they settled. They didn’t think they could get anyone better than the girl they were dating so they married her. This is the limiting belief. It is just like the one person we all know who makes $40,000 a year, and that person knows all the reasons why we can’t make $100,000 a year.

People who know their worth and assuming that worth is much higher will avoid this other person. If all there is in the sale barn café before the auction starts is negativity, you will see the person who has a higher self-worth eating their lunch by themselves. They know what they bring to the table and therefore are not going to allow themselves to be pulled down by the others.

Two reasons to sell out

As Ann taught me there are only two reasons to sell out. We are retiring, or we are not making any money. Lacking skills and being stifled with a self-limiting belief are why we don’t make enough money.

I know legit sell/buy skills are solid because I have built my entire business on them, and they have prospered me. I am the only current sell/buy instructor that currently uses them in my day-to- day business. To me these skills are priceless. Sadly, one instructor has taken a sponsorship to put on a school from an extreme environmental group who has been open about their belief that cattle are destroying the planet. I have seen ranchers boycott wines, beers, and products from other companies that have done something similar so I know they will do the right thing and send the message.

To me this is personal, and not just from the standpoint of his school competing with mine. When anyone accepts a sponsorship from a group like this the underlying message is short term greed and that the next generation in line, my daughter’s generation, doesn’t matter. The continuing legacy of the cattle business doesn’t matter.

The future

There was an auction barn owner in the OKC class this week. He was very concerned about the future of the industry. I am going to paraphrase what he said and hope I do it justice. He said that the reason we’ve made it this long is because the rancher has had a spine and would stand up to these outside forces. If we remove the spine, it is all over. We see this happening. Solar panels and wind turbines popping up all over ranch and farmland. We are selling out. We are selling out the next generation. 

We must learn to make money and pass those skills onto our kids so they can pass the legacy on to the next generation. If we make money, and know our true self-worth backed with belief and an unshakable confidence we won’t sell out to forces that do not have our best interests at heart. We can fight off these parasites.

Cattle markets

Even though we were on the road this week, we had plenty of time to stop in at some sale barns. The feeder market was hot once again this week, but as readers of this blog very well know it is the price relationships that matter the most. The Value of Gain this week sends a strong signal that this is a weight gain business. Feeder cattle are showcasing their superpower of weight gain. That being said, feeders are trading over and under-valued to each other, so we must be aware of the relationships to be sure the ratio of dollars to pounds on a trade is in our favor and that we are not bidding away VOG on a purchase.

At the auctions we stopped in there was a strong signal to wean calves. We saw big drafts of bawlers sell up to 20 back. It was hard not to notice that when these groups of calves came in some buyers set their cards down.

There was also a strong monetary gain capture to be had with feeder bulls as many of those we saw were up to 25 back. People with the skill to handle these types of animals stand to make some good money by providing the service of weaning and vaccinating, and also changing the bulls to steers.   

The opinions of Doug Ferguson are not necessarily those of or Farm Progress.

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