We sometimes hear things about time management. Thing is we can’t manage time. If we could, we would be able to speed it up, or slow it down, or even stop it. While it is impossible to manage time we can manage the activities we chose with the time we have.
Busy is the socially acceptable word for blowing things off. If we are expecting someone to show up somewhere and they don’t they simply tell us “I was busy and just couldn’t make it. You know how it is”. Thing is if we really want to do something we will find a way, if not we will find an excuse.
A mentor once told me that when we get our money situation figured out, we’ll be surprised how much more time we have on our hands. I quickly realized he was right, but it took some time for me to figure out how it actually works. When we set a money goal and commit to it, we don’t do other activities that won’t help us toward that goal. We manage our activities better, freeing up some time and still hit our money goal.
Time is the force that changes things. By actively marketing cattle on a regular basis I have gained rare and valuable experience. This led me to make some changes to some of the material I teach in my marketing school compared to what the other instructors teach at theirs. In the inventory triangle of cattle, money and feed, I added time into mine.
We all have twenty-four hours in a day and time is the most powerful force multiplier in the world. Over a period of time under-valued cattle become over-valued. The cattle cycle takes time. It takes nine months for a cow to replicate herself, and it takes a little time for her to breed back. Over time the cow grows older and depreciates in value. When cattle are gaining weight they only have so much time before they hit their end point.
The power of compound interest takes time. We put some money away and it gains a little interest over some time. The interest income then starts making a little money for us, even though it's just a tiny amount at first. Then over time it gets bigger and bigger.
Knowledge and skill compound over time. In order for them to do that we have to actively put them to use. If we put our money in a shoe box it is worthless. It won’t grow. It just sits there and is nothing more than a pile of paper. If we don’t apply our knowledge and skill, they too are worthless. Over the years I have heard many people in their 50’s and 60’s say they wish they had gone to a Sell/Buy marketing school when they were young because they’d be so much better off. That’s the power of time and compounding.
Last week I wrote about how things are easy to do, and just as easy not to do. The choices we make daily will have a huge affect on us down the road. So we must make choices today that when multiplied over time will yield us the results we want.
Buy/sell vs. sell/buy, a case history
The choices we make are based on our philosophy. This week gave me a perfect opportunity to compare the choices made from a buy/sell philosophy and that of sell/buy.
Earlier this year when I was writing on here that the Value of Gain was almost nonexistent compared to Cost of Gain it went mostly ignored. There were some local stocker operators that plowed hard into fly weight calves, buying the most over valued weight in the spectrum. This week those cattle came back to town and they were in a weight class that offered very little VOG. These guys operate with buy/sell thinking. The market has gone up since they bought those calves so to their line of thinking they made some money. If the market had stayed the same as it was when they bought those calves they would’ve lost money. What they did took no skill or brains to do, it was all dumb luck that the market came up enough to bail them out.
At the same time at the same sales I was buying cattle too. Only I bought stock much different than theirs. I knew mine needed time. I bought a lot of cattle that needed something. It might have just been a wean, or it was a cosmetic blemish, or better nutrition. These cattle also were going to need time to grow and bloom up.
Here’s a side note. Some people rely heavily on spreadsheets for their marketing. The cattle I bought last spring would look under-valued on any spreadsheet because that is simple math. What doesn’t show up on a spreadsheet is the judgment calls that need to be made before buying the cattle I did. It was going to take time to make them presentable to resell. That means having enough cash on hand to pay bills if the cattle need more time than I might have guessed. I had to trust my intuition that they were worth buying. I had to trust my experience and skill that I had the ability to address what they needed.
In a nutshell over time the other guys turned $1.80 cattle into $1.40 cattle. In less time I turned $1.20 cattle into $1.60 cattle. Clearly, we sold different weights, we also sold different sexes. They had steers and I had heifers.
Over time I took poor quality cattle and advanced them. I captured value for my labor, skill, time, and feed. This is value-added marketing. The choices we made last spring came to the surface this week. It just took time.
The replacement buy for my heifers included some bawling feeder bulls and steers. I was able to capture some value by upgrading sexes, and I’ll capture more value with time by getting a hard wean on them and a rubber band. The choice I made this week to buy those cattle set me up for more success in the future. I just gotta put in the work and give it some time
Here’s the other thing. When you do buy/sell marketing your exposure to risk is the time you own the cattle. If you’re lucky like these other guys were, the market will go up, but it could’ve just as easily gone down. When you do sell/buy marketing your exposure to risk is the time between the sell and the buy. We don’t sell anything unless we already identified a replacement buy. That means we can manage our risk much better than the other guys.
A look at local markets
Usually when I look at what cattle are selling for a pattern develops as far as VOG and what is over or under-valued. This week it varied from one sale to the next. The only constant this week was that seven weight heifers were a dead spot. There wasn’t much interest from buyers for them and they consistently had a poor VOG.
Some sales had 20 dollar slides on fly weight steers which eroded their VOG. While other sales had a slide of less than 10 making an attractive VOG.
Fly weight heifers saw a huge roll back this week with tight slides setting them up for the best VOG up to 700-pounds. There was good demand for 8 weight heifers making them a great sell.
No matter if you had steers or heifers demand from buyers dropped on cattle weighing 9 or bigger, signaling there is no point making them that big before selling them. It's clear the feedyards want to put the weight on them from there.
Multiple load lots sold the best this week. It was hard not to notice that colored cattle were selling at a discount to black cattle. The discount for unweaned cattle was 10 or more. One sale barn even pointed this discount out on its website when they posted their market report, strongly urging sellers to get them weaned. Feeder bulls were 20-30 back. Geographical spreads are a factor again, it's well worth paying a truck driver right now.
Note: You can get personal insight from Doug Ferguson at Husker Harvest Days, September 14-16 in Grand Island, Neb. Mr. Cattlemaster will be speaking each day at 11 a.m. in the livestock demonstration area on the northwest side of the show lot. It's your chance to meet him and get insights on his sell/buy approach in person. Make plans to attend.