Knowledge Recession

Posted December 31st, 2009 — Filed in Bud's Musings

When I write something it always makes me wonder why anybody would read it and why  I wrote it in the first place. Then after reading what other people are writing it makes me even more confused about why anyone writes anything. Maybe it is like the person said “Isn’t it amazing that there is just enough news to fill the newspaper” as he noticed that every page was full.

What brought this on was  reading an article on the DTN (Minding Ag’s Business). Its title was “Buckle Your Seat Belts For 2010.” I’ll include some parts of the article so we can understand the thinking of people who are doing the writing. It starts out with “As the recession spreads through farm country, profits seem to be vaporizing. At these commodity prices, very few operations in either crops or livestock can project profits.” 

Then it goes on to explain how hard it will be to get credit or credit extensions. Then the solution that is given is to “Unlock the cash in your land as today’s interest rates will be the lowest in your lifetime.”  Why do we  think the solution to a problem is more of what caused the problem?  If there is no profit to be seen, why borrow on the (more…)

Expanding Your Business

Posted December 27th, 2009 — Filed in Bud's Musings

The dairy farmers are having problems just like a lot of people are now. At a meeting with the Justice Department’s antitrust division the issue was whether or not the largest players in the dairy industry were to blame.

It is always bad when businesses have problems but now, instead of realizing what actually caused the problem, there is the desire to blame someone else. Later in the article this is what they wrote.  “Dairy farmers nationwide are coping with historically low milk prices after a 36 percent drop in the past year to the lowest level in three decades. In 2007 and part of 2008, (more…)

Merry Christmas from Bowie, Texas

Posted December 25th, 2009 — Filed in Miscellaneous

72dpi

I’ve always heard the term “If you don’t like the weather around here, just wait a few minutes” but this is ridiculous! 

Wednesday, the weather was beautiful, probably about 70 degrees.  Thursday morning (Christmas Eve) we woke up to freezing rain which quickly changed to snow.  It “blowed and snowed” all day.  Road conditions were so bad that nearly all of the Churches cancelled their Christmas Eve services.

We woke up to a beautiful White Christmas this morning.  It is clear and calm and about 20 degrees.  With as much wind as we had yesterday we have drifts over 2 feet deep some places and only 3 or 4 inches in others.  The Bowie kids will finally have enough snow to make a proper snow man!  I wonder what tomorrow will bring?

No matter what the weather where you live, we hope you are having a Wonderful Christmas!

Cost of Gain . . . Cost to Keep (more)

Posted December 20th, 2009 — Filed in Marketing, Testimonials

Comment from a student:   Take a look at El Reno this week.  There is report of 6 #1 LM 558 pound steers that sold for $93.00  (Fleshy)  Just above them was the 557 pound steers at normal flesh that sell for $104.50  The fleshy calf cost $518.94 and the other cost $582.06   This market would have paid me $63.12 to take one pound off the fleshy calves.

This is where I totally get the “cost to keep.”  I have numerous trades where I take fat bawling bulls and turn them into thin yearling steers and loose weight doing it by putting them on cheap, mature grass.  Although I lost weight, I still made a profit.  It still cost me money to take off the weight in grass, time, skill, labor, freight and vet supplies.  But when I took them back to the sale at a lower weight than I bought them, they paid me for negative gain because I replaced them with a heavier, fat bawling bull. 

This may not make sense to anyone but me.  But there is real, spendable cash left over after each trade.

Keep smiling!  I know you mean it.

Cost of Gain . . . Cost to Keep

Posted December 18th, 2009 — Filed in Marketing, Testimonials

Question: . . . . after our visit to you. . .  we went home , and put your stockmanship to work for us, we are very happy for it.    We did not talk alot about marketing, but I was wondering about using cost of keep, verses BPCOG in the winter months? Ann has a article on here Q&A section that says cost of keep is bad, if your creating positive cashflow is this not what you want?

Answer:     Ann doesn’t understand Cost to Keep therefore she thinks that it has to be bad. The example she used had nothing to do with marketing.  The loss was because several died and there was only enough money left to buy what they bought.  We had nothing to do with the trade, didn’t even know it was happening. There are lots of things that don’t fit with the sale barn ticket. 

The BPCOG is just cost of gain with a profit. Cost to Keep is just what it cost plus a profit. They are exactly the same except the BPCOG is using per pound gain in weight or difference in weight and the Cost to Keep just uses the total cost whether there is a weight gain or not.
Use what works for you and makes a profit.

Disclaimer

Posted December 17th, 2009 — Filed in Marketing, Miscellaneous

When Eunice and I started the Marketing School and Website, we stated that we do not give advice on what trades to make or when to make them.  I would like to address this a little more.

Our schools and web-site are to show people how to figure what is underpriced and overpriced and how to understand what sell/buy marketing is about.  At no time do I tell people what to sell or when to sell, or what to buy or when to buy.

People have always been told to use all of their costs plus a profit when they are figuring.  At no time should a person use less than their total costs. That’s why we try to show how to even get full value for each different cost.

It’s always a shame that a person has to be so careful about everything we say or do, but since it is that way, we don’t give advice and have not given advice on what people should sell or buy.

I have, and will, post many things as we go along but they are only what can be done, not what should be done. It is up to each person to do their own figuring. The figuring that I do is just for an example, and how to figure what is overpriced and what is underpriced.

Letter from Australia

Posted December 15th, 2009 — Filed in Marketing, Testimonials

G’day Bud, Here is some feedback from a couple people :

Bud, the markets are interesting right now with sheep going through the roof, cattle falling  through the floor. Yet both cattle and sheep producers are doing really well who are using the Sell/ Buy system.
A cattle example is a producer sold cows and calves on a day when the market dropped for $490(not near what he expected), he took a breath and said well there must be a good buy here as well – not long before he had PTIC (bred) cows for $200 – a good profit after Cost of Carry.
A KLR Marketer was offered some lambs this week for $60 and ewes for $61 – the producer almost pleaded with him to take them as he was running out of feed and water. The KLR Marketer knew what they were worth in the market place so he took them home gave them a drink, then it was back on the truck to the market.  24 hours after the purchase they sold for $90 – not much cost of Carry there !!
The ewes were under offer last night for $120 – who says sheep are ground lice !!!
When everyone runs out of grass and water and you have carefully managed both you are in the box seat to make profits beyond reason.

Market Opportunities

Posted December 12th, 2009 — Filed in Marketing, Testimonials

Just to let you know I got the dvd’s the other day and we are working our way through them and really enjoying them. I liked reading what you have written in the last couple days about buying bred cows. That is just what I did on Monday and it really seems like it was a good move. I got a bunch for $550 average and some of them are better quality cows than we already have so I’m pretty happy with how it has worked.

Easy Gather . . .

Posted December 1st, 2009 — Filed in Testimonials

Last Friday I gathered 177 steers that I needed to sort and ship. There were
also three heifers from one neighbor and one steer from another neighbor.
All four of these came to be in my pasture as a result of being run by their
owners and jumping the fence into my place. When the neighbor cattle first
got there I couldn’t get within 1/4 mi before they were off to the races,
but over the course of several days they incorporated into my herd and would
drive nicely.

I drove all of these cattle very easily through a gate that I’d never used
before but the neighbor’s steer and three others made a break for it. I
checked their movement pretty easily  and even though they had to be driven
back about 1/2 mi they never tried to break again and went right on in the
gate. Those that had already gone through the gate weren’t interested in
coming back out while I regathered the four. What was interesting was the
neighbor’s reaction to all of this . He witnessed me driving his”crazy”
steer and couldn’t believe it. He said the steer had jumped three different
fences while he was trying to catch him.

He couldn’t believe how easy my cattle handled versus his. He had actually
bought most of these cattle for me and he had bought cattle just like them
at the same time. Our death loss this year has been .03% and his has been
3%+. He will doctor four or five times as many cattle per load as we will.We
talked a long time about destressing (which he had never heard of) and
walking the cattle (which he had never heard of) and he was absolutely
fascinated.

At any rate I just wanted to thank youall for all you’ve taught me. Of
course if we were being rated on ability from zero to ten I’d be a two and
you’d be a ten. Having said that, I used to be a zero so I think I’ve made a
lot of progress. I simply can’t wait to get to the pastures every day.
Thanks again.