If you Think Profit – you will find Profit

I am going to give away a secret to making money in the cattle business, no matter which segment you are in.   You must think profit, and commit to it.   If you hope to make a profit but spend most of your time worrying and/or thinking about losing money the predominant thought will certainly cause you to lose money.   And you already have your excuse handy, its these up and down markets that make it impossible.   There is nothing we can do right.   However, if you commit to making a profit you will find yourself taking the necessary steps to hit that mark.

Here’s my closing thought this week: People are upset and saying silly things like the market is broken and we need government intervention or a bail-out for cattlemen.   I, once again, outlined the market is trying to help us this week.   How is that broken?   We can make money on fats.  We can make money as back grounders.   The cow calf operator can make money with all the different classes of cattle in their inventory.   The market is giving us a chance to make some real money right now.   It’s also giving us the opportunity to lose big.   Our free will and our way of thinking will dictate which side we choose to walk on.

https://farmprogress.com/marketing/black-swan-markets-still-offer-profits

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The 6Ps of Cattle Marketing

by Ken Brubaker | Aug 15, 2015 | Brubaker Blog |

Product – Price – Place – Promotion – Possession – Planning

By Ken Brubaker, Brubaker Sales & Marketing, All Rights Reserved

Everyone measures their success in the Cattle Industry differently. Those goals may have many different meanings from producing and showing a National Champion to having a successful production sale or just having a productive sustainable breeding program. The Cattle Industry is one of the most diverse industries in our country, with many breeds, philosophies and kinds of cattle being produced. The great thing about that diversity is there seems to be a buyer for everything of quality within those different kinds. Our industry is very similar to the automobile or fashion industries. Over the years our industry has gone through many changes and usually those changes have translated into income. Right or wrong change equals an increase in income. When you have something that nobody else has they will want it.
Successful programs spend as much time developing and maintaining a marketing program as they do their breeding program. Regardless, if your program’s end product is feeder cattle or seedstock understanding and utilizing the basic principles of marketing give you an advantage and a much greater chance for success.

There are two truths that you will deal with in your marketing program. “Perception is Reality” and “You can have the best cattle in the world, but if nobody knows about them, how can you sell them”. Marketing is more than advertising, as you will see further in this article, advertising is only part of your entire Marketing Program.

Your Customer – Target Market

Before we get into the specifics of the Six P’s an understanding of your customer or “Target” audience is essential. As we already discussed the Cattle Industry is very diverse. Therefore, marketing to the entire industry is a waste of time, money and resources. It is critical to identify who your market is and get as specific as possible to reach that market. Some programs only sell bulls while others only sell females and some programs sell both. That along with identifying what type of breeder will buy your cattle based on pedigree, kind and philosophy allows you to be more efficient with your budgeted dollars and ultimately the results.

Identifying your customer is essential as the first step to guide you in all facets of your Marketing Program. While its true that you never know where your next customer will come from, it is important to understand demographically where your base will come from. Where, who, what are all part of identifying your base. If you are selling bulls to commercial producers, sell the benefits of those bulls and promote the sale to that audience.

Planning – The First P

The saying, “if you don’t plan – you plan to fail” is particularly true when it comes to developing a successful breeding program and marketing program. Planning is an essential part of your success.
Planning your advertising and marketing effort to dovetail with your breeding and calving seasons is important, so that your product is what it needs to be – when the buyers will buy it. If you are planning a bull sale and you calve in April-May you would not want to schedule your sale for January when the bulls are less than a year old. You will compromise their fertility, performance and data with underage bulls. Schedule your sale after the bulls reach a year of age or perhaps even sell them in the Fall as long-yearlings.

Measurements are important to most buyers, both, commercial and purebred producers. Planning your sales effort with your ability to acquire and record that data is important to give potential buyers the information they require to make buying decisions. Planning your breeding program so that you can acquire necessary data in time for your sale is important.

Product – What Are You Selling – Getting Your Piece Of The Pie

The most successful programs that I have observed are those that have a clear vision of what their product is. They have a mission or goal of the type and kind of cattle they wish to produce and a solid philosophy regarding management of those genetics.

It is important to differentiate your brand or product to buyers so they can relate to the genetics you provide them. While thousands of people breed, grow and sell Angus Cattle – not all programs are the same and not all genetics are the same. Product differentiation allows your buyers to zero in on the attributes and benefits of your genetics. In the grand scheme of things the cattle industry is a big pie and you want to get your share of that pie (market share). This is a tool used by other products and industries.

Look at how the soft drink industry has differentiated their products to gain market share. Coke is not just Coke anymore it is – Diet Coke, Cherry Coke, Coke Zero, Caffeine Free Coke and on and on and on. Regardless if you buy a Coke or a Coke Zero you are buying a Coke rather than a competitor’s product – increasing your market share of the soft drink market.

Identify your product to your customers and potential customers and promote the attributes and benefits of your gene pool. Production and performance will be a part of identifying your product – SO KEEP RECORDS ! Production information such as progeny ratios, calving intervals, daughters production are all important if you have identified your product as one that excels in maternal traits – so not only take down the information but submit it to the breed association so it is well documented. If you are selling bulls, birth weights, weaning weights, yearlings etc etc are all critical to give your buyers the information they want to make a buying decision.

Price – Getting Every Dollar They Are Worth

We all want to sell our cattle for as much as we possibly can. I am amazed how many times I go into a program and they expect top dollar for their cattle – but they don’t take care of the basics to create value and increase the value of the cattle they have for sale.

As mentioned above under PRODUCT, the money is in the details. Well documented production and performance information adds significant value to your product and increases price. Sure, some buyers are only interested in phenotype but most in today’s industry want to utilize the tools in the toolbox to make a decision, particularly since prices are at all time highs in all segments of the industry.

In addition to record keeping management also adds value. Nutrition, stock development and herd maintenance all play key roles in adding value. Over fed or under fed cattle will not command the highest value. Providing adequate nutrition to all the cattle to express their genetic potential at optimum levels gives you the greatest chance to add value to your product. The best pedigree and the best cattle “on paper” will not bring the best dollar if you don’t pay attention to the details of records and management to add value to your product.

Place – Where Do You Sell Your Cattle

If you are selling privately off the farm or ranch then you need to make it easy for buyers to find you and provide directions to them. Same is true if you are having an auction but you may have choices. An auction at the farm requires more facilities and more work to have that sale regardless if it’s a pen sale, video sale or traditional auction with cattle coming through a sale ring. You may find it easier to utilize a stockyards, fairgrounds or even a neighbor that raises another breed of cattle that would allow you to rent their facility.

All of these options have value depending on your circumstances and where you are located. The primary focus here is to conduct your sale at a location that is easy for buyers to find and participate.
More and more today we are holding video auctions where the cattle do not walk through a sale ring. These sales can be held anywhere. They can be held on the ranch or at a hotel that is in the nearest town. They could be held miles away if that is most convenient to the buyers to attend.

Possession – You Don’t Have A Sale Until The Buyer Takes Possession

This part of the Marketing Mix may sound self-explanatory, however, this is a key part of the mix. You conduct a sale and the buyer shows up pays for his purchases and loads the cattle and takes them home – you are done right ? No ! If he purchased purebred cattle then the possession of what he purchased is not done until you transfer the registration papers.

Many of the cattle we sell today are sold to absentee buyers – they are not present at the sale. Shipping costs today are higher than ever before with fuel prices what they are. It is a critical component of the sale to provide your buyers with service to arrange trucking

Promotion – It’s More Than Just Placing An Ad Somewhere

A successful Marketing Plan begins with a budget to keep you on track. This is always our starting point as it guides us through the process of keeping costs in line while placing a priority on media that reaches your target market. Our 20 plus years of experience in the advertising industry has given us insight to these different forms of promotion as there are advantages and disadvantages to all of them.
It is well documented that the most successful Marketing Plans utilize a mix in the kind of promotion used to reach the target audience. Technology has driven many changes in that mix over recent years, particularly since more consumers have access to high speed internet. Finding the mix that best reaches your target market has some trial and error to it. Talk to your customers and ask them what they read and how they get their information.

Print Advertising

Print advertising includes magazines and newspapers that cover both regional and local audiences as well as national. A mix of all of these types of print advertising should be utilized as long as they make sense and reach your target market. Our budget will be limited therefore we try to utilize publications that give us the greatest “bang for the buck”. Dare to be different in your ads to capture attention. Your ads need to stand out and capture the reader’s attention.

Broadcast Advertising

Radio and TV provide opportunities throughout many parts of the country and deliver a low cost/thousand audience. Broadcast advertising puts immediacy to your message. Prepare yourself for some sticker shock with some of this media but our research has shown that it can deliver new customers to the established program and bring an industry to a new program.

Electronic Advertising

Electronic media in the form of the internet and E-Mail have exploded over recent years. This is largely due to the ease at which you can create content and copy but more importantly the low cost.
Website – for as little as $500.00 you can direct your customers and potential customers to an electronic brochure that gives them information about your program. Websites should be simple and easy to navigate through. You can give customers a tour of your ranch and cattle program while they sit in their living room. You can offer cattle for sale and promote your production sale very inexpensively particularly when you promote it through an E-Blast program as we have at BSM.

E-Mail Blasts

This service has exploded in recent years with many firms offering the service. Be careful through – just as in a “snail mail” mailing list it as only as good as the database. The database needs to be constantly added and deleting bad addresses that waste your effort – however the cost to do this is very cheap and can add further traffic to your website and more interest in your upcoming sale.

Direct Mail Advertising

Traditional direct mail, brochures, sale books or newsletters are still very affective tools. Not all producers use the internet (or do not use it regularly) and will not get your E-Mail or view your website.

Attractive brochures and newsletters grab attention and can tell your story. Many producers will keep your brochure to refer back to when they are ready to buy.

Brochures, newsletters and post cards can be expensive to produce however they are still cheaper to mail than a sale book. We have found it a good strategy to send out the direct mail first and ask for a sale book request – rather than mail thousands of sale books that can run as high as $3.00/each with postage.

Personal Selling

Nothing takes the place of personal selling. While you may hire a firm like Brubaker Sales to do a lot of the for you – many customers still want to talk to you and get to know you before doing business.

Attend events locally, regionally and nationally and give others an opportunity to get to know you – I’m sure you are a likable person and this will allow a selling connection – even if you never try to sell them anything. Get involved with breed associations and cattleman’s associations to build relationships with other producers that can become your customer.

Outdoor Advertising

You may be amazed how important a sign at the end of your lane or along the highway can be to your marketing program. Not everyone has a location suitable to a billboard on the interstate but if you are this can be a great way to promote beef to consumers and promote your program.

Customer Service

I’ve included Customer Service as part of promotion simply because that is exactly what it is. Good customer service becomes good promotion and bad customer service becomes bad promotion. In our industry we deal with mother nature and things don’t always turn out the way we want – we can limit the negativity by working with a customer to repair the problem. The programs that take care of their customers keep their customers and those that don’t loose them. Be fair and responsible to your customers and they will return to do business with you for many years.

Educated Cows Eat Weeds!

Turn a Foe Into Forage

In 2004, Kathy Voth invented a method for training cows to eat weeds. The idea grew from the responses from ranchers when she suggested they use goats or sheep to manage weeds. That just wasn’t an economically viable or sustainable solution for them.

Kathy believes that animals are a good solution for weed management, so she decided that if cattle ranchers weren’t interested in goats or sheep, she’d figure out how to turn their cattle into weed managers. Using discoveries made by researchers at Utah State University, and decades of animal behavior studies, she put together a very logical set of steps for teaching cows to eat weeds.

Minimal Time Investment
Using Kathy’s process a cattle producer can teach cows to eat weeds in as little as 10 hours over 10 days and then sit back and relax while the cows get to work.

Cows Are Good Learners and Teachers
A small group of trainees will teach their calves and herd mates to eat weeds, to create a weed eating army in the course of one grazing season. Cows will continue to eat the weeds year after year and add new ones without additional training.

The Training Steps Click HERE

Wealth really comes from sunshine

Improving the life processes that convert sunshine to energy on the ranch or farm can increase all forms of wealth.

Walt Davis 1 | Feb 18, 2020

Ranching is different things to different people but like all types of agricultural endeavors, it comes down to converting sunlight into wealth through green plants and photosynthesis.

This wealth can take several forms aside from money. Grazing animals, especially ruminants, can convert vegetation that is inedible to humans into high quality food. This can be done, without machinery, on land that is unfit for cultivation. Lately this has been getting press under the guise of “upcycling.”

There are other beneficial products, but one desperately needed in today’s world is improved water management. In some situations, if grazing management is used properly, it can double or triple the amount of precipitation captured and used to grow vegetation. This management will also greatly increase the amount of water that accumulates in the soil and in subsurface aquifers.

Proper grazing decreases the likelihood of flooding and increases the usefulness of precipitation. These advantages come about through creating the conditions that allow water to enter and be held by the soil. Foremost amongst the conditions is keeping the soil surface covered with organic matter.

I was on a ranch recently in the hot dry summer when a four-inch rain fell in about four hours. This was followed several hours later by a two-inch rain. This ranch is rolling sandy loam with sandy clay subsoil and has some steep slopes. Little, if any, water ran off the ranch while the neighboring areas had heavy runoff of muddy water.

The difference was the amount of bare ground on the two areas. The ranch with good ground cover absorbed the rainfall to the degree that the tanks (ponds to those of you not from Texas) caught no water. Twenty-four hours after the rain stopped, clear water began to flow from springs into the tanks.

What is the value of six inches of rain stored in the soil rather than running down the creek? There are millions upon millions of acres world-wide that are totally ineffective in capturing and storing rainfall. Water shortage for crops but also for humans is already critical in many areas. Good grazing management can dramatically improve the water cycle of these degraded areas while producing food and profit.

A second condition critical to improving water capture and retention is soil organic content. Organic matter that has been processed by microbial action can seize and hold many times its weight in water. Soil life is dependant on soil organic content, and plants are dependent on soil life. Soil life, especially mycorrhizal fungi, produce the organic compounds – essentially the glue – that holds soil particles together in aggregates and gives soil the porosity and permeability that allows it to take in and hold both water and air.

A big portion of soil organic content comes from root exudates – mostly carbohydrates – pumped into the soil by living plants. In a classic example of symbiotic relationship, the root exudates nourish the soil lifeforms which nourish the plants that provide the root exudates.

Given the opportunity, natural forces promote life to the benefit of the whole soil-plant-animal complex. This is not always a straightforward process. Drought can cause an explosion of grasshoppers by killing the fungi that normally limit the viability of the hopper eggs. When normal weather returns, the fungi will return, and balance will re-establish in insect populations. If we intervene with insecticides spread over large areas, the ecology of that area becomes unstable with ongoing wide swings in both populations and numbers within populations.

Catastrophes such as wildfire, drought and flood happen in the natural world, but only man prolongs the effects of these events. Millions of acres of grassland have been destroyed by holding stock on areas that can no longer feed them. The diversity of life from plants, animals and microbes provides stability and productivity, but it is destroyed when management focuses on “kill the pest” rather than on fostering the conditions that promote health through out the local environment. This may sound sophomoric, however it is not only possible but much more effective financially, ecologically and to human benefit than what is common practice over most of the world.

Rural Lands At Risk In The West As Ranchers Prepare For Retirement

By COOPER MCKIM • FEB 2, 2018

Winds were gusting over 45 miles per hour on an overcast day at the Dunmire Ranch in southeastern Wyoming. Black cows grazed in the distance with wind turbines lined up on the horizon. At the center of ranch, young colts milled around the corral. Gator, a 14-year-old blind and deaf dog, barked, guarding the home of rancher Les Dunmire.

Inside the house, Dunmire put on his dirt-caked cowboy hat and boots, as he told me how he’s owned this ranch for just over 30 years and that this lifestyle goes back generations.

“My dad had a ranch in Iron Mountain Wyoming and my granddad had a ranch in Sioux County, Nebraska,” Dunmire said.

Land on the Dunmire Ranch

CREDIT COOPER MCKIM/WYOMING PUBLIC RADIO

 

Back when he started in 1987, Dunmire only had a few hundred head of cattle. Now, he owns over 100,000 acres and 1800 head of cattle. But at 66, Dunmire is starting to take a step back from it all.

“I always tell people that I’m going to work as long as I can and then become a burden for my children,” Dunmire said,”but seriously, as we get older we do a little less. As we get older, we transfer more of the day-to-day operations of the ranch to our children.”

Dunmire said he sees passing on lands as the last responsibility of a rancher. “We’re trying to get it to the next generation, or the next two generations, intact with the smallest amount of tax pain that we could possibly have,” Dunmire said.

He’s been preparing for succession now for 26 years. It’s required an accountant and lawyer to figure out the best way to keep his kids from drowning in estate taxes. One strategy has been to divide the land into six legal entities. To put the situation in context, Dunmire recounted the story of how his dad came into his ranch. It also serves as a worst-case scenario of poor estate planning.

Sign at the entrance of the Dunmire Ranch

CREDIT COOPER MCKIM/WYOMING PUBLIC RADIO

 

“There was kids that wanted to stay there, but when the grandfather passed away he had not done any estate planning or gifting or anything to get ready to pass it on. And they had to sell the ranch, basically, because of [the] tax situation,” Dunmire said.

He’s far from the only one going through this process. In 2012, the average age of farmers and ranchers hit a record high of 58 years old. According to a report from the National Young Farmers Coalition, 63 percent of farms are on the verge of transitioning. Experts say the U.S. needs to be prepared for a massive land transfer in the next decade.

John Hewlett, a farm and ranch management specialist at the University of Wyoming, is one of many who working to smooth that transition.

“A lot of folks need help in terms of transferring ownership, worrying about how to best structure their farm or ranch in terms of tax, as well as making sure that the ownership is transferred such that the ranch or farm can be viable after the transfer,” Hewlett said.

He said easing the transition isn’t just about helping the older generation, but the younger one. That’s increasingly tough with fewer and fewer young people joining the industry. In 2012, only 6 percent of farmers were under 35.

“They become educated and they have other income opportunities as a result. It’s a lot different than 50 years ago when a lot of people’s focus was to be on the land, and to do some kind of jobs on the farm. It was part of the family’s activities,” Hewlett said.

Principal operators by age group

CREDIT USDA CENSUS OF AGRICULTURE

 

He’s helped create a website full of resources on steps to take in land succession. There are many other organizations offering seminars, programs, and workshops as well, like the Plank Stewardship Initiative, University of Wyoming Extension, and the Western Landowners Alliance. Lesli Allison, executive director of the WLA, said her organization wants to help lower the barriers to entry for young people by supporting policies like loan debt forgiveness programs for those weighed down by student debt.

“As a nation, we need to be looking at policies and economic strategies to sustain these landscapes and make it possible for people to make a living in the rural west, to stay on that land, to raise families on that land, to stay in rural communities in a way that supports both agriculture and conservation,” Allison said.

She said a football field worth of land is lost to development every two and half minutes in the west. And that’s partially private land that supports wildlife, clean air and water, and biodiversity.

Average Age of Principal operators

CREDIT USDA CENSUS OF AGRICULTURE

 

Allison said beginning the process of land succession early is crucial to preserving ranches and farms, whether there’s an obvious heir or not. That starts by simply talking about it.

“Simply raising awareness and encouraging uncomfortable conversations.” Allison said, “they can become quite positive and transformative.”

Back at the ranch, Dunmire drove his red truck through a shallow, ice-laden stream, giving way to an open field with hundreds of cows grazing. A few trotted out of the way as the truck drove past. Dunmire said he’s loved raising a family on the ranch.

“The family is intertwined with the ranch and it’s a great place to raise cattle and kids,” Dunmire said.

And he said he feels lucky to pass that on.