How valuable is time to a cattle producer?

Source: Farm Progress. The original article is posted here.

How valuable is time to a cattle producer?
Summer schedule is up to full song for my family. Our daughter is busy playing basketball and working some summer jobs. Compared to what I earned when I was a teenager, I am amazed at how much money she is making at these jobs. What she earns in one hour took me four or more hours to earn. Here’s the rub, I could work a little over four hours and was able to fill my gas tank and still have enough money left over to purchase a couple cans of smokeless tobacco (don’t start; it is extremely difficult to quit). My daughter can work for four hours, and her earnings will barely fill a gas tank.

Even though her wage is 4.4 times bigger than mine was, I had more purchasing power. Inflation has a lot to do with it, we all realize that. The point that I am trying to teach her touches on the piece I wrote last week . What are we doing to add value to our time? We need to learn skills that separate us from the pack and gain experience and wisdom. We all know someone or maybe you are that someone who has been working the same job for 15 years or more and some rookie fresh out of school is making almost as much as the veteran. Some of that may be due to the fact the job is only worth so much. The thing is we have this idea that experience and loyalty should be rewarded, and we expect to be paid more than a rookie. If we do nothing to add value to our time that makes us worth more, we will see the value of our time depreciate.

As followers of this column know, my daughter has cattle of her own. This started with me loaning her money to get started. As we marketed, those cattle profits were used to repay the loan, then they were used to virgin buy more cattle and expand her numbers. With her being involved in many activities at school and basketball, she isn’t around much to help with the cattle, so she is learning what it’s like to have a passive income.

Life lessons

At the age of 13 she is learning about two cashflow quadrants. She is learning about selling time and labor to buy money. Or the other way around, her employer is selling her money to purchase her time and labor. This is a sell/buy trade. Since my daughter is young, her time isn’t worth much because she has a lot to learn. This makes the arrangement great for my daughter because she is gaining work experience. It is also a great arrangement for her employer because they are busy and by paying my daughter to help them, they are buying back their valuable time, at a discounted rate. And right there I just touched on value relationships. This is why it works for both parties. Sell/buy marketing is involved in everything we do whether we understand it or not.

She is also learning about tradeoffs. Yesterday her employer had a crisis and called asking if she could come to work. Everyone was a bit sleep deprived, which affected their mood a bit. My daughter was totally fine with it because she realized that by being there, she was getting out of helping me put up small square bales.

Generational perspective

Some of this experience she is gaining has got her thinking. She pointed out that older people look at young people and say that the next generation isn’t any good. She asked if I went through that. I had to confess I didn’t. I am part of the Latch Key generation and a farm kid, so I was always praised. I was told that if a kid from California applied for the same job I did that I was the one that was going to get hired because I already knew how to work.

That right there is the problem. I was being programmed to become an employee. Everyone around me while I was young was guilty of taking part in this programming. I was fortunate, I had a part time job in high school where I encountered my first mentor. When we took breaks in the afternoon, he would talk to me about things teenagers don’t think about. How to build a community, or how to build and run a business.

Talk to your kids

Those are the discussions we need to have with our kids. We should teach them how to be hard workers, and the value of work ethic. But we should not be doing it to prepare them for export to become someone’s star employee. We should teach them that they shouldn’t take a job for money, that they instead should take a job to gain experience and to learn. Then when they are equipped they become a manager or the boss at that job or they quit and become an entrepreneur. We need to teach them that eventually they shouldn’t be working for money, that they should get satisfaction from work.

Market moves

This week the market was clear about what it wanted and where it wanted it. The Value of Gain (VOG) suggests this is a weight gain business. It also clearly stated that it will not pay to make a six weight into a seven weight, and it also not going to pay us to make nine weights.

We have been conditioned to think performance, and extra pounds will lead to profit. When a buyer can buy cattle that are 160 pounds heavier than another set of same sex and quality and only have to pay $32/head more for that weight, the seller subsidized the buyer. Talk all we want about efficient cows and performance sires, with what things cost today, that cow would have to put that 160 pounds on that calf for less than 20 cents a pound to make it worth it.

Some of these condensed VOG numbers are making some weights an attractive buy back against fats. Feedyards need to understand price relationships because some weights, sex and location are setting them up for buying a huge loss.

The VOG in the southern states is a thing of envy right now. Especially when compared to the western plains where we saw consistent leap frogs. Depending on how a producer in the western plains utilized the market this week, that person may disagree with me if he utilized one of the leap frogs and was paid to take more weight home than what he sold.

Feeder bulls were up to 30 back and fleshy cattle were 10 back.

Weaned cattle were equal-to or even higher than unweaned cattle in the western plains. This always causes me to wonder how weaning is going when I see this. When there is a big discount for unweaned cattle we know for certain that weaning isn’t going well at the grow yards. When we see unweaned cattle bringing more we have to wonder is it going smoothly or are buyers having issues with weaned cattle coming in. To be blunt, did the cow-calf producer screw up the weaning process? If you wean at home and do a good job of it, you will earn that reputation and buyers will take notice.

What I am guessing may be the issue here is short weaned cattle are being auctioned off, and that is why the fresh ones are worth more. I have repeated it many times on here and will do it again many times on here. Stop selling short weaned cattle! Talk about devaluing your time. A producer puts in the time and labor to get the calf to the point of selling it then in the last 10-21 days corkscrews all that time and effort. Nothing sends a stronger message to your customer that their success doesn’t matter than a short wean.

Copyright © 2024. All rights reserved. Informa Markets, a trading division of Informa PLC.