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A local high school girls team earned a thrilling victory in the Nebraska Girls State Basketball Tournament last night, advancing against a team it beat twice earlier this season. With 13 seconds left, the freshman hit both of his free throws to give her team a one-point lead. The opposing team had two shots in the final seconds, but both missed. Remaining calm was the deciding factor. The Nerves outplayed the opposing team, and the shots they fired were too hard and bounced off the glass.
I’ve seen many people get nervous this week. Some people want to buy a cow until they punch numbers into a calculator and realize it will cost nearly $40,000 to fill the gooseneck. Some people seem to be panic buying because they believe that if they don’t buy it now, they won’t get it. Others seem to think they can do no wrong and will buy the cow no matter what it costs.
speed up and calm down
“Buy the panic, sell the hysteria,” the host said on this week’s investing podcast. I can’t figure it out because I’m looking at both at the same time in the sales I went to last week and this week. The best mentor I ever had told me I needed to speed up and calm down. He said we need to remove clutter from our lives and direct our energies calmly and confidently.
No matter what we do or think, it is part of being human to feel some kind of emotion. Whether we have sound marketing skills or not influences our emotions. Proper buying and selling skills can help us maintain our composure, but those who don’t have them end up on either side of the emotional spectrum. The reason is that buy-sell marketing indicates the relationship that exists. They do not realize that prices are rising or herd numbers are decreasing.
Continuous buying and selling marketing
There are two definitions I use for buy and sell marketing. One is that inventory is continually liquidated and replenished, generating cash flow and profits. It must be continuous. If not, you will be distributing your business and going out of business. Some are fair-weather cowboys, people who don’t hold any stocks during the winter. They sold it last fall and now they’re showing up to start buying again and I’m in sticker shock. The current cost of purchasing an animal is that the animals sold last fall appear to be undervalued. In buy-sell marketing, the time between buys and sells is at risk. You can control the length of this window. These people can’t help but end the auction early without making any bids. A while back I wrote here about how high we can push this bar before people stop buying. For some, that point has already been reached.
For those who are concerned about stock losses due to lower inventory valuations when the market declines. I see that some people have already had that experience because they didn’t replace it quickly and properly.
panic buying
Some seasonal buyers only buy steers, but this year they are also adding a few heifers. They are looking to use rollbacks to expand their capital. High-quality replacement heifers commanded a $12 to $15 premium, but were still cheaper than steers. They adopted them along with the common heifers they had purchased. I don’t know if this is happening across the country, but stocker operators who require cow and calf work to produce the stockers they purchase are encouraged to support the cow and calf sector by doing this. You can not. This is the panic buying I see.
fly weight cow
Usually I write here about using value of gain (VOG) from a seller’s perspective to avoid price cliffs. I thought I had a card to buy a flyweight cow this week. Turns out I was completely wrong. I saw some new buyers go hard on these lighter weights and he was paying the same dollars per head that 5 weights would bring. What they did was buy 5 weights and when the sale was over he loaded 4 weights onto the trailer. Now they’re burning expensive bait to make the flyweight weigh 500 pounds, and by the time they get there it’s probably going to have more bait in it than it’s worth. They burn capital and mismanage things within the inventory pyramid. The buyers I mentioned think they can’t do anything wrong. And in case some of you are wondering what I did because my plan didn’t work out, I found another relationship and bought those cows, and I I’m pretty happy with what I accomplished. The path of mathematics is a route.
People have been asking me this question more and more recently. Do you pay attention to relative value? Of course you do. I wrote about this a long time ago when I compared traditional ESAs or 529s to trading stockers. In our day-to-day work, we run metrics that compare to several other investments. This is the answer of knowing and understanding yourself. What do you know? Are you even trying to inform yourself of things you don’t know? Some people answered these questions when they ended the auction early. For some people, he is too uncomfortable paying $40,000 to have a gooseneck filled.
Stay focused and calm
I heard on another podcast that the total inflation rate for the past two years has been 22%. Compared to a year ago, the number of feed cows has increased by more than 30 percent. Since flipping our calendars a few months ago, I, like other producers, have been feeling the pinch of sharply rising service costs. These relationships still exist. Importantly, we need to ensure that we market these animals in a way that gets our share as well. It never fails, and when prices go up, other companies think they need to step in and fix their margins. Increase your speed, maintain your intensity, keep your focus in the right direction, and stay calm. Winning is an event and becoming a winner is a process.
Doug Ferguson’s opinions are not necessarily those of beefProducer.com, beefmagazine.com, or Farm Progress.
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