Category: Business

COMPETITIVE ADVANTAGE

Holding on to Your Advantage –

By Kit Pharo

In last week’s PCC Update, we discussed the need to have a competitive advantage – and how to obtain one.   This article was written for the benefit of the many PCC subscribers who already have a competitive advantage.

NOTE: If you don’t have a competitive advantage, I suggest you re-read last week’s PCC Update.   We believe having a competitive advantage will be the difference between mere survival and true success in the future of the cow-calf business.

You have a competitive advantage because you were willing to step out of the status quo herd and do a better job of running your business.   However, you will only have a competitive advantage until the majority discover they can do what you are doing.   Rest assured, this will take much longer than it should.

Eventually, though, yesterday’s Herd Quitters will become the new status quo.   If you want to maintain your competitive edge, you must continue to change with the times.   You must recognize when you are in danger of becoming the new status quo, and start looking for new advantages.   This is a never-ending challenge that I love.

Henry Ford is an excellent example of a leader who fell behind.   It has been said that Henry Ford was 20 years ahead of his competition for the first 20 years of his business – and 20 years behind the next 20 years.   During the boom years of the Model T, over two-thirds of the cars in the U.S. were Fords.

Henry did what he had to do to become the leader in the early car business – but he failed to adapt and change with the times.   For example, he thought every car should be black.   He allowed his business to stagnate under its previous success.   The same thing can happen to us if we’re not careful.    Nothing stays the same!   The key to staying ahead is to adapt to change as it is taking place.

Quote Worth Re-Quoting –

“It is not the strongest of the species that survives, nor the most intelligent that survives.   It is the one that is most adaptable to change.”   ~ Charles Darwin

“It is not necessary to change.   Survival is not mandatory.”   W. Edwards Deming

Production Per Acre –

By Tim Goodnight

Shifting the focus from production per cow to production per acre has been shown to increase profitability.  It’s no secret that smaller framed cows will produce more calves and more total pounds per acre.  In addition, these lighter calves are worth more per pound.

More pounds that are worth more per pound is a win-win, right?

As simple as this concept is… status quo producers can’t seem to understand that by focusing on individual growth and weaning weights, they are limiting their profitability.  Despite the emphasis placed on growth, the status quobeef industry has not been able to increase average weaning weights over the past 15 years.   The only thing that has increased in the last 15 years is cow size.  This has led to the increased use of expensive inputs, which has had a negative impact on profitability.

So how can producers increase production per acre?  It begins with a paradigm shift.  Shifting the focus to the production and performance of the entire operation instead of the individual animal is the most important first step.  Next,you should align your operation with a program that has shown the ability to increase total production without expensive inputs.  Pharo Cattle Company has been that program for 30 years.  If you’re ready to increase your ranch’s total production and profitability, we can help.

Quote Worth Re-Quoting –

“In times of change, learners will inherit the earth – while the learned find themselves beautifully equipped to deal with a world that no longer exists.”   ~ Eric Hoffer

“Those who cannot change their minds cannot change anything.”   ~ George Bernard Shaw

The Learning/Doing Gap

Seth Godin

Our society separates them. Somewhere along the way, we decided that one interfered with the other.

Go to school for 8 years to become a doctor–most of that time, you’re learning about doctoring, not actually doing doctoring.

Go to work as a copywriter. Most of the time, you’re doing writing, not learning about new ways to write.

The thing we usually seek to label as ‘learning’ is actually more about ‘education’. It revolves around compliance, rankings and “will this be on the test?”

Being good at school is not the same as learning something.

One reason that we don’t incorporate doing into education is that it takes the authority away from those that would seek to lecture and instruct.

There are 56 million people in K-12 (compulsory education) in the US right now. Most of them do nothing all day but school, failing to bring real-life activity, experimentation and interaction into the things that they are being taught.

And there are more than a hundred million people going to their jobs every day in the US, but few of them read books or take lessons regularly about how to do their work better. That’s considered a distraction or, at best, inconvenient or simply wasted time.

The gap is real. It often takes a decade or more for a profession to accept and learn a new approach. It took gastroenterologists a generation before they fully accepted that most ulcers were caused by bacteria and changed their approach. It has taken our justice system more than thirty years to take a hard look at sentencing and corrections.

It could be because we’re confusing learning with education. That education (someone else is in charge and I might fail) is a power shift from doing, so I’d rather be doing, thank you very much.

What happens if the learning we do is accomplished by always engaging in it in conjunction with our doing?

And what happens if we take a hard look at our doing and spend the time to actually learn something from it?

When police departments invest time in studying their numbers and investigating new approaches, they discover that efficacy and productivity goes up, safety improves and so does job satisfaction.

When science students devise and operate their own lab tests, their understanding of the work dramatically improves.

Education (the compliance-based system that all of us went through) is undergoing a massive shift, as big as the ones that have hit the other industries that have been rebuilt by the connection and leverage the internet brings. And yet, too much of the new work is simply coming up with a slightly more efficient way to deliver lectures plus tests.

I see this every day. People show up at Akimbo expecting lifetime access to secret videos, instead of the hard but useful work of engagement.

The alternative? Learning. Learning that embraces doing. The doing of speaking up, reviewing and be reviewed. The learning of relevant projects and peer engagement. Learning and doing together, at the same time, each producing the other.

If you want to learn marketing, do marketing. If you want to do marketing, it helps to learn marketing.

That same symmetric property applies to just about everything we care about.

To quote the ancient rockers, “We don’t need no… education.”

But we could probably benefit from some learning.

In the middle of all this doing, this constant doing, we might benefit from learning to do it better.

Woe is Me – By Kit Pharo

I skim through many beef publications on a daily basis.   Within the last two weeks, I have read the following statements in various online and printed publications.

  • The average age of farmers and ranchers in America has been increasing drastically over the past 30 years.
  • From 2002 to 2015, the cost to produce a weaned calf more than doubled from $400 to $875 per cow.
  • The average net farm/ranch income was negative for 2018.
  • Farm bankruptcies in some states were up 60% in 2018.
  • Calf losses this spring were well above average because of snow, cold and wind.
  • The USDA reported that since 2013 there has been more than a 50% reduction in net farm income.
  • Total farm income decreased $9.1 billion in 2018.
  • Total farm debt increased $410 billion in 2018.
  • Delayed corn planting will have a negative effect on feeder cattle prices.
  • Net income has been dropping due to circumstances out of farmers’ and ranchers’ control – dropping commodity prices, increasing input costs, machinery purchase costs and repairs and inclement weather.

These statements don’t paint a pretty picture, do they?   They leave little room for hope – especially for those who are struggling to make a decent living in the cow-calf business.   It’s easy to understand why some producers are throwing their hands up in despair, thinking, “Woe is me.   What can I do?”   Most are doing nothing – which just makes matters worse.

I believe all but one of the above statements are true.   The last statement, however, is FALSE!   It will make producers feel a little better about the situation they are in – but it will discourage them from taking any appropriate action.   Truth be known, very little is totally out of our control.   We just like to think things are out of our control because we’re afraid to think or look outside the box (paradigm) we have put ourselves in.

At the risk of upsetting more subscribers, I am going to do my best to challenge you to look and to think outside the box you have put yourself in.   We have all put ourselves in a box of some sort.   Our actions and our success are limited by the box we have put ourselves in.   Thinking outside your box will probably go against conventional thinking – but I want you to understand that it is possible to create a very profitable, enjoyable and sustainable business.   I want you to understand that it is possible to create a very bright and prosperous future for the next generation.

In last week’s “The Next Generation” article, I asked, “What do you need to do to adapt to the changes that are taking place in the cow-calf business?”   I went on to say, “If you have been paying attention, you already know the answer to that question.   The real question is… do you have enough courage to break away from the status quo, herd-mentality way of thinking so you can make the right decisions?”   Herein lies the problem for most people.

Let me begin by admitting we have no control over the weather.   However, we do have the ability to plan for most weather-related events and situations.   With a good grazing system and a good drought plan, we can decide when to turn our cows into cash to conserve our grass.   As Bud Williams once said, “You will never go broke having too much money or too much grass – but going broke is easy if you have too many cattle at the wrong time.”   We have the ability to take control of these situations.

Hundreds of cow-calf producers lose an inordinate number of calves every year while calving.   To add insult to injury, these same producers work harder than anyone else trying to save those calves.   Apparently, they do not realize they have control of when they turn their bulls out.   There are very few environments in which winter calving makes sense.   Why do wild ruminates wait until May to have their babies?   Why are all calves born with a summer hair coat?   There is nothing more enjoyable and profitable than calving on green grass.

I am also willing to admit we have very little control over the markets and the prices we receive.   The only way to take control of the prices you receive is to get out of the commodity business and sell a product like grass-finished beef directly to the consumer.   Several PCC customers have been very successful at doing this.

Farmers and ranchers cannot do much about commodity prices.   Most will whine and complain – but that does no good.   Many will blame others for their problems – but that does no good.   So, what can you do?   If what you are doing now is not working, you need to do something different.   This is as obvious as the nose on your face – but most people will not change a thing until they are forced to.   By that time, it will be too late for many.

PROFIT  =  (Production  x  Market Value)  –  Expenses

Since we have no control over the markets, we need to focus our attention on increasing production and/or decreasing expenses.   When we talk about increasing production, we are referring to production per acre – NOTper animal.   Focusing on production per animal (bragging rights) will actually decrease production and profit per acre.   The status quo beef industry has been focused on the wrong thing for the last 50 years.

I know several producers who have increased pounds and profit per acre by 50 to well over 200 percent.   That’s HUGE!   These producers have implemented proper grazing management to make the most of every ray of sunshine and drop of rain that falls on the land they control.   They also produce smaller, more efficient cows that fit their environment – instead of artificially changing the environment to fit their cows.   This allows them to increase stocking rate and production per acre.   If they can do it, why can’t you?

The average cost of producing a calf has more than doubled in the last 20 years.   That makes it very difficult for most producers to make a decent living.   In contrast, most long-time PCC customers have a cost of production that is 40 to 50 percent less than the national average.   That’s an advantage of $350 to $450 per calf!   If they can do it, why can’t you?   The easiest money you will ever make is the money you don’t spend.

The reason the average age of cow-calf producers has increased so rapidly over the last 30 years is because the next generation, for the most part, is not coming back to the farm or ranch.   The reason the next generation is not coming back is because very few cow-calf operations are profitable, enjoyable and sustainable.   The reason very few cow-calf operations are profitable, enjoyable and sustainable is because most producers are unwilling to make the necessary changes in their operation.   It is easier to say, “Woe is me,” than to think outside the box they have put themselves in.   We encourage you to choose a different route.   You can do it – and we can help!

Quote Worth Re-Quoting –

“You are responsible for your own happiness and success.”   ~ Harvey Mackay

Marketing the Ranch

Marketing – The process of creating excitement about your product/service.
Sales – The process of actually selling your product/service.

Sales of the product on the Ranch – You have that figured out. Sales barns, video, and internet, they all get the job done very well with the largest number of potential buyers.

But – Marketing, that has been left up to the barns/video/internet sales facilitators. And how do they go about doing that. – The Sale Bill. The consignment list they post in publications and websites.

That’s IT!!!!!!

Why should you take an interest in “Marketing your Livestock”
Picture this – If there are 2 more bidders at the sale to BID on your livestock. 50,000 lbs at $1.10 = $55,000.
With 2 more bidders you could get say .05 +/- cents more?
50,000 lbs at $1.15 = $57,500.
$2500 More….

What can you do to “Market your Livestock”?
Website – $500 a year.
Print Media – $500 a year.
Social Media – $100 a year.

  • Take lots of pictures
  • Write down what you do.
  • Write down your genetics
  • Ad pictures to everything.

The more visual you are the more your pictures will sell your Calves.

Build upon the reputation that you already have.
By Investing $1.00 in your Marketing – You can get $2.00 back.

I can HELP – call 307.331.0357

If One Can Do It…

If One Can Do It…

By Kit Pharo

If I had a nickel for every time my long-time friend and mentor Chip Hines has said, “If one can do it, they all should be able to do it,” I would have a truckload of nickels.   In the 30+ years that I have known Chip, he has had a profound effect on me, on Pharo Cattle Company and on the entire beef industry.

Although Chip has an excellent understanding of the minute details of beef production, he likes to keep everything as simple as possible.   Nature has always been Chip’s example and teacher.   He thinks cows should be able to produce and reproduce without any outside inputs.   If one can do it, they all should be able to do it.

In the mid-1990s… we were giving our cows a protein supplement three times a week for 30 days prior to calving.   We did this because that is what we thought we had to do with cows grazing short, dormant grass all winter.   I remember a cow (Angel 382) who wouldn’t even look up when we came to feed the range cubes.   She continued to graze – even though all of the other cows were frantically running to the pickup.

This cow reminded me of what Chip had told me many times, “If one can do it, they all should be able to do it.”   I decided to eliminate all protein supplementation.   I remember one university expert advising me against taking such drastic actions.   He said, “We both know the protein level of your winter grass is very low.   According to the book, you need to supplement some protein.”   I nodded my head, but ignored his advice… and I got away with it.

Do you know why I was able to ignore his advice and get away with it?   I got away with it because not one of my cows had read the book the university guy was referring to.   They didn’t know any better.   Who wrote the book anyway?

I’m sure some cows eventually fell out of our herd after we discontinued providing a protein supplement.   Most of the cows, however, were not affected.   This is how you make genetic improvement and progress.   If you never take away inputs, you will never know which cows can survive without inputs.   Over the years, we have essentially eliminated all outside inputs with the exception of salt and mineral.   I know a few PCC customers who have eliminated mineral supplementation.

Recently, I have taken Chip’s “If one can do it…” statement to a different level.   I have thought about how successful and profitable most PCC customers are in comparison to their neighbors.

What’s the difference between PCC customers and their neighbors?   The primary difference is that PCC customers are focused on increasing production per acre, while their neighbors continue to be focused on increasing production per animal.   There is a BIG difference!   If some cow-calf producers can do it, others should be able to do it.

Quote Worth Re-Quoting –

“The men who succeed are the efficient few.   They are the few who have the ambition and the will power to develop themselves.”   ~ Robert Burton (1577 – 1640)

4 Points For Successful Outsourcing – A 5 Minute Mind Makeover

I’ve outsourced a LOT of copywriting jobs to my ace resource John Fancher.John is wicked good and he channels my inner voice like a pro. He’s doing a great job. But I can’t tell you how long I resisted that. And I can’t tell you how much time – and not just time, quality, optimum time of my day time – that I’ve freed for myself by forcing that evolution. Everyone in Planet Perry benefits.

Why did I resist that? Probably mostly cuz so many people said “Dang Perry you’re such a talented copywriter” that it had become my identity.

Dude, your job is NEVER your identity. Yeah, I know in English we say “What do you want to be when you grow up?” and your five year old says, “I want to be a policeman. I want to be a fireman.” But that is actually wrong. The guy who wears a uniform is not a policeman. He is a man whose job is police work. The fireman is not, at the identity level, a fireman.He is a human being who earns his bread by fighting fires.

Carol Dweck, author of the book Mindset, points out that when your kid gets an “A” on the test and you say “Krista you are really smart” then “really smart” becomes a part of her identity and now she thinks she has to live up to that all the time and if she doesn’t, she is a failure. And it actually becomes de-motivatingbecause smart is not what she is it is a gift that she has.

When your job becomes your identity you become unhealthily attached to it and you unwittingly build a prison for yourself. That’s why one of your top jobs in life is knowing thyself and getting clearer and clearer about the difference between who you are and what gifts you possess.

For most entrepreneurs, this means your natural role is STARTER NOT FINISHER. You don’t need to finish anythingyou start. You just need to make sure that others successfully finish it. Yeah, I know – that sounds a lot easier than it really is. Here’s a tool I picked up from Rob Berkeley and his Entrepreneur To CEO Mastermind with Victor Cheng – the Circle of Commitment:

1. Request – You tell someone what you want

2. Negotiation – You discuss what they can actually deliver, until you reach agreement

3. Performance – They do what they said they would do

4. Acceptance – You communicate to them that they did indeed do what they promised to do. If they did not do it, you go back to #1, #2 or #3 as necessary until they finish in an acceptable way.

Those of us with “High Quick Start, Low Follow Through” tendencies tend to rush through the Request and Negotiation part, not making it clear exactly what we want. I know I often completely skip the Acceptance part and never give appropriate feedback.

That’s why “outsourcing” can be such a mess.

If you start a project by defining “What feedback is going to come back to me? And what feedback am I going to give to others once the project is successfully completed?”, then you are set up for success. This is the practical version of Stephen Covey’s “Begin With The End In Mind.”

Replacing the Monkey –

By Kit Pharo

The PCC Discussion Group recently had a very interesting discussion that tied in very well with the “Woe is Me” article in last week’s PCC Update.   While most people know what they should do, very few actually follow through.   Why is that?   What prevents most people from making the changes they know they should make?  I will share a few high points from this discussion.

The discussion thread was started by Jim Gerrish, who is a world-renown grazing expert.   Jim discussed two clients he had worked with.   He helped one client double his carrying capacity and reduce hay feeding by 60% in just three years.   Since the infrastructure required to do this cost $36 per acre, this client essentially purchased another 8000-acre ranch for $36 per acre.   Rangeland in that area is currently selling for $1000 per acre.   That was a no-brainer.

Jim worked with another client who had a 30,000-acre ranch.   Jim said, “I am confident we can double the carrying capacity on this ranch similar to what we did on the other project.   Spread across the 30,000 acres, that is a stock water and fence infrastructure cost of less than $40 per acre.”   He went on to say, “That is the equivalent of buying another 30,000-acre ranch without closing costs, additional taxes, or all the other associated overheads for less than $40 per acre when the prevailing land cost in that area for similar rangeland is about $800 per acre.”   Although the client understood the possibilities, he decided not to go forward with the project.

Doug Ferguson, who lives in Nebraska and is a very active and outside-the-box contributor to the PCC Discussion Group, responded by saying, “Jim, I have spent several years studying the subconscious mind and paradigms – and how they affect our results.   I’ll try to condense what I have learned.”

Doug went on to say, “What you ran into with the second rancher is called the Terror Barrier.   He probably understood it, and gets it.   So, what is stopping him?   His old paradigm.   The old paradigm is what keeps us from doing what we know we should do.

“The second rancher has the knowledge and you gave him a simple plan to follow.   But then what I call the Monkey Mind kicks in.   The monkey represents the old paradigm – and that monkey talks a lot.   He’s going to put up one hell of a fight because he doesn’t want to be replaced by a different monkey.

“So, the monkey says things like: That’s a lot of money.   How are you going to pay that off?   What if there is a drought in a couple years and you have to destock?   What are you going to do then?   People will laugh at you because you spent all this money to increase stocking rate and you ended up destocking.   You’ll never be able to show your face in public again.

“The monkey may go a different route.   Fear of success: What if this works?   If your stocking rate doubles, where are you going to get the stock?   Can you afford to buy that many cows?   That’s a big risk putting all those dollars out there.”

Doug concluded this part of his discourse by saying, “The second producer was on board and fired up right until the monkey started talking.   Then he gets scared, hits the Terror Barrier and goes right back to his old paradigm – with results he is comfortable with.

“Paradigms are a multitude of habits.   Habits are hard to change.   That reminds me of a great quote that ties in with what Kit is always preaching, ‘In times of change, the learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists’”

It is not easy to replace the old monkey.   It is a bit scary and a lot uncomfortable.   Nevertheless, monkeys must be replaced every now and then if we want to achieve true happiness and success.

Quote Worth Re-Quoting –

“Let us not be content to wait and see what will happen, but give us the determination to make the right things happen.”   ~ Horace Mann

“The cure for boredom is curiosity.   There is no cure for curiosity.”   ~ Ellen Parr