Category: Marketing

Is Average Good Enough for You?

Kit Pharo – Pharo Cattle Company

As silly as it sounds, average is good enough for most cow-calf producers.   In agriculture, average is breakeven.   Below average producers are losing money.   The only way they can stay in business is to subsidize the farm or ranch with outside income.   Above average producers are profitable.   A few are extremely profitable.   They are profitable because they do things differently from status quo (average) producers.   They have a distinct competitive advantage.

Most PCC Customers are well above average.   Many have doubled or tripled their profits.   They are focused on production per acre – instead of production per cow (bragging rights).   They are using ultra-low-maintenance bulls – instead of the status quo, high-maintenance bulls everyone else is using.   They know stocking rate affects profitability, or lack thereof, more than anything else.

Ag economist Danny Klinefelter explains how you can get a competitive edge simply by rejecting the status quo.   That’s right… by rejecting the status quo!   Klinefelter says, “The only truly sustainable competitive advantage today is the ability to learn and adapt faster than your competition.”   Click on the link below to listen to what he has to say.

Reject the Status Quo

Following the crowd and doing what everyone else is doing is never the best way to manage a business.   In most cases, it is the absolute worst way to manage a business.   If you are part of the status quo herd, you will never be above average – and you will never have a competitive advantage.   Dare to be different.   Dare to be a Herd Quitter.

Quote Worth Re-Quoting –

“If you don’t have a competitive advantage, don’t try to compete.”   ~ Jack Welch

Learning in Tough Times

Learning in Tough Times

Posted August 23rd, 2009 — Filed in Bud’s Musings

If you are a person who likes to learn or needs to learn, these last two years should have been wonderful.  The next two years may be even better.  We can’t change the world but we can learn how to live and do business in it better.

We are going through a time period now that has a chance to educate a lot of people. Maybe that should be, a chance to relearn some things that have been forgotten or ignored. People go to a University and pay a lot of money for the possibility of learning something. Now we have a situation where very large to very small businesses also have the possibility to learn something. This may cost a lot more than going to the University but there is the potential to learn some things that will have a lot more value.

Some of our largest companies forgot or never knew the most basic things of good business practices.  They did things that never should have been done. Now they get to pay for the education.  Did they learn, or do they just get to pay for it?  We have many small businesses that did the same things, it just may not cost them as much.  The education might cost less but it could be just as valuable. Individuals also had a chance to get a good education with possibly very little cost.

Everyone should have learned something about debt or borrowing money. Most of the time the people that loan money expect it to be paid back and with something they call “interest” added on.  “It is easier to borrow money when prices are high than it is to pay it back when prices are low.” These are good things to know.

Something else that is good to know is that “When it is easy to borrow money to expand the business other people are also expanding.”  Another good thing to learn is “When things are good and everybody is expanding their businesses it is possible that there may be some over production.”  Here is another good lesson “Over producing tends to bring low prices and it may be hard to pay the debt off with low prices.”

Maybe when business is good we should save money instead of borrow more. Then when prices go down we would have money instead of owe money. When we decide to expand it should be with some of our money, maybe not all, but some.

Invest money in things you know something about or invest very little and then only money you already have. Buy things you have the money to pay for.  If you don’t have enough money to pay then buy less or smaller. To save money takes very little effort and you don’t have to spend money to save, it also can make money. Learn to save and how to make money not just how to spend. To make money takes effort and you may have to spend money to gain or hope to make money, just try to spend money that you have.

The large and small companies that had and are having financial problems had people that were well educated at our finest educational centers. They had all the newest equipment and technology  to work with, yet they had these problems. Most of their education or at least what they learned was how to spend money, when they should have been learning how to make and then save money.

This is what we should learn from this problem that “emotion is trying to make bigger than it is.”  Develop as much skill at your job or business as you can then learn how to make, save, and manage money, not just how to spend it. It’s not necessary to own half the world by the time you are 21 years old. Learn and really understand what you want to accomplish, then start doing things as properly as possible. Then you can really own what you have not just have payments to make on something that might be gone with the first little down turn in the economy.  Things are so good now that it is easy to get over extended.  Because of spending money that people didn’t have, they say things are bad. The only thing bad is the people who keep telling us how difficult things are.

When things are like this there is opportunity everywhere. If we lose money, a job, a business,  the knowledge we gained should have been worth more than the money, job, or business was worth. That will make it easier to get started and be more successful than before. Or we can learn nothing because of complaining and feeling sorry for ourselves. If we lose a business it must have had very little value or it could have been sold for a large amount and everything would still be alright. Sometimes to lose a business that has very little value can actually be a good thing, then we can start over and do things better and have a business that is worth a great deal. If we lose a job it is the same thing, we should have learned enough that a new and better job is easy to find.

Learn all you can, these next few years should be fun, just like the last fifty have been. After all, we get to decide how good or bad they are.  I’ve decided that they are good, that’s why I can        Smile and Mean it.

EMOTIONS ARE REAL: MANAGING THE EMOTIONAL REALITY OF TRADING

The market is an auction. The purpose of an auction is twofold: to provide an environment where buyers and sellers can come together; and to provide price discovery. If a farmer retires and you go to the estate auction, there is one seller—and the more people who show up, the more potential buyers you have. Every buyer has a number and the ability to bid what they are willing to pay. The auctioneer facilitates the discovery of price for each good. The auctioneer is operating as an agent on behalf of the seller—they are trying to get as much out of each item as possible. Good auctioneers get lots of people to show up and they also get people bidding.

This is an important analogy to be able to apply to the world of commodity and equity trading. If you’ve ever been the person at the auction to pay way too much for something, you know that emotions can get the best of you in the moment. But the fact is that over time, an auction is the most effective and most efficient way to discover the value of something. That being said, in the short-term auctions can be overrun with emotion. You may see something selling way too cheap—which indicates there is a lack of buyers or more likely too many sellers. The flip side is when you see someone paying more for an item on auction than they would have paid to buy a new one at retail! Auctions are the best price discovery over time, but emotion will get them out of whack in the short-term.

Just like an auction, the market is made up of the emotion of its participants

  • Regret: Quite paralyzing. The price of the commodity gets to a level that isn’t quite what we were hoping for and then it suddenly falls. At that moment we now know what we COULD have had for our commodity if we had acted…but we didn’t. Now suddenly our brain shifts into what we think the product should be worth or what we would be willing to accept. But in reality, the commodity is worth what it is trading for today. The best antidote is drafting a script for our future actions: “What will I do when price starts falling?”
  • Greed: This usually plays out in the market as a case of “Perpetual Price Dissatisfaction.” If corn is $3.60, it’s wanting $3.80. When corn gets to $3.80, I now will only accept $4.00. It’s a failure pattern of saying to ourselves that UNTIL I get a higher price, I won’t be happy. The failure of this is that it’s never a high enough price for us to be satisfied. We end up kicking the can down the road until we’ve run out of time on the calendar and we now have to act. How can we counteract greed? One way is to make smaller decisions, more frequently instead. The other tool can be using targets. If I have a good handle on either my projected profitability or, after harvest, my actual profitability—I can reduce my greed factor by using price targets and placing orders at the elevator or in my commodity account. It takes out the risk of wanting to wait until tomorrow to see how price acts and get just a little bit more.
  • Fear: Can be a significant motivator for people. There’s a concept that has grown with social media and contributed to a lot of people’s anxiety—“FOMO” or Fear Of Missing Out. In marketing, fear manifests itself in many different ways: Fear that price is going to collapse further, so I end up selling out on the lows. Fear that I’m not going to grow a crop so I don’t sell ahead. Fear that if I sell, the price will rally later so I freeze. Fear that price can never rally so I sell everything on the first 10-cent rally I get. The key to managing fear is first and foremost to know yourself. Fear is a good thing and it’s a survival mechanism, but taken too far it can keep us from really being able to thrive.
  • Envy: We stop at the coffee shop and someone’s talking about how they sold the high in the market. We hear our neighbor talk about how high one of their fields yielded. Here’s the problem with all of these scenarios: none of them shares all the information you need. The guy in the coffee shop sold one percent of his crop on the high and at the end of the year, ended up getting a worse price on his crop than you. The neighbor with the big yield isn’t talking about his break-even levels or the profitability per bushel. We feel envious of the actions or lives of others, but much of what is presented to the world is far from the whole story. So what can we do? Tend to your own garden first. The farmers who focus on the basics (doing everything you can to lower your cost per bushel) are best equipped to compete in the long run. This gets the focus on a scorecard that fits the game. If I go to the gym and see the guy bench pressing 400 pounds, I’m not envious—we’re playing a different game. Focus on good financials and a fanatical approach to building your own ability to improve your cost per bushel. That doesn’t mean you shouldn’t try to learn from these others—you can ask the guy at the coffee shop what led him to price it; maybe there is some insight there. The neighbor with the big yield, maybe he has a production practice that you can learn from. But stopping at envy will always be a roadblock to progress.

Thanks for listening! Email me any questions or comments at dean@modernfarmbusiness.com.

Kate Miller: I Will Not Thank a Farmer

MARCH 8, 2019 12:39 PM

By AgWeb Guest Editor
AgWeb

Note: The opinions expressed in this commentary are those of Kate Miller, and do not necessarily represent the views of RanchersEdge.com

I was dining alone at my favorite local Mexican restaurant. I was covered in mud because it hasn’t stopped raining in Arkansas since October. I was freezing because the heater quit working in the tractor mysteriously, and I misplaced the bungee cord that closes the farm truck door. As I was scrolling through social media, I could identify with the numerous posts from ranchers I saw who begrudgingly were fighting the elements, be it blizzards and record setting temperatures or this never-ending monsoon and mud in the south. There were multiple posts about “thanking a farmer.” After spending months, tied to a tractor and sick calves and worrying about weather, I could identify with wholly that sentiment.

Having finished my beef fajitas, I noticed a sign the owner had placed at the register. It read: “Please accept our sincere thanks for letting us serve you. We greatly appreciate the fact you have chosen to do business with us. And in return, we pledge our continuing efforts to offer you the best service possible”

It struck a nerve.

The owner of this establishment did not demand that I thank him for his efforts to produce this dinner. He thanked me for choosing to do business with him.

In my mind, I scrolled through the Twitter feed I had witnessed. For how long have we as the ag community demanded that our customers thank us? When was the last time we thanked them? Are we operating from a place of entitlement, where we believe that our professions are somehow sacrosanct in the scheme of the economic ecosystem?

But wait, we toil in the hot summer sun and the cold winter snow—every single day. Yes, but so do the oil derrick hands in Odessa, Texas. But we cannot skip a day because living beings rely on us. Yes, doctors face the same challenge. We work 24/7 and never get a day off—no one just gives me a salary! Yes, so do most entrepreneurs. Yes, but we are underpaid! Said everyone the whole world over.

Even within the industry, other segments of our own business do not take to the Twittersphere and demand praise and thanks. When was the last time you saw any one who worked in a plant demand to be thanked for the 12-hour shift on the debone line?

What is abjectly worse is that by our own admissions we feel that we farmers and ranchers are the most important members of the value chain—we criticize packers for their margins. We pay the vet bill, eventually. We mock consumers for their ignorance and again for the demands they make upon us. And then we turn around and have the audacity to ask everyone to thank us?

When was the last time we showed any appreciation to anyone who chose to do business with us? When was the last time we thanked a feeder or a packer or a distributor or a grocer?

By our own standards–if we are going to thank the farmer, we need to thank the pen rider who doctors sick cattle in heat and blizzards, right? We need to thank the veterinarian who amassed six-figure student loans to answer your call at 2 am because you can’t get one pulled. We need to thank the immigrant who feeds his family by spending 6 days a week surrounded by death, cutting the jugular of 1000 head a day. We need to thank the USDA inspector who earned a master’s degree to work in below freezing temperatures, who worries if another government shutdown will impede her salary.

We need to thank the line supervisor who can speak broken Spanish and Swahili and Burmese to make sure the job gets done right. What about thanking those same production line workers who do the same repetitive cut day after day after day? We need to thank the blast freezer fork lift operator who works alone at sub-zero every day of the year. We need to thank the truck driver who misses his son’s first t-ball game on a run to Amarillo. We need to thank the sales manager who takes the cussing from a chef and loses his bonus because of a rotten injection site lesion in a round because a rancher ignored Beef Quality Assurance (BQA). We need to thank the sales rep whose paycheck depends on the yield of brisket from week to week.  We need to thank every single person who touches our product once it leaves our farms. We need to thank them for the work they do that makes our livelihood possible.

But mostly, we need to thank our customers. We need to thank the people who buy our product, who put their faith in the chain and decide to buy beef to serve their families. We need to thank a chef for serving beef in their restaurants. Instead of asking them to thank us for arguably doing our job, we need to thank them for giving the product we raise value. Without the customer putting beef in their shopping cart or without someone choosing as steak on a restaurant menu, we would cease to exist.

But the reality is as well without the pen rider, the vet, the packer, the line worker, the truck driver, the salesman, the marketer, the grocer—we would cease to exist as well. Cattlemen are a link in the chain, and some of us can argue that we are the endangered species in the ecosystem. (But anyone trying to hire an experienced meat cutter or a driver might argue differently.) The best way to preserve our way of life, the best way to ensure that cattle remain in our pastures is to make sure that beef remains on tables of consumers.

Everything else is noise. Everything else is shouting into the void. We can disagree on Checkoffs. We can disagree on Country of Origin Labeling. We can disagree on BQA. But at the end of the day—without the consumer—none of that matters.

I urge those of you who use social media to interface with the world at large to stop demanding that consumers heap thanks upon you. Instead take a moment to listen to their questions, to answer them without condescension or reproach, and then thank them for the opportunity to tell your story. Then thank them for their patronage, ask them how you can help them have a better beef experience and be a representative of your commodity. Check your entitlement. Start a dialogue. You never know, you might find that by extending grace to the community that supports you—you’ll find the appreciation that you seek.

Bio: Kate Miller is the managing partner for IMB Cattle Company, a third-generation ranch in Southern Arkansas which just celebrated its 51st anniversary. With over ten years in protein marketing including domestic and export sales, Kate continues to try and bridge the ever-widening gap between production agriculturalist, the food production industry and consumers.

RMC’S TEN FUNDAMENTAL TRUTHS OF SUSTAINABLE RANCHING

  1. TRANSFORMING your businessBEGINS WITHTRANSFORMING yourself

    Transforming your ranch into an effective business involves changes in land management, animal husbandry, money management and in the way you interact with the people in your business. But the biggest change isn’t to the land or the animals. The biggest change is in you.

  2. IT ISN’T SUSTAINABLEif it isn’t  PROFITABLE

    Profit is to business as breathing is to life. A ranch that doesn’t produce an economic profit isn’t a business. It’s a hobby … an expensive hobby.

  3. FOCUS ON effectivenessNOT EFFICIENCY

    Efficiency and effectiveness are not the same thing. It doesn’t do any good to do things right if you are doing the wrong things! If something is efficient, but not effective, stop it immediately!

  4. GET IN SYNCHwith nature

    Most ranch businesses are structured to fight nature. That’s expensive and exhausting. Businesses that match enterprises and production schedules to nature’s cycles are more profitable, less work and more fun!

  5. YOU DON’T GET harmonyWHEN EVERYONE SINGS THE SAME NOTE

    In any business, especially family businesses, there are bound to be differences of opinion. Our decisions are improved when we bring different perspectives and ideas to the table and engage in constructive debate, as long as we agree that, at the end of the day, we all ride for the brand.

  6. WORK LESSand  make more

    Unsustainable effort is unsustainable. Period! Planning is the key to simplifying enterprises, increasing profit and reducing labor.

  7. RANCHINGis a business

    We often act as though we have a choice between ranching as a lifestyle or a business. The lifestyle of ranching improves when the ranch is a successful business first.

  8. WORK ON YOUR BUSINESStwo mornings a week

    It’s not enough to work IN your business, you must work ON your business.

  9. WEALTHY on the balance sheet& BROKE AT THE BANK

    The misallocation of capital is the biggest financial problem in ranching. At the Ranching For Profit School you’ll learn how to capitalize and concessionize assets to increase profit and improve the financial health of your business.

  10. RANCHING FOR PROFITis NOT an oxymoron

    Many ranchers seem to think that profit is dictated by prices and weather…two things beyond our direct control. Ranching for Profit graduates prove every year that the key to profit is management.

The Language You Need to Be Using in Your Marketing

By   /  September 10, 2018  /

You’re Not Selling What You Think You’re Selling…

Most farmers think they sell grass-fed beef, or raw milk, organic chicken or fresh flowers.

But when it comes to marketing, that language won’t help you stand out.

It looks just like your competitor!

What you’re selling is a solution to your customer’s problems.

You’re selling ‘that thing’ your product does for your customers — the reason they buy it.

For Example….

If I Google “Grass-fed beef near me” I find things like this:

“Beef — 100% grass fed and grass finished. Versatile Dexter breed. Call to purchase”

…or, “We raise our cattle on pasture that’s been fortified with minerals that most soil is lacking. The cows are rotated to fresh grass every 24 hours and they are never fed any grain.”

Unless you’re a farmer and you know this lingo, your eyes have glazed over and you’re ready to click on Facebook for something more entertaining.

But you stumble on my farm’s website and read through everything, finally landing on my Products Page where I describe what I sell.

You read, “Ground Beef: Easily the most versatile product we provide — you should always have plenty to spare for those nights you feel totally and completely uninspired and have no intention of getting there. Grill it, loaf it, fry it up with some kale and sweet potatoes for the ultimate Paleo dinner without much effort.”

And then, “Pastured Chicken: The ultimate in buying bulk, one of our chickens will feed your family for two nights with the effort of only one.  Roasted chicken the first night, lettuce wraps, enchiladas, or soup the next.  You’ll have enough time on the “leftovers” day to schedule that pedicure your toes are desperate for.  And the family still eats!”

In this case, I’m NOT selling Ground Beef and Pastured Chicken.

I’m selling the solution my product offers: quick, easy, healthy meals that any busy mom can make.

How do I know what my product does for people?  

I ask them!

When I ask you what you sell, I don’t want to hear that you sell grass-fed beef. I can run down the street to my local grocery store and find grass fed beef, so there’s no reason to drive out of my way to buy from you.

But if you sell a way to get a super healthy dinner on the table fast…or a way to feed their adopted baby formula when they can’t nurse… you are selling so much more than the products you raise.

You are selling a solution your customers are desperate for!

Since this may be a new concept for you, I’ve created an email template for you with the exact questions you can ask your customers to help you discover what your products do for them. Once they respond, you can use their words to market your product to all your other ideal customers.

You can download the email template here. You’ll also find a video I did about how other farmers are using this knowledge and language in their marketing and how they’re attracting new customers because of it. The video is only available for a limited time, so if you’re interested be sure to head on over!

In today’s world, where everyone is looking online for solutions to their struggles and help reaching their goals, you need to make sure your words on your website, your Facebook page, and your Instagram posts, are all connecting with your potential customers in this way.

So, if you’re ready to stand out from every other farmer, grocery store and home delivery meal service, check out the email template and video, and let’s get started.

As always, thanks for being here

UNL Cow-Q-Lator

An Excel worksheet with Examples comparing the cost of TDN and Crude Protein in different feeds considering transportation and handling costs with losses. It also calculates the feed needed and total cost given herd size and days fed.

This is the Goto software that will give you the Best idea on using your available resources to combine them – Making sure your Livestock are getting the right balance in their DIET – while keeping your costs Low.

Click Here for Link to Cow-Q-Latro