Market Closeout

What motivates us? What gives motivation to change?

by Troy Marshall, American Angus Association

If you were to ask me what group of people I want to surround myself with, it would unquestionably be cattlemen. To succeed in this business, you must have grit, integrity and passion — which are three of the traits I admire most. My best friends have always been cattlemen, obviously because we shared common interests, but also because you know cattlemen must have the capability to put the needs of others over their own. That is a great trait to have in a friend.

With that said, cattlemen in general tend to represent a unique mix. We are always looking to make incremental improvement in everything we do. We embrace constant change and evolution. Yet, we tend to be conservative in our outlook, and thus the willingness to change is often contained within the boundaries of doing things like we have always done them. The two create a unique paradox of simultaneously embracing both tradition and change. It is our greatest strength and our greatest weakness.

This dichotomy is clearly defined when it comes to marketing our cattle. Tradition dictates we market our calves in a commodity marketplace where little differentiation of our product occurs. Tradition also dictates that marketing is a low-priority item for ranchers. It is so low, in fact, that cattlemen tend to turn our marketing over to someone else.

We have a commodity mindset when it comes to marketing — risk management and timing tends to be the focus rather than creating value. Trying to pick marketing windows and reducing risk certainly has value. They can affect one’s bottom line over time, but they ignore the basic tenets of marketing, which are focused on differentiation, creating value and letting the world know. We hold an almost religious devotion to competitive bidding, which certainly has its benefits. Yet we almost wear our refusal to engage in traditional marketing as a badge of honor.

Here is one of the great ironies of our industry. Marketing offers one of the highest rates of return that we experience in the industry. For example, our data show that people who enroll in the AngusLink^SM program on average see a return on their money of 10-fold to 20-fold. Time spent on marketing our cattle tends to be some of the highest-return hours we spend, but marketing also tends to fall into the “important but not urgent” category.

We might only get paid $15 per hour to run the feedtruck and $150 per hour to market, but the feed truck has to be run. The Genetic Merit Scorecard^® is offered free of charge to those with Angus sires. The only cost is an electronic identification (EID). Logic would say that virtually everyone should be doing it, but the data also show most producers elect not to enroll their calves.

I think part of that hesitance is that we don’t feel in control of our marketing. You know the feeling. You are planning to sell your calves day after tomorrow, and the board is down, your banker is acting nervous, and your wife needs a new vehicle. We know that marketing has a big effect on our business and our bottom line. But, unlike other parts of our management program, it is hard to see a direct cause and effect. It is a feeling that you don’t have control over some of the most important things affecting your business and your bottom line. Not being able to sleep through the night is not the way it should be.

The AngusLink program believes that you should have confidence in your marketing strategy, and that when you provide the right genetics and management, you should get paid for it. It is almost unbelievable to think the biggest decisions we make tend to happen in short windows.

I’ve heard it said the two activities that have the biggest effect on the future success of an operation are (1) the purchase of genetics you are going to put into your herd and (2) the day you sell your calves. In both instances, if the cattle are going through the sale ring, your success is determined in a matter of about 30 seconds. If the two biggest determinants of profitability occur in a couple less-than-a-minute windows, the No. 1 thing you can do is have a game plan. Have your homework done prior to those 30-second windows.

In reality, that is what AngusLink was created for. It was to help cattlemen prepare for those 30 seconds, and to give them the tools to make those 30 seconds truly enjoyable.

Editor’s note: Troy Marshall is the director of commercial industry relations for the American Angus Association.

Angus Proud

In this Angus Proud series, Editorial Intern Jessica Wesson provides insights into how producers across the country use Angus genetics in their respective environments.

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Angus Proud: Scott Sproul

Oklahoma operation learned wisdom of moving calving season to better suit their marketing needs.

Angus Proud: Bubba Crosby

Fall-calving Georgia herd uses quality and co-ops to market calves.

Angus Proud: Jim Moore

Arkansas operation retains ownership through feeding and values carcass data.

Angus Proud: Stephen Shiner

Idaho operation rotates pastures in summer and raises crops for winter.

Angus Proud: Les Shaw

South Dakota operation manages winter with preparation and bull selection.

Angus Proud: Jeremy Stevens

Nebraska operation is self-sufficient for feedstuffs despite sandy soil.

Angus Proud: Dave Rutan

Angus breeder gets the most out of his bull investment by partnering with opposite calving-season operation.

Angus Proud: Nickey Smith

AngusLink helps Louisiana cattleman gain more for his calves.