Regenerative Ag Stories on the Grazing Grass Podcast

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0:00:00 - Cal
You're listening to the Grazing Grass Podcast, episode 107.

0:00:05 - Doug
If you, sell something you have to replace, otherwise you just had a liquidation.

0:00:10 - Cal
You're listening to the Grazing Grass Podcast, sharing information and stories of grass-based livestock production utilizing regenerative practices. I'm your host, Cal Hardage. You're growing more than grass. You're growing a healthier ecosystem to help your cattle thrive in their environment. You're growing your livelihood by increasing your carrying capacity and reducing your operating costs. You're growing stronger communities and a legacy to last generations. The grazing management decisions you make today impact everything from the soil beneath your feet to the community all around you. That's why the Noble Research Institute created their Essentials of Regenitive Grazing course to teach ranchers like you easy to follow techniques to quickly assess your forage, production and infrastructure capacity in order to begin grazing more efficiently. Together, they can help you grow not only a healthier operation, but a legacy that lasts. Learn more on their website at nobleorg. Slash grazing. It's n-o-b-l-e dot org. Forward slash grazing.

On today's show we have Doug Ferguson, Mr Cattlemaster. We discuss his farm and sell by marketing. He does have some classes coming up, but not until this fall and winter, so I'm sure you'll want to check those out. They're at his website, mrcattlemastercom. It's a wonderful conversation and I hope you enjoy it. Let's talk to Doug. Doug, we want to welcome you to the Grazing Grass podcast. We're excited, you're here today.

0:02:11 - Doug
Thanks for having me on Cal. I've listened to past episodes and I appreciate the opportunity.

0:02:18 - Cal
Thank you for listening. I appreciate that. To get started, Doug, can you tell us a little bit about yourself and your operation To get started.

0:02:26 - Doug
Doug, can you tell us a little bit about yourself and your operation? Sure, I grew up in southeast Nebraska family farm and it was a pretty conventional type deal Commercial cow-calf. Back then they used to finish all the calves take them to the Omaha stockyards. So I am barely old enough to remember the stockyards. When the stockyards closed they dad and grandpa actually just then went to backgrounding and they would sell the calves at a local sale barn when they hit 800 pounds, which later I come to figure out, meant we're going to sell the chores so that way we can go plant. And so there was also dry land row crop. So I'm also old enough to know what cultivator blight is.

But I did the 4-H thing growing up, like you know, a lot of kids, and I think that's where I really fell in love with cattle. Sometime, when I was about a sophomore in high school, I made up my mind that raising cattle is what I was going to do for a living. Only, you know how it is Cal. Everybody tells you, oh, you can't make a living doing it. You got to go to college to get a degree. Cattle or something you do on evenings and weekends right, that was the paradigm that was given to me. So I did go to college for a brief period of time. I met my best friend there, and that's an important thing to mention.

But I dropped out of college after a few semesters to focus more on riding bulls, and after I quit riding bulls I had a job in town and I quit that too. And this traveling partner that I mentioned I met in college. His dad called me, he owned a feed yard and he said we can buy cattle where you live cheaper than what we can buy them where we live, which was Northwest Iowa. He said would you be interested in going to the sale bar and buying cattle for us? And I'm like, yes, I would be more than happy to go, spend your money, make a commission doing it and drink coffee and tell lies all day, right.

And it came with a stipulation that I had to read this blog page. And the blog was written by Ann Barnhart, who was teaching the sell by marketing schools. So that's where I fell into sell by marketing. I was introduced to it at that time, so I'm a big believer in the law of attraction. And so here's what happened, cal when I made up my mind, when I was a sophomore in high school, that I was going to raise cattle for a living, I committed to that idea and I rejected everything else. Everybody was telling me that you couldn't do it. If you say it can't be done, I just won't listen to you. But I got to figure out a way. Sell-buy was that way, and so it was the sell-buy marketing which enabled me to start my operation from scratch, which stockers is my main focus. I do some breeding stock, but stockers is the main focal point. I started that deal with $7,000, turned it into a seven-figure business, all because of sell-by-mark. Oh wow. So that's a short version of the journey.

0:05:24 - Cal
So when you started reading that blog by Ann, did it just immediately click for you or take you a little bit?

0:05:31 - Doug
She wrote in a way that it would get you interested, but you didn't quite fully grasp what she was talking about. And the thing that was intriguing to me is it was nothing that I'd ever heard before. The thing that was intriguing to me is it was nothing that I'd ever heard before. If everybody else is telling me, oh, this doesn't work, why would I listen to them when she was writing? And oh, if you just do this, it works.

0:05:56 - Cal
Oh yeah.

0:05:57 - Doug
And I'll tell you, cal, at that point in my life the tuition for her school is $500. And at that point in my life that was the difference between buying propane to heat the house or going to a school. And y'all know the decision that I made. And, man, I tell you I don't regret that decision one bit.

0:06:19 - Cal
So you went to school, was that or her school? Was that when you had started buying cattle? For that, your friends?

0:06:29 - Doug
it was right around that time. Um, I'd say I probably was buying cattle for them for about a year and a half or maybe not even that long. But there were some other schools and they were in texas and places like that and I'm like, well, that just seemed like a bit of a ways to go and then she did a school in Kansas City, and Kansas City is three hours away from me.

You don't get any closer to me than KC. So that's the one that I went to, and that one was such an eye-opening experience. After that, whenever I decided if there was something that I wanted to learn and I could identify somebody that was really good at it, I didn't care how far I had to drive. That's where I was going. It was just that's just the price you got to pay.

0:07:21 - Cal
Let's talk about that for just a moment, because when you look at these prices of schools to go to, they can be pretty expensive. I know I'm debating some schools to go to and it's a thought pattern or that's quite a bit of money to go. Do I want to go? I want to go, but do I want to pay that much to go? There's lots of resources online. If I dedicate myself, can I just figure it out without going. Can you speak to that dilemma just a little bit?

0:07:52 - Doug
Yeah, and this is a question I get quite a bit, and I always have to think back to when I was on the other side of that table. 500 was a lot of money. Like I said, it was, either you buy propane or you go to the school. That's a heck of a decision to make and in the travel time you have to have assurances that it's worth it. And I think that's probably where I feel like, speaking from the other side of the table now, as a marketing school instructor, I feel like what I have been able to do with it lends that authenticity.

I have proven that the stuff that I teach works, because it's what I do in my business so I can give you like I can almost give you that guarantee. But you have to do the things in a certain way. It's not one of these things that if you're going to do sell by marketing, you're half in, half out. It's not something you just play around with or tip your toes in the water on the shallow end a little bit. It's like you have to do it. So there has to be a commitment from the people that come to the school as well, and that's where things get a little tougher, cal.

0:09:02 - Cal
So if you're going to school, you're spending a lot of money, you've got to be committed to following through. It's not going to happen by osmosis, you're not going just to absorb it and it's going to be the fix all miracle. But if you're going to have action items that if you go home and follow the plan, it can work for you.

0:09:23 - Doug
Exactly can.

0:09:29 - Cal
It can work for you, exactly, yeah. So what do you encourage those people?

0:09:32 - Doug
or what would you tell them? To tell their wives, to convince them. Oh, that one, okay, that one's a little bit tougher.

0:09:36 - Cal
That is a tougher one.

0:09:37 - Doug
Yes, when we set up our schools, when I say we this, my wife does all the behind the scenes work. My schools would not happen without her. And we set up a sliding fee scale for the purposes of families. And let's say, since you mentioned the wife and that other role, it's okay. The husband costs 750 bucks, the wife's tuition would be 500 because we're trying to encourage them to come along and I feel like it's a lot easier to probably bring her along to one of these schools than maybe to screw up and explain to her why you lost six figures in the cattle business.

This year oh yeah, you know, because then at least a lot of times when the wives see it, they're on board. Now on my Mr Cattlemaster Facebook page, I try to post testimonials every Tuesday. I get a lot of feedback, a lot of text messages every week, and the one that I posted this week, the guy's yeah, my wife is sick and tired of hearing about cattle squares, but we're making money. I'm like, yep, she'll get on board real soon.

0:10:44 - Cal
Oh yeah, Making money will help solve some of that issue it does. Yeah.

0:10:49 - Doug
It does.

0:10:51 - Cal
From the school you went to the school put on by Ann. Did you go home and implement this? You'd mentioned earlier $7,000 you got started with. Is that when you got started? I?

0:11:03 - Doug
started several years before I went to the school and I think I did it was. How do I explain this? It was very similar to sell by marketing, but I was doing the break even thing and our local sale barn had fat cattle auctions at the time so I would buy these little reject piece of crap type cattle I bought the junk nobody wanted because it was all I could afford.

And then I fed them until they were fat. So I owned them for a year and it was working really great. So what I did was is I was like, okay, fat cattle price is probably going to be this. And then, well, I know I'm not going to get that price, so I'd back it up a little bit. And then I'm like something else will happen price. So I'd back it up a little bit. And then I'm like something else will happen and my cost of gain won't be as cheap. So by the time I did all these Murphy's- law scenarios in this break even equation.

I mean, it left me to where I was buying the junk. So I was identifying the really undervalued cattle, but I didn't understand the relationships. So when I went to Ann's school and she explained all that, I could see the relationships.

0:12:06 - Cal
And.

0:12:07 - Doug
I feel like I should probably mention this Cal, because I get this question a lot. When I teach my schools, I start with what has gotten to be known as the psychology lesson, where I talk about paradigms, where we get them and how we have to change them. And people have asked me a lot of times how did I absorb sell by marketing so easily? I didn't have an existing paradigm.

0:12:29 - Cal
If everybody, was telling me oh, this way doesn't work.

0:12:32 - Doug
I didn't accept doing it that way, so I didn't have that existing paradigm. So I was really open to the idea, and so then, when I did go to Ann's school, I was able to come home and just implement it like a duct of water. It just felt so natural. And I also feel like I need to mention this story. I had a. There was a group, I think there was like roughly 40-some head of heifers in this group, and they were what I nicknamed like the diamond cutters. These are the cattle that can walk by the bunk and just throw on a pound just by getting within 10 feet of it.

They just so. If they're gaining weight like that, the cost of gain is really cheap. And oh, oh man, these cattle are doing really good. I can't sell them. I got to keep putting weight on them, right right there. I just failed the first lesson and I took them over one of those price cliffs where I actually held onto those cattle till they were undervalued and I did that just because they were doing so good.

So I missed that part of the concept and so I finally sold those heifers. I called Ann and I'm like, okay, I sold these heifers but I can't find a buyback. And she's like what were they? What'd they weigh? And I told her. She just starts screaming at me on the phone and I get everybody's listening to this on a podcast.

but to illustrate it, I'm holding the phone arm's length away from my ear and I can still hear her screaming and cussing at me, and so the market actually went down. Two weeks later, I got the buyback done and I never made that same mistake since. At that point. Then I realized, okay, it is up to me to do this, pay attention, make no excuses when the cattle are overvalued to sell them. And so I trade very aggressively and I think that's a big key to been a big key to my success.

0:14:25 - Cal
Before we we dive into that a little bit more, you're mainly a stocker operation. Now Do you go into the year with the plan that you're going to buy 400 pound calves and you're going to sell whatever weight calves stockers or fats later?

0:14:36 - Doug
No, no. And I had a conversation with a canadian earlier this week and got to be one of those conversations where, if you want to make god laugh, tell him your plan. And I had a plan. Monday cal, I went into our local auction and I'm like I need about two dozen head of these six weight males stairs, steers or bulls, didn't matter but I need maybe a gooseneck load of them to finish up another deal. And then I was going to start buying some heifers and I thought, okay, yeah, six weight heifers were really undervalued the week before, so that's probably where I'm going to land. Well, I tell you what there were two guys showed up this local sale and the prices that they were paying for six weight cattle were just absolutely stupid.

And the backup plan then would have been to buy four weights. The four weights they had in the offering weren't very good, so then it's okay. I get on my phone, got a network of people, call some buyers. What do you see in where you're at, buyers like I can get you a load of six weight heifers delivered for this price. So that's what I ended up doing. So my plan, all my plans I had that day, went right out the window in under an hour. I also I don't spend any time at the beginning of the year doing any type of cash flow projections. If I just stay with stockers, I could do it and probably be fairly accurate, just because I've been doing this for 20 years.

Right but a couple of years ago, on Sunday I had no intention of buying cows and on Monday I was one of the largest cow calf operators in the county I just have. I was sitting on the internet and I just kept hitting the click to bid buy button and kept calling the dispatcher tell him to send me another truck, clicked the bid buy button and kept calling the dispatcher telling him to send me another truck, doing things like that would have just totally blew my cash flow projection to pieces.

Oh yes, so I think probably the shorter answer to your question is I take what the market gives me.

0:16:30 - Cal
Right, have you found? So you've been doing this a number of years. How have you evolved over the years?

0:16:39 - Doug
That's a really deep question, Cal, no-transcript and I know after I went through the school it changed mine. You can see these price relationships exist and you can take advantage of those relationships. You can prosper yourself. And when I say prosper, we're generating positive cash flow. And you can do that no matter if the market is going up or down, because what the cattle square, this algebraic equation that we use to determine these relationships, shows us is the ratio of dollars to pounds on a trade. So, even though the market could be deflating so take 2015, for example. We had that big crash in the fall. I loved it. I even really enjoyed the COVID shutdown when that market had that meltdown right there for a couple months, I did some fantastic trades.

The cash flow was amazing. So these relationships show us how we can do that, no matter if the market's going up or down, and when you can do that, you can stay current on your bills, on things like that, and it really takes a huge weight. If you're in this business, you're an entrepreneur, and what I take when you're an entrepreneur, cal, as you already know, you are in the crap every day. Every problem comes right to your doorstep and you have to deal with it. There's none of this. That ain't my job.

0:18:18 - Cal
Go talk to this guy over here.

0:18:20 - Doug
It all lands on you. So sell-by helps alleviate some of those burdens. I got a testimonial from a guy in Kansas this year who he had to call cows due to the drought, and one of the things I talk about in school is don't just liquidate them. You know, let's do some trades, and so it was one of those. We're going to reduce weight, we're going to get rid of these 14, 1500 pound cows and we're going to buy these lightweight stocks so we can go head per head, but we can still have that reduction on. You know what I'm trying to say the pounds per acre or the cow, the little calves won't eat as much as the cows. That's what I'm trying to say.

And so he did that. Of course, then this summer the stocker market just skyrocketed, so he sold these calves for for big money. He sold them at the end of the summer when the breeding market was still in the summer slump. So he sold cows, went to stockers, sold stockers, went back to cows and he bought some fall calving animals, calved them, sold them as pairs, almost doubled his money. Oh yes, so right there, doing just several trades that he was pushed into doing because of the drought generated better cashflow than he's had on a lot of previous years, and he's doing it in the middle of a drought. Oh yeah, that guy is absolutely tickled right now.

0:19:48 - Cal
And how does what? Had he been doing some of that before? Or had he always been just running cows, and the drought forced his hand?

0:19:56 - Doug
this was. He was your very conventional type cow calf producer.

No, calved early in this time of year because we got to be done calving, before the corn planter rolls, and, and then we weaned calves after corn harvest is over, we background them and then we sell them and repeat, and the cow had 10 years to pay for herself, and then you sell her as a cold cow and keep a heifer in place. That was that kind of operations. You talk about a guy that shattered some paradigms. Oh yeah, oh my gosh, I mean in, like you mentioned the wife earlier. Yes, could you imagine what she was probably thinking? Oh yeah, this guy went to Nebraska, to this marketing school and he lost his mind, and of course then it turned out really well in the end, but that that had to have been extremely difficult for him to do those things, and I don't know if he'd have been able to do it if it wasn't because of the drought.

0:20:51 - Cal
Force his hand. Yeah, yeah, okay, just in transparency. Transparency what my dad and I do here. Dad's got a cow herd, I've got a cow herd, but we have traditionally ran cows and um, we start to have some of these conversations about maybe that's not the best use of our forages, our operation, but we've done it this way. And I say this and I hate even saying this because I like to think I read, I'm knowledgeable, I try things, I do stuff a little bit different than most people around here, but still, yeah, I'm calving out cows and dad's heard, and we've done it that way for years and we've talked about we may want to move to Stockers, we may want to do something else, but we haven't. And to the story you told, the drought is what pushed that person there.

0:21:45 - Doug
Yeah, you stir up some thoughts in my head, and that's the beauty of doing these things. I like doing things like this off the cuff because I feel like they're more organic for people to listen.

So I mentioned earlier, my family had commercial cow-calf. So one thing that my dad and I did was we had a buy-in program for me and so I had I don't know a handful of cows of my own, and what we did was is, every time a cow was culled, dad got the check for that cow and then we kept a heifer and it was mine.

0:22:24 - Cal
Oh yeah.

0:22:24 - Doug
I'm buying in, I'm paying expenses on these cows, but there was no cashflow because I was keeping heifers, so the only money I had from the cow herd was really from selling steers.

Oh yes, and so I had my stocker deal on the side and I was still working some off the farm day help type jobs fencing for a neighbor, driving a truck for a local contractor, things like that.

And when I finally got to the point that I think I owned somewhere around 85, 90% of the cow herd at the the time, I took a look at the business and I had enterprised it out. The cows were making money, the stockers were making money, but what I based the decision on to sell the cows cow was I was looking at the hours that I was putting in to each enterprise and I was putting less hours into the stockers and making money. And so, going back to the old paradigm of trading time for dollars, I was getting paid more per hour doing stockers. And so I talked to mom and dad and I'm like, hey, thinking about selling the cows and they're like you own most of them, do what you want. So I sold the cows For the next couple of years, years at just about every holiday. People were a little bit cold towards me on the family holidays they got a little bit cold towards me.

Come to find out later.

Everybody was pissed that I sold the cows even though I owned them, because if I was a part of the family operation which I don't consider myself to be a part of the family operation because I don't farm, I just do this cattle thing and they're all liquidated out I would be somewhere around the fifth or sixth generation on this place, so all those previous generations had owned cows and then I'm the jerk that sold them. Oh yeah, and so, like when you mentioned yeah, my dad and I have always done this and we've thought about this. There's some other things to think about there too. And what do they call that Tradition? I've seen this once, and I'm sure you've seen the meme too Tradition is peer pressure from dead people. I've experienced that man.

0:24:35 - Cal
I know what that's about. Yeah, yeah.

0:24:37 - Doug
But I'm not. It's just one of those things you got to be aware of and probably have that discussion oh yeah, yeah, very good point.

0:24:46 - Cal
I want to shift gears just a little bit. We're going to come back and talk more about sell by, but I'd be amiss not to talk about grazing management on the grazing grass podcast. So tell us about how you manage grazing. For one thing in particular you're bringing in different classes of livestock at different times. How's that affect your infrastructure and what you're doing?

0:25:12 - Doug
Okay, so I years ago I didn't own any pasture. Everything was leased and so I had the traditional lease that you can come on in May and you got to be off September, october In the fall. Through the winter months I have cattle in backgrounding pens. I got the feedlot style type operation.

I got the ground, hay, the silage. We do that kind of deal. Then in the spring I go back to grass with those set of calves that I have at that time and I like it, cal, because I'm not doing the same thing all the time, like right now. It's snowing here. I'm getting tired of fighting snow drifts and mud and cattle in the pens and I'm ready to get back out to grass by the end of the summer. I'm sick and tired of polywire. I'm ready to have chores every day so it fits my personality.

Now, I think, to get into your question. Everything was, what do you call it?

It was continuous grazed, everything was just set stock you turn this many pairs out and they're out there for this many months and that's just what it is. Pasture was a babysitting service for cattle, so that way you could go farm during the summer, and I had read books, so this kind of leads into your book question about rotational grazing. I didn't understand any of it. I felt like the authors didn't know anything more about it than I did, which was nothing. But I did finally bite the bullet. I did a little experiment one year with pigtails and poly wires and started moving some calves and so I put them through these. I call them groves, the little wood lots that you can't mow but you want them trampled down, put them in some waterways, and I absolutely thought pigtails and poly wires are the stupidest thing ever on the planet and I'm going to lose these calves and they're going to be out in the neighbor's cornfield and it's going to be an ugly insurance deal.

Oh yeah, it worked really well. The calves never got out. In fact, they really got in routine that when I backed the trailer up, they knew it was time to get on the trailer because we're going to go to someplace better, but that was the year I want to say. Maybe 2011 is when the Missouri river flooded really bad.

0:27:14 - Cal
So it was a good rain year here that year.

0:27:16 - Doug
So I saw this regrowth. Now I have different questions. I have different thoughts. I went back reread all those books.

0:27:25 - Cal
Oh, they meant something different to me this time, all of a sudden, the author got really brilliant.

0:27:30 - Doug
The second time reading it and I think it goes back to one of those deals. When you read it the second time, you see something in yourself or there's something inside yourself that wasn't there so you perceive the book differently. So then, 2012, when that drought hit here that year, just like it did everywhere else, I went in on pigtails and polywires on half of my pastures, on half of my pastures, and what I did that year was I thought oh, this is going to be so laborious moving all these posts and wires.

So I zigzagged wires over the entire pastures and left them, and so the cattle would be in this cell for a week and then in the next cell the other week. So now I have to interject this part the landlord was. He was really into ag chemicals. He was a farmer through and through.

He's got this big self-propelled sprayer and spray tanks on the back of the foiler. So he liked to go out there and drive around and spray and I think a lot of the traffic from those ATVs and sprayers damaged the grass more than what he was actually trying to help improve it With all those fences strung all over his place and no gates, because the real was the gate. There's no gates.

0:28:48 - Cal
Right.

0:28:48 - Doug
He didn't go out and spray. That year he was angry with me. Oh yes, but that year. Then, after that, I had figured some more things out. So I had to make the cell smaller and I had to get a K-line and a portable water tank and do some things like that. So that's what I did. So I made the cell smaller, more frequent rotation started piping water out there. The weeds went away, oh yes, the weeds went away. That herd effect and giving the pasture the difference between rest and recovery, we started growing more grass. Those bare spots started filling in, started growing.

And if there was one thing I really messed up is I should have took pictures and I should have documented. Oh yes, and the other neat thing is the landlords oh yes, and the other neat thing is the landlords one of them passed away now, but they really liked what I was doing because I combined all the cattle into two different herds, so I just graze in two big herds. So if I'm renting 160 acres from you and I rotate those cattle around 160 acres, then I get them out of there and I go to the next pasture. So then if your grandkids come over and want to go fishing, you don't have to worry about the cattle being out there, you don't have to worry about if I remembered to shut the gate.

The landlords loved it. I was in and out and then gone and out of their hair and here's your rent check. It was fantastic for everybody.

0:30:14 - Cal
Very good, I know, with some lease property I have. That's one thing they like because the hunters are coming in there and a year ago I had a poly braid up. It's only happened once, which I'm actually surprised. The hunter drove straight through it, popped my poly braid. They never even saw it. But by moving the cattle and keeping them bunched up over multiple properties it gives that opportunity for them to have access to that land. And to be honest, I have this 180 leased out to this family for hunting. They are up there all the time. There's always something they're up there for which works out good. It works out good for all of us. But they're either hunting for sheds, they're hunting for mushrooms, they're checking for wild hogs because they think they should. They are getting ready for deer hunting. Deer hunting is a whole process. They're up there a lot.

0:31:16 - Doug
Yeah, and you're not in the way.

0:31:18 - Cal
Yeah which is really nice. So you mentioned there K-Line and portable water. Do you have the K-Line irrigation system?

0:31:30 - Doug
No, I just use. I got hydrants.

0:31:33 - Cal
Oh, okay.

0:31:34 - Doug
So you're asking about the pods, right, yeah, the pods, yeah, no, so you're asking about the pods, right, yeah, the pods, yeah, no. I don't have the pods, it's just, basically I use the hose.

0:31:42 - Cal
Oh yeah.

0:31:43 - Doug
It pipes the water from the hydrant to where I set the tank and, as you and your listeners know, water is going to be your biggest challenge when you start running these poly wires, and so by being able to do that, I can get water. It's accessible anywhere on 160 acres. I've got enough K-line that I can connect together and then move that tank. So probably the biggest argument against what we do as grass farmers is from the conventional world is oh my gosh, that takes so much time to do that and you got to go move the cows. And but these are the same guys that will load a feed wagon and haul that out there. Like here in Southeast Nebraska and I'm sure it's the same where you live, cal they'll haul a bale six miles down the road to put out in this pasture on the grass. Okay, I just told you earlier that I feed cattle twice a day when they're in my pens. I know how long it takes to feed fill a feed wagon and feed them.

And then I got to go back at the end of the day, fill the feed wagon and feed them again. Believe me, it takes a lot less time to move a poly wire and a water line than it does to fill a feed wagon and feed cows twice to fill a feed wagon and feed cows twice.

0:32:56 - Cal
I agree, I talk to these farmers who they spend half their day going around to different pastures feeding hay, feeding cattle, checking cattle and I'm yeah, it doesn't take me as much time as you think it's going to take, but it's that paradigm shift because that's the way they've always done it. Yep, yeah, which is really difficult.

0:33:18 - Doug
And then, not to mention the added benefits of, like I said, I had one of those paradigm changes. Like I mentioned, there was nothing stupider than pigtails and polywires and now I think they're a pretty fantastic tool because when you use them like this year, we went through a drought and everybody's hauling hay and I'm just rotating cattle, like this year, we went through a drought and everybody's hauling hay and I'm just rotating cattle. That's the reason, cal, sometimes a lot of the reason guys like us have grass in years like this.

0:33:43 - Cal
Oh yeah.

0:33:44 - Doug
Yeah, so I had a big paradigm change there and I'll mention this to people. Sometimes they'll you know oh, you got to retrain, you got to train stalkers to that fence every year and they think it's going to be like some big, major catastrophe when I break them to the hot wire. I use the heavy what is it? The heavy poly braid, the really thick highly visible stuff they can see real easy and I make that thing hot like you'll see the spark fly.

0:34:18 - Cal
Yeah.

0:34:18 - Doug
And for the first couple, maybe the first two or three moves, that thing is hot and then I have a hard time actually getting them to cross it, like when I do move the spool back.

Yeah. So it isn't a matter of training them not to run through the fence. It's more of a matter of getting them to trust you that when I push you towards it it's not always going to bite you. It may not always be there. Then, once they get that figured out, they'll just hey, where are you going to roll that spool back? We're ready to move. Oh yeah, so training stockers to those poly wires isn't as hard as people make it out to be.

0:34:57 - Cal
I found any time I brought cattle in. Getting them used to hot wire is not too difficult. Now I do have one issue right now. I bought some horn cows, brought them in and I've got one that's hopping my fence and I just saw something the other day on Facebook and so the way I usually manage that is I just haul them back to town. I don't deal with hoppers, but I saw something on one of the groups the other day that talked about putting two poly wires about two foot apart just down and it messed because cattle's depth perception can be a little off. That'll cause them not to jump it. I'm about to try that and see if that solves her problem before she gets loaded up.

0:35:40 - Doug
I've heard that before too and I had a heifer here a few years ago. That was a jumper and I don't think she ever went through where I rolled the spool back. She always jumped the fence when we rotated. Even when I had five, six wire barbed wire fences, she jumped those. She would jump out of the pasture, be grazing on the roadside, ditch. My neighbors are all corn farmers so they see this cow out. She's like a six, seven-way heifer. She's out. They freak out. She's going to get in there and destroy, you know, all their irrigated corn in an afternoon you know yeah.

And I'll tell you, the funny thing about that heifer cow was they would freak out and I would be like, if they called me on their phone, I'd be like, are you on your side-by-side? And they're like, yeah, and I'm like, get out of your side-by-side, stand up. And the minute she would see them stand on the ground she'd jump back in.

0:36:33 - Cal
Like I really don't need to come put her back in. Oh yeah, that's funny, doug. Let's transition back to sell-by marketing, our overgragrazing section, where we take a deeper dive into something about your operation, and let's talk about sell-buy marketing. We covered on it just a little bit at the beginning, but just tell us what sell-buy marketing is.

0:36:54 - Doug
So, yeah, I've got two definitions and one of them the short one is it's a real-time cash flow reckoning, and one of them the short one, is it's a real-time cash flow reckoning. So what it means is we can see relationships in real time as they exist, and these algebraic equations that we use to determine whether or not an animal is over or undervalued. Those equations have to balance, and so that's the reckoning part. It means that everything's going to be accounted for, it's going to balance. The longer definition is it is a continuum of inventory, liquidation and replenishment, generating cashflow and profit. So, if I break that down, it has to be a continuum. If you sell something you have to replace, otherwise you just had a liquidation, sale and went out of business, right? So with the stockers, or fat cattle, it's pretty obvious you sell a stocker, you buy a stocker, you sell fats, you buy replacement stockers. If you are a cow-calf herd, that replacement animal can be the calf that the cow will give birth to next. So there's your replenishment.

0:37:55 - Cal
Oh yeah.

0:37:56 - Doug
Your continuum and your replenishment on that deal. So that definition is set in the way that it is. So it is a continuum of inventory liquidation. That's your sell and replenishment is your buy. The next part is generating cash flow. So when you sell something again, the sell is first. So when you sell something you generate cash flow, and then the final part of that definition and profit. So you capture your profit when you replace profit. So you capture your profit when you replace. The beauty of that is that buy, that replacement is the only thing we have control over as painful as this is for a lot of people and some of your listeners got to bear with me here for a second.

we think we try to create these markets and we add value to these animals and so if you're in the direct marketing business, you absolutely can do that. I'm talking about just the plain commodity cattle business here. So we're price takers and so we have no control over that. But what we do have control is on the buy. So you go back to like I was mentioning earlier this week at our local cattle auction. I knew I was getting skunked, but what those guys were willing to pay for cattle I was getting skunked. But what those guys were willing to pay for cattle I was getting skunked. So it's okay. The smartest thing for me to do is leave this sale with an empty trailer, tap into my network of buyers and let them go find something for me.

I exercised my control and in case anybody's curious how that ended up, I captured a pretty handsome profit. I'm pretty proud of myself this week.

0:39:24 - Cal
Oh, very good.

0:39:25 - Doug
That's the beauty of sell-by-marketing it gives us that control.

0:39:31 - Cal
When you're selling and then you've got to go back and buy something. What kind of time period are you looking at there?

0:39:38 - Doug
I would say this, and I'm going to give you two different answers we try to keep that window very narrow just so the market doesn't have a chance to move. So you're selling into the market and you're buying back in the same market, and so there's that. With buy-sell marketing, which is what most people tend to think of, I buy this animal, I hold it for a period of time, hope I sell it for more than I have in. It run a break even. Your exposure to risk is the time that you own the animal. With sell-by marketing, your exposure to risk is the time between the sell and the buy, and we can keep that window very narrow if we choose to do so. The other thing is we teach people to keep that window narrow. Right now is a perfect example. You sell a potload of cattle. That's $180,000. If you got $180,000 in the bank, you're probably pretty tempted to go buy something else, a new pickup or something.

So if you turn around and reinvest those dollars right away back in the cattle business.

0:40:38 - Cal
There's your inventory, liquidation and replenishment, the whole continuum thing and you bring up a good point and that that's always an issue. If the money's setting in the bank, it has a tendency to leave the bank one way or another yeah, so if you're not buying something to turn around later on, you may be buying something that's going to depreciate on you or whatever Earlier. You were identifying those overvalued animals, undervalued animals. How are you identifying them?

0:41:14 - Doug
So we have been taught, cal, that the way to run a profitable business is to keep our expenses low and as long as these animals worth more than we have in them, we can capture a positive gross market. The market goes up and down, so if the market goes down, we just blew the whole gross margin thing to pieces. If that's the only metric that we're going to use to look at Now the reason we need to know what our costs are is that cost that determines those relationships. The lower that your cost of production is, it is going to make more. It's going to provide an opportunity for more animals to be undervalued. The higher your cost is, it will start to disqualify a lot of animals as being undervalued.

That's the importance of cost. So in my marketing schools I have a slide that illustrates this and people we learn and we think we've all used a crowbar and so we know that if we want to use this pry bar and move something, that fulcrum, that pivot point, has to be closer to the thing that we're trying to move so that way we have more leverage to leverage right. That would be a low cost situation If we move that fulcrum away from the load and closer to where we're pulling on the bar, we don't have as much leverage.

0:42:36 - Cal
That's what managing cost does.

0:42:38 - Doug
Is it a low cost gives us more ability to buy back in a market because we have more leverage. That's probably about the best way that I can explain it. So keeping your costs low and then using these algebraic equations will spit out those relationships and it's all. Fourth, fifth grade level math oh yeah, anybody can do it.

0:43:00 - Cal
Level math oh yeah, anybody can do it, and where do you suggest them gaining more information about doing this?

0:43:09 - Doug
Obviously you're. That's a softball question. Yeah, go to mrcattlemastercom and I've got a school coming up in April. It's going to fill up here pretty soon and my wife and I are in discussions now. We got to set up some dates for later in 2024. So it'll probably be late summer, fall, winter. I can tell you right now, cal, we're not going to do any schools in the summer this year. We're going to take the summer off. Oh yeah.

0:43:34 - Cal
Now, do you typically do your schools in Nebraska or are they spread out further?

0:43:39 - Doug
We do. Most of them are right here in Beatrice, nebraska, where we live. I'm in the same boat, everybody else is. It's really hard for me to get children help and raising the kid.

And the kid's kind of a I don't know. I guess she's a big time basketball player. She plays on two, three different teams pretty much year round. We stay here for that. So when I do schools I actually feed cattle in the mornings like four o'clock and then I run into town I teach the school and after school's over then I run back to the farm and feed cattle again at night I don't sleep much when we're doing the schools but we do try to do one school on the road a year.

We've done schools in Oklahoma city, we've done some in other parts of Nebraska, deadwood, south Dakota. So we're trying to find a place to have a school this year somewhere on the road.

0:44:27 - Cal
No, very good. Before we move to the famous four questions, do you have anything else to add or that you would like to add?

0:44:36 - Doug
Probably going back to the question you asked where you can learn more about it, I do have a weekly market commentary called Doug's Market Intel on Beef Magazine's website and that's what I write about on. There is what I saw in the marketplace this week and kind of some thoughts and things that I'm seeing in sale barn, so that would be another good resource to learn about it. Otherwise, man, I'm ready to move on for your four questions.

0:45:01 - Cal
One question there how much or how often do you go to a sale barn?

0:45:06 - Doug
Not as often as I would like, and that's a good question you bring up. People think, oh man, if I'm going to do this, I've got to be in the sale barn all the time. No, you don't. You don't even have to go there If you don't like being in that environment. You need to forge a relationship with a good cattle buyer. I would go to auction six days a week if I could, just because I love it, but with the schools and being a dad and trying to raise cattle, I can't be there. So I'm going maybe about twice a week is all I do, and I can do really well just doing that. Now the other thing I feel like I have to mention, so that is clear to some of your listeners, because, like I think, state of Nevada only has two sale barns in the entire state.

I have a couple dozen of them within about an hour and a half of my place and I haven't even been to half of them. Oh yes, just when you have that many, you know you have two or three selling on the same day and you know I go to the barns where I feel like I can do the best.

0:46:02 - Cal
I know, for me, I love going to a cell barn. We went to a cell barn so much as a kid I'm taking right back there. Got to get a burger there, donuts on the way. It's just the way we go, do the cell barn? Yep, it's time for our famous four questions. Same four questions we ask of all of our guests. Our first question what is your favorite grazing grass related book or resource?

0:46:30 - Doug
I mentioned my relationship with the books earlier and Cal. I don't feel like I'm going to mention a book that previous guests already hasn't mentioned, but just touch back on it. Remember I said that when I reread those books the second time I saw something different in them. But I feel like probably the biggest influence that I had was from a Canadian grazer by the name of Neil Dennis, and some of the first grazing books that I read were the Allen Nation books, and wasn't he was from Mississippi. I read were the Allen Nation books and wasn't he was from Mississippi, wasn't he? Or somewhere down there. And I'm okay and I did the whole X paradigm thing, you know the existing paradigm of okay, yeah, this guy can do this in Mississippi, but you can't do that in Nebraska because it snows here, right?

0:47:15 - Cal
Yeah, so this Canadian, neil Dennis, gave a grazing speech.

0:47:18 - Doug
So this Canadian, neil Dennis, gave a grazing speech I don't know, it was probably like a six-hour deal that they put on here and he's showing pictures of these stocker cattle even grazing through the snow and he's moving these poly wires and he's doing all this stuff and I'm going oh crap If they can do it in Canada. I mean, he took all my excuses away. So I feel like being around somebody like him really took my excuses away, challenged my thinking process and it's like all right, we got to go try this.

0:47:53 - Cal
Yeah, that'll do that. Yeah, Our second question what is your favorite tool for the farm?

0:48:02 - Doug
Oh man, you even sent me the list of the four questions and I've heard previous podcasts. The four questions the favorite tool? First off, I don't like tools, because if I gotta use tools it usually means something's broke. But I would be so off balance cal if I didn't have my pocket knife with me oh yes, there go. And as bad as I hate to admit this being as anti-technology as I am, I think I'd be lost without my phone just because I can pull.

the other day when I told you I got skunked at that sale, the first thing I did was pull my phone out, log into DV auction and start watching cattle sales in a different state, right there on my phone.

0:48:42 - Cal
Oh yeah, it's amazing the power technology has when it works.

0:48:50 - Doug
There's a lot of other things that go with it, but yeah, I'd say probably those two things.

0:48:53 - Cal
Excellent selections there on your tools. I'm always excited to hear what people bring up as an important tool on their farm. Our third question what would you tell someone? Just getting started Thinking back, on.

0:49:11 - Doug
When I started, you got to know how to make money. Sell-by marketing can really help with the cash flow. The other thing I would probably say, cal and I talk about this in my marketing schools I used to challenge the paradigm when people would say you got to learn to think outside of the box. And so I'd say who says there's a box and why do you believe them? Now that I'm a little bit older, I realize there is a box, it's very real, and in this box we have 24 hours a day.

There's only so much money in the bank account, you have a network of people, you only have so much feed available and things like that. So if you learn how to manage inventory well, you get to bring more things into your box. So I would highly recommend you learn how to market animals and you learn how to manage inventory. The thing about sell-buy and I'll probably mention this right here is we can talk about grazing practices and genetics and all these other sexy things that people like to talk about and they always tie the word profit to them profitable genetics, profitable grazing practices but if you take those animals and you sell them and you do a lousy job marketing them and you sell them as undervalued animals. Those genetics and all that work you did grazing just flew right out the window.

0:50:40 - Cal
True, yes, yeah, marketing has a tremendous ability to affect the value that you get for an animal, absolutely and Doug. Where can others find out more about you?

0:50:55 - Doug
Yeah, so I've mentioned about everything out that I've got going out there. There's the Mr Cattlemaster Facebook page and then our website, mrcattlemastercom, and then the Doug's Market Intel on Beef Magazine's web page, and I might be jumping the gun here a little bit. I've got the emails in my inbox right now and so I've got to respond to those and get some stuff done. But I will probably start writing some articles in Stockman Grass Farmer coming up here in the near future.

0:51:28 - Cal
Oh, very good, Excellent. We'll put links to those resources that are available now on the show notes so someone will have an easy way to get there. Doug, really appreciate you coming on and sharing today.

0:51:44 - Doug
I appreciate the opportunity, Cal. Like I said, I've listened to the show and I enjoy what you're doing and not sure how much you're going to use what we have recorded. But yeah, I think there's a real need for podcasts on getting messages out there and exposing people to new and different ideas. So thanks for what you do, Cal.

0:52:01 - Cal
Thank you. I appreciate that. I really hope you enjoyed today's conversation. I know I did. Thank you for listening and if you found something useful, please share it. Share it on your social media. Tell your friends, get the word out about the podcast. Helps us grow.

If you happen to be a grass farmer and you'd like to share about your journey, go to grazinggrasscom and click on Be Our Guest. Fill out the form and I'll be in touch. We appreciate your support by sharing our episodes and telling your friends about it. You can also support our show by buying our merch. We get a little bit back from that. Another way to support the show is by becoming a Grazing Grass Insider. Grazing Grass Insiders enjoy bonus content, monthly Zooms and discounts. You can visit the website, grazinggrasscom, click on support and they'll have the links there. Also, if you haven't left us a review, please do. It really helps us, as people are searching for podcasts and I was just checking them and we do not have very many reviews for 2024. So if you haven't left us a review, please do. Until next time, keep on grazing grass.

Transcribed by https://podium.page