Doug Ferguson: Don’t Ignore This Hidden Cattle Market Signal! (Ep. 357)

There's a guy that'll come into my hometown cell bar, and they open up the gate and they run this group of cattle in.
He judges the size of them.
Oh, I'm interested in these, and he leans forward.
And then they put the weight up on the screen, and he's like, oh, these are too heavy.
But if they get that weight up on the screen, his foot starts tapping.
You just projected a ton of nervous energy.
If somebody that looks suspiciously a lot like me sees nervous energy, I'm going to run you just for the fun of it, for the sport.
Now, I'm not going to say things like that to try to scare people, but some people think the cell barn's a snake pit.
I made it my job to become the most venomous snake in the pit, so I studied the body language.
I'll study how the tickets come in across the counter.
Do they come in through the gate?
Do they come in through the back window?
Why is there a difference?
I'm watching the body language of the ring, man.
I'm watching the other buyers.
I've kind of made it my job to study a lot of that stuff, and I don't know that very many people have taken the time to do that.
Hello, hello, hello, and welcome back to the podcast.
Thank you very much for being here.
All right, you guys.
Special occasion today.
Doug is in person.
I suppose I should introduce him.
If you don't know him, I don't know why.
Doug Ferguson is the owner of Mr. Cattle Master.
He does sell-by marketing, and he teaches sell-by marketing, and he was in town today for a sell-by marketing class, so I'm excited.
He made a stop to record a podcast.
Thanks for coming.
It's good to see you again, Mary Jo.
Yeah.
Think the world's ready for this?
You're dreaming, fashion, my energy?
But I'm probably going to have to be the responsible one and put a governor.
We'll see who's responsible.
We'll see.
That's good.
You just took the pressure off.
I appreciate that.
Yeah, you know, we don't have a time limit.
We'll see when we stop.
Sure, we do.
Suffer time.
Yeah, we do.
It's Scott's birthday today, so we have to go to supper.
But outside of that, we're good to go.
I know you've been on a couple other podcasts.
I took the sell-by marketing class last year when you were in Bismarck, and so I really
am hoping to ask you some questions nobody else has asked you because, you know, if they
want to hear that, my opinion is just go listen.
Like, if you want to hear what Wealthy Cowboy had to say, go listen to Wealthy Cowboy.
So some of it's going to maybe be a repeat, but I would like to kind of get into some stuff
that maybe we haven't gotten into or you haven't gotten into before.
Just some myths or some questions I get about sell-by marketing.
Not that I'm a pro.
After one class, I never bought any cows after the class, but I still think that there is
probably a lot of questions that people aren't asking you because they're not being asked
those questions all the time.
The first one I'd like to know, why sell-by marketing?
What got you started?
What got me started, and you're going all the way back to the beginning here, but I got
a job as an order buyer for a friend's dad.
And one of the stipulations that he had was I had to start reading this market commentary.
And that market commentary was something like I'd never heard before.
And if you take it back even further, when I was a kid, you know, it's a labor of love.
Never be able to make a living doing this.
Go to school.
Get the J-O-B with the benefits and blah, blah, blah.
And I'm like, baloney.
Got an $80 billion a year business.
Billion dollar a year industry.
You're telling me we're all in this for giggles.
Like there's somebody's got to have something figured out how to make money.
So I knew that answer had to be out there.
And then there it was in this market commentary trying to hit me in the face, but I was too
lazy to get on the dial-up internet and read it.
So one night I delivered a load of cattle to that feed yard.
And this is like after midnight.
I get there and they're like, you reading that market commentary?
And I said, no.
So I go to their office and they get on their dial-up internet and start reading it out loud
to me.
I'm like, oh my gosh, I've never heard anything like this.
I was hooked.
Like I got to read more.
That market blog was written by Ann Barnhart and she was teaching sell-by marketing school.
So the reason, the real reason why I got so interested in sell-by was the childhood dream
was to ride bulls, raise cattle, and have a family.
Well, to raise and own a lot of cattle, you got to make money.
So here it was.
You mean bull riding wasn't going to do that for you?
Only for a little while.
I watched the NFR this year.
First time in a couple of decades, I've watched the NFR and they're, you know, they show their
totals.
And I thought, well, that's not enough to destroy my body, but okay.
It's not just about the money.
Like Amber and I were talking about this on the drive up here the other day.
And it's like, there's a drive behind it that is not just about the money.
But that's the passion's not buying you cattle.
No.
No.
So you read her stuff and did you read it because you were an order buyer and you were
just trying to buy cheaper?
Or you were trying to make deals for him?
Or what made you want to learn it?
Because if you're just taking orders, a lot of order buyers don't care.
I was speaking about the cattle markets in a context that I've never heard before.
So if everybody's saying the same thing and it all comes back to you can't make money raising
cattle and then one person's saying something different and sounds very confident in what
they're talking about, I got to look into this.
So she had a marketing school in Kansas City, which is three hours from where I live.
You don't get any closer to where I live than three hours away.
You know, because that's one thing I learned through marketing schools.
Everybody wants a school in their backyard.
And so I went to that school.
Now there was a decision that had to be made there because tuition for the school then was
500 bucks.
Do I take the 500 bucks and fill the propane tank to heat the house that winter or do I go
to the marketing school?
I went to the marketing school.
We'll figure the propane thing out later.
And two-day school, just like mine is.
And Ann was a commodity broker by trade.
So she was a data puncher.
There was a lot more math.
And she just really hammered the math over and over and over.
And I saw the math.
I got straight A's in school and math.
I struggled in a lot of my other classes.
So it came very easy to me.
The other thing was I didn't have existing paradigms going into that class.
Because if everybody's telling me that it doesn't work, I just didn't adopt their way of thinking.
So after two days of that class, I'm like, that's it.
That's what I'm doing the rest of my life.
And on the drive home from that school, I made this committed decision.
So I'm going to become the best at it.
Not because I ever wanted to teach school.
So I was never on my radar.
But it's just like, if I can become the best at this.
And I thought it was new.
Through research, I've realized now it's been around for over 100 years.
J.C. Penney did it in his stores.
Sam Walton worked for J.C. Penney.
Walmart does it.
They call it VMI, vendor management and inventory.
So I just made that decision.
Interesting.
This is what I'm doing the rest of my life.
Going to be the best at it.
Just so I can own a lot of cattle.
That's what it was always all about.
That's so interesting.
Because we say that about infinite banking.
It's not new.
Life insurance has been around for 200 years.
Somebody just decided they're going to teach it to the masses.
And so it seems new to us because it's not the general information being shared.
And see, you know, I just said earlier, I didn't have paradigms about marketing.
But I don't get introduced to infinite banking until I'm in my 40s.
I've got paradigms about finance.
He's got paradigms.
We're fighting through some of that.
We're working on him.
We're working on him.
So you went to the school what year?
That would have been 2005.
Okay.
So we're in 21 years.
Yeah.
So I've been buying cattle for 30, but I've been doing sell buy now for 20.
So did it make you a better cattle buyer?
Or were you only just buying cattle for that one guy?
So as an order buyer, you're basically given marching orders, you know, this weight, this price, and, you know, and they kind of tell you the quality, but what they expect.
So, you know, it's like putting the bumpers up on a bowling out.
I should not roll a gutter ball as a cattle buyer.
What the sell buy did is then it isn't just so much about what these cattle cost, but we started, you know, I was starting to learn about value.
And, you know, I just finished Nelson's book the other day.
And right there at the end of the book, he talks about the monetary cost of education, then he talks about the value of education.
And so the sell buy will also teach you the value of things.
I hear it so often.
And I heard it last week.
I was having dinner with a rancher.
And he said, so tell me about this sell buy marketing.
Because, you know, I'm sort of a parrot.
I'm going to make money.
Do some sell buy marketing.
And he's like, well, he said, I've heard about it.
But isn't it just buying cattle, getting a good buy on cattle and then you sell them and you make a profit?
He's like, so, like, I'm looking at five weights.
Well, they're not real good right now.
So should I still be buying?
Like, I probably shouldn't buy now.
I should wait for five weights to come into check.
You know?
Well, like, people just think it's buying one weight.
This is what I've come across.
It's one weight or it's one class of cattle or it's, oh, I'm just going to buy purebred Angus and I'm going to buy them low and sell them high.
How would you describe sell buy market?
So buy low, sell highs.
We know where that is.
See, the market goes up half the time, down half the time.
So you're only going to be right half the time.
You can go broke.
The other thing, just like you alluded to, you know, people are in this cycle.
Buy five weights, sell them when they weigh 100.
Buy five weights, sell them when they weigh 100.
You know, so, yeah, five weight steers especially are really overvalued right now.
But everybody's ignoring the three and four weights.
And since we're recording this, I better date it.
This is early March 26, you know.
So I don't know when your release date's going to be.
But the last pod I recorded, we recorded it in September.
It was released in January and Trump had to get on Twitter.
Screw that.
So that's why I put the dates out for the recordings.
But the sell buy will show you the different value relationships.
And, you know, the market's going to fluctuate throughout the year.
And so those value relationships between different weights of animals are going to change.
You know, in the spring, you're going to see this huge rollback on heifers because, you know,
people want to buy steers to go to grounds because the neighbor's bull ain't going to breed them.
Then in the fall, the rollback narrows back.
You know, the cow deal will be very similar.
Gestation periods are going to have a lot of effect on that.
There's a theory out there about older cows being worth less money.
Any female market since 2023 has disproven that theory.
I've seen broken mouth cows in 25 outsell five-year-old cows.
Oh, you still didn't answer the question.
Or you answered it with too many words.
Too many words.
I've been accused of being unworthy.
Well, I think it's like you go into the explanation of it, which is great.
But I feel like it's a matter of being in the class.
I feel like it's a matter of you buy what is a deal that day.
You get rid of classifications.
You go in with your barn card, which are your numbers of every weight and what your profit margin is built in, which I'll get into later.
But sell-by marketing is not just buying a class at a good deal and hoping to resell them.
It is finding the deal.
Yeah.
Would that be correct?
It's going to be based off the animal that you sold.
And your cost structure is going to factor in, you know.
So, like, if you have a high cost structure, it's going to disqualify certain cattle as buybacks, where if you had a lower cost structure, they would still work.
Now, you mentioned the barn card.
And a lot of times, and I tell this every class, you don't sell an animal until you've already got the replacement identified.
So, you got to have what you're going to buy back spotted before you sell.
And I sold a group of cattle one time, and four-weight heifers were really undervalued.
Well, the reason they were so undervalued was they needed a tow bidder.
And I showed up and filled that void, and all of a sudden, I can't buy these four-weight heifers.
I'm running them up, and that other guy was not weakening, but I could buy six-weight heifers.
You know, so it's also one of those deals that at the speed of commerce and auctioneer's pace, you'll know how to pivot.
With the barn card.
With the barn card.
But I'm going to make you tell me what sell-by marketing is.
We might be here an hour to get it out of you.
Well, there's...
If I am a traditional guy, and I come up to you and say,
why is what you're doing any different than what I've been doing?
Because the other guy's running off projected break-evens.
Sell-by marketing is real-time cash flow reckoning.
It's the relationship that exists right now.
And, you know, so we use an algebraic equation that Ann called the cattle square.
And the cattle square will tell you what you can, and just as importantly, what you cannot do today in order to prosper yourself.
Which I don't like your cattle square, by the way.
You know, it's not mine.
Whatever you stole from Ann.
And I have a problem with your cattle square.
You were doing...
I have never been taught to do math in a square.
And I'm like, I don't get it.
I am in the back of the class, not the smartest at math.
I'm like, I do not get this.
And so, you were in the front of the class talking, and I was writing it out horizontally.
And I'm like, oh, yeah, totally get it.
So, then everybody at my table that didn't get it, I'm like, here's the formula.
See, I show it the way that Ann taught it to me.
That became my paradigm.
I've had to challenge with some people.
Now that we've had a couple thousand people come through the schools, you get feedback,
and you learn how to be a better instructor.
Like, some people need it in words.
And the first time I was challenged with that, I'm like, how in the world do I put numbers into words?
Like, numbers are numbers for a reason.
They're not words.
And so, I've had to add a little bit of vocabulary to it to try to reach those people.
It just made...
Like, when I wrote it all out, and then the rest of the people at my table were like, oh, I get it.
I'm like, yeah, it's just hard when you're looking at it.
You're taught math this way, right?
And you're doing math kind of like this.
You've got to go around the barn to solve for X.
Yeah, yeah.
And you do have to learn algebra again when you go to your school.
Yeah, because the only thing that's in columns and that kind of squares, weights, and prices.
Those are your columns.
But yeah, you've got to go from one to the other.
You know, kind of that horseshoe type.
I just feel like there's a lot of misunderstanding.
I talk to a lot of people that are like, I buy and sell cattle all the time.
I had one guy say, Marijo, I buy and sell cattle all the time.
I know how to buy and sell cattle.
He's like, I need to go to that class to see what Doug's feeding.
Because I need his feed ration.
We don't cover feed ration in those classes, do you?
I get asked that question in every class.
Really?
Yeah, it's not very sexy.
Like right now when the cattle and the pens are getting corn alfalfa, ground hay and corn silage.
That's it.
And that lasts for words a little bit.
That's what people actually think.
That's what people think they're going to come to class and they're going to learn feed rations?
You learn that in 4-H.
You don't need me to teach you feed rations.
I mean, we've got nutritionists that can whip you something up and get a lot of performance out of these cattle.
But I can't remember what year it was.
And to bring enough energy into the ration, get the cattle to gain two and a half pounds a day that year was really expensive.
And so if I had to fit, and I'm backgrounding these cattle.
We're not finishing them.
So if I was to background these cattle to gain two and a half pounds a day, I had to bring this energy into the feed ration.
And it would have made the cost of gain absolutely prohibitive.
The cost of gain would be higher than value gain anywhere in the spectrum.
And so I recalibrated some rations.
Well, let's try two pounds a day.
Let's try a pound and a half.
And the only ration that kept the cost of gain down low enough was to feed them to gain about a pound and a quarter or to gain a pound and a quarter a day.
And so that's what I fed them for was to gain a pound and a quarter.
So I wasn't trying to get a whole lot of performance out of the cattle.
And, you know, I've had people contact me and one guy in particular stands out.
He was enrolled in the class.
And, you know, this was before we had the new website.
And he mails me the check and then he calls me and he says, can you mail me that check back?
I heard you're not really performance driven.
I will absolutely own that all day long.
You're right.
I'm not performance driven.
I'm profit driven.
And if you want performance, then, yeah, I'm probably not the guy for you.
But if you want to make money, I'm the guy for you.
Let's just expand on that.
Performance isn't making money.
Like at the end of the day, farming and ranching is about a profit.
It's not about your gross income.
Like so many people think this is what I finished for for gross.
I had a great year.
Well, OK, what was your profit and what's your profit margin?
Because if you can be a smaller operation with more profit margin, that's what matters.
And you talk about that in class, correct?
Revenue feeds the ego.
Profit feeds the family.
You know, and that's, you know, having a wife and daughter and the daughter, you know,
playing on traveling basketball teams, like got to pay court fees and sneakers and trips
to the ortho when she tears the meniscus in her knee and things like that.
So you absolutely have to make a profit.
But everything that we're told, you know, I was listening to farm radio the other day,
which I rarely do.
But that's what the state basketball tournament was being broadcast on last week.
And every commercial is advertising somebody's bull sale.
If you want to increase your marbling, if you want to increase your carcass weights,
if you want to increase feed efficiency, if you want to increase your weaning weights,
all performance.
None of those commercials mentioned anything about making a profit.
But see, that's the paradigm.
Performance, performance, performance.
And then, you know, throw up the Hail Mary and, you know,
oh, please, I hope I make a profit on this deal.
But right now, the way this cattle market is, I mean, holy smoke, you know,
you fill a Peterbilt, that's $250,000 you just put on that truck.
Like, that's a lot of money.
And people are calling me like, man, you know, I caught that digit this year.
I caught that comma this year.
They're so excited.
Like, they're making a million dollars in gross sales for the first time.
What's your net?
Did you know what your expenses were?
This could be an hour conversation for you and I.
You remember, what was it, back in, I called you back in December.
We have a lot of conversations.
Because you've had a lot more of these conversations than I have.
And I was noticing a trend, and it's probably because everybody's doing their taxes.
But the most frequent question I was getting was, I don't understand the overheads.
I don't know how to calculate these costs.
I don't know how to calculate costs.
I don't know how to calculate costs.
Just kept circulating.
And so I called you, and I'm like, Mary Jo, do you see this?
And you're like, all the time.
So after that conversation you and I had in December, I overhauled my curriculum.
And now we're going to break that down, and we really dissect how to calculate and track costs.
Direct costs are very easy.
We know what the vaccine costs.
We know what the trucking is.
We know what the vet was.
But the overheads are what start to confuse people.
And you've been through the class.
So you know I'm going to split hairs on details because details matter.
Those little AAA batteries you put in your flashlight, if you've got to get out of bed and go unload a Peterbilt at 2 a.m., that's an expense.
But people a lot of times ignore that because they didn't spend it directly on the cow.
It was only $5 for that pack of batteries.
But $5 here, $50 there, $20 there, $50 to eat at a restaurant while you're at the sale barn.
Whatever.
Those, you don't see them, and you don't think about them.
And I think it's part of learning.
I mean, A, people aren't taught to think like that.
But I also think it's part of learning the business.
Like I used to buy coffee and take my assistant for lunch and we'd go do all kinds of fun stuff.
I said, right off, not a big deal.
Yeah.
Right?
Until I sat down with the accountant and that $10 worth of coffee for us did not save me $10.
It saved me 20% of the $10.
You mean that $8 still came out of my pocket?
That coffee is not worth $1, you know?
And I think that if we don't truly understand that, like when I, and I don't do it all the time,
when I meet with clients, I'll go in and sometimes I have to figure out what their taxes are going to be
or what tax bracket they're in.
And I have a calculator that shows it the tiered tax system.
And I'll ask people, do you understand that we have a tiered tax system?
And they have no idea.
I did it on a webinar that you and I both presented on and you watched on Facebook.
Oh, yeah.
Yeah.
Yeah.
Jared Sorensen.
Yeah.
Yeah.
It's crazy how many people have no idea that we have a tiered system and they just think they're getting taxed at a 20% rate,
a flat 20% or, you know, 12% or 14%.
They don't understand that because nobody has ever shown them that.
Yeah.
You did a good job explaining that.
And I remember I'm like, I can just think of so many people who need to see this.
Mm-hmm.
Because I get a lot of tax advice.
Oh, I get all kinds of tax advice.
And I'm like, yeah, you're not in my tax bracket.
You don't know what you're talking about.
Right.
And that would be good for you to steal for the curriculum.
Like showing them that if you buy this, this is actually what you're saving.
You're not able to deduct that whole thing.
But if we don't actually know what our expenses are, how do we know if we're making a profit or not?
Like I'll see people's numbers.
I'm like, that's not adding up to me.
You know, like this is your gross income.
These are your expenses.
And you don't have any money in savings.
Where's all this money going?
Like if your expenses are super low and your income is super high, where is that going?
And they don't have a clue.
Not a clue until you actually were to sit down and look at, is it going to booze?
Is it going to eating out?
Did you buy a camper with it?
Did you buy a pickup with it?
Did you go on family vacation?
I had somebody tell me, was it last week?
I don't even remember.
They gave me their expenses.
And I was like, well, where are your cattle purchased?
Like, why are your numbers so off?
Well, oh, it was one of my agents is working with a guy that the numbers were so off.
And I'm like, there is no way there is a $6 million profit here.
Where are the purchases of the cattle?
And she's like, oh, well, I said, how many cattle are they buying?
She's like, well, they're buying like $3 million of the cattle a year because they got a feedlot.
And I said, well, they didn't put that in their expenses.
They said, you're sitting there as an infinite banking practitioner saying, hey, we've got a place to put $6 million.
They totally, totally skipped the cattle purchases.
The purchase of the cattle is going to be your largest expense, especially right now.
Completely left that out of the conversation.
I'm like, so people don't or that you'll ask them, what are your expenses?
And they'll give me their line of credit.
I didn't want your line of credit number.
I want your expense number.
And they think, well, my expenses are what I have to borrow.
And they don't truly write them down.
And so for sell by marketing, how do I know what I'm supposed to, if I'm building in a 20% profit, is it really 20%?
Because if I figured my expenses wrong, I could still go broke doing sell by marketing because I don't have the right expenses.
Do you see that?
There's, there's, you said a lot right there.
If you go back a few years ago, we had $5 diesel and we had $8 corn going to the bunk.
And I'd ask somebody, what's your cost again?
They'd tell me just a number.
If I asked that same question, what's your cost again?
The first word out of their mouth, about.
See, now we got cheap fuel compared to what we got used to.
And I mean, it's not cheap now since Trump decided to start overthrowing other countries.
Made diesel go up 90 cents a gallon in a week.
Can change in a minute.
But corn's four bucks.
And so now, like in Nebraska, we think feed's cheap because it's a lot cheaper than what we've been paying previous years.
And now you got this cheap feed like, oh, I don't have to worry about it.
The cost of gains like a dollar-ish feed cost only, you know, 90 cents, dollar-ish, whatever, you know, without any overheads or profit figured in.
And then, you know, we got $3 cattle.
Why are you tripping over this, Doug?
Why are you making such a big deal out of it?
So the other part you mentioned, if you don't know your costs.
And so, like you mentioned 20%, just to clarify, that's going to be on the input costs of the animal.
The overheads and the direct costs.
It's not 20% on the actual purchase price of the animal included.
Just to clarify that.
So, yeah, if you don't have them costs dialed in, your 20% probably really isn't 20%.
And the other thing, when you ask people what your cost of gain is, they're going to tell you what the feed cost of gain is.
And they're not going to include the overhead.
So some of these cost of gains can sound really cheap.
But then when you start bringing in the overheads, you know, on a profit margin in there,
that we call it a break profit cost gain since we're adding the profit in.
That's going to make that cost of gain a little higher.
But then when you have all of that dialed in and you have the profit margin figured in,
you can sell these overvalued cattle you have.
And then the cattle square basically gives you a ratio of dollars per pounds difference on the swap.
We can make absolutely sure that ratio of dollars on our buyback is in our favor.
So sell-buy gives us all the control and the only place we need it, which is on the buy.
Because if you're sitting at that auction and the cattle start getting too high priced, you just quit bidding.
You just fold your hands and you just quit bidding.
And see, we know that in real time.
So we know, okay, I'm out.
Sell them to the other guy.
I think you just said what sell-buy marketing is.
Like for whatever.
Well, it's probably a stay away from the textbook definition.
We are 30 minutes in.
But you just said it gives you all the control.
Right.
So sell, regular buying and selling of cattle, that's not giving you control.
You spend a little more time on social media than I do.
And what do you always see?
The packers screwing us.
You know, there's this.
Because you're right.
We don't have control on the sell.
Here's the other thing that's neat about social media.
And I noticed this, you know, after I did that pod with Crockett Carruthers.
He makes those little Facebook reels.
And then there's all these comments.
And everybody's like, oh, yeah, it's so easy.
You know, when you don't figure in expenses.
Man, I've been doing this for three decades.
And you think I don't sign my name to the front of more checks than the ones that I signed my name to the back to.
I started it from scratch.
Yeah, I know all about the expenses.
And you know what?
They don't freaking go away.
Yeah.
Keyboard warriors at their best.
And, you know, I was interviewed on another pod.
And there was three of us that they were interviewing on the pod at the same time.
And it was just 10-year cattle cycle, 10-year cattle cycle over and over and over.
And I'm finally going to have my limit of this real quick.
And I'm like, I don't have 10 years for a cycle to come around and bail me out.
The bills hit my mailbox every month.
So another neat thing, and this is why I love stockers.
Primary reason I love stockers is I'm high energy, so there's more turnover.
I'm always addressing issues working with the cattle.
And I enjoy that.
But the other thing is that turnover can be a lot more rapid with the stockers.
And so the cash flow is really freaking good.
And when you can have that kind of cash flow, I mean, which, I mean, if it's in your wheelhouse,
cash flow is king, right?
The stockers cover that.
I have never thought about it that way before.
Like when I talk about infinite banking, it's about liquidity control and guarantees, right?
And sell-by marketing is the control piece.
In farming and ranching, there's very little in your control.
You don't have the weather in your control.
You don't have prices in your control.
You don't have the health of the animal in your control for the most part.
You don't have control.
This is one small thing that you can do to control your purchase price, knowing building your barn card,
which I don't know much we'll get into that today because you should probably take the class.
But knowing when you go to buy with your profit margin built in what you can pay.
Like that control piece is huge.
Yeah.
I mean, I don't know why that just registered in my brain right now.
We hear all this stuff.
You know, we need, I'm going to use this for an example.
We need exports.
You know, the whole supply and demand, we need exports and blah, blah, blah, right?
I was on a travel study.
This would have been maybe back in 2008.
We got to go to China, South Korea, Hong Kong.
And on that travel study, we learned why we couldn't export beef to China.
Because a senator from some poultry growing state, I think somewhere back east,
slipped an amendment into a bill banning the import of chicken from China from coming to the United States.
So the Chinese just said, okay, we can do that too.
We're not going to take your beef.
That is so far out of our depth.
We have no control over that.
But we spend so much time giving lip service to it.
And that's what we always hear over and over.
You know, the performance, the trade, the Packers are screwing us and yada, yada, yada.
And yeah, the Packer collusion's real.
But the thing is, I got a wife and daughter.
I got to pull my own weight to help support the family.
So I got to make money now.
I mean, we've been trying to break up this Packer monopoly for a generation.
And it ain't going to happen.
And, you know, now what I think there's a bill they introduced here recently that they're going to address that.
You might want to study the history of Standard Oil.
Just going to throw that out there.
What do you have for...
Because you've got your feeders.
But then you also have your cow-calf pairs.
So do you have like a fair amount of pairs?
Do you do it for fun?
Because it's too slow a cash flow for you.
Like, I'm assuming we don't have anything registered.
And we're not like super fancy.
I would never go back to the registered game.
I would never go back.
So you were in the registered game.
Yeah.
When I was in it the first time, it was all based on the appearance of the cattle and the pedigrees and EPDs.
And eventually I started slipping sell-by into the registered herd that I had.
And it worked.
But if you're going to go to somebody else's production sale and buy a female, you ain't going to buy the female you picked out in the catalog.
Because everybody else had her picked out too.
She's going to be overvalued.
But the sell-by marketing will still work in that environment.
And I was making it work.
The reason I got out of the registered business was a guy made a comment.
He goes, well, I could buy some registered cows and raise bulls cheaper than I could buy them from you.
And I'm like, yeah, why do you think we do it?
And then he's like, well, you want to sell some of your cows?
And I said, I'll sell them all to you for this price.
And he took it.
And just like that, I was out of the registered deal.
But yeah, I would never go back to it.
I mean, I really like just those plain commodity cattle.
There's a lot of money to be made there.
And then you don't have the politics and everything else.
And the advertising.
The politics are bad amongst registered cattle.
They can be horrible.
And what's going on in the Angus Association in the last year, I wouldn't want to touch that with a 10-foot pole.
But the other part of your question, the reason...
So I grew up on a commercial cow-calf operation as a kid.
That was what I knew.
And I really enjoyed it.
But then when I started getting a taste of the stalkers, I'm like, this fits my personality better.
So I was that jackass that came along in a multifamily generation and sold the cows.
The reason that I got back into cows and I'm kind of staying in it right now is because the marketing schools have so much demand on my time.
That the cows are easier.
And that offends cow-calf guys because they're like, well, it's not easier.
You got night calving.
No, bullshit.
I don't get up in the middle of the night and go check cows.
And I'm not going to lick it off for her.
The cow is going to be the cow.
And so to me, the cows are a lot more hands-off than straightening out that high-risk loaded feeder calves that I just bought out of South Carolina.
Because they're going to need some attention and I'm going to have to put some effort into straightening them out.
So I liquidated some stalkers and got into cows because the cow can go via cow and they don't require near as much from me.
Plus, you can talk about it now because you know you're doing it at the schools because otherwise you're going to get that one.
I'm going to be like the other guys talking about something I don't do.
Right.
I mean, I get it all, you don't know anything about farming because you don't do it.
You always got that one.
Oh, there's more.
It's always funny when I get into a meeting with people and I start talking about stuff and they're like, hmm, you do know some stuff about cattle?
Well, I did grow up on a purebred cattle operation.
So I suppose I should know a few things.
Just because I don't have any, which that might change in a couple of weeks, we'll see.
Just because I don't have any does not mean that you don't know anything.
You know, it's like your banker doesn't know.
Does your banker farm?
Does your banker have cattle?
No.
But money all flows the same.
I don't care if it's flowing through sell by marketing, if it's flowing through a life insurance policy.
Money must flow, as Nelson says, because it has to come around.
If it sits stagnant, it's not doing anything for the economy.
It's not making anybody any money.
That's why it's called currency.
Never heard that one before.
I had a meter taught me that one.
He compared it to electricity.
Nelson compares it to water.
But that makes sense.
Let's see what I have here.
Oh, I want to talk about the thought process.
The first day...
Oh, I was waiting for this at your school.
The first day...
Well, the first three quarters of the day.
Three quarters of the first day are spent on mindset.
And so it was funny because the last break before you started talking about numbers, someone in the hallway go, it's about time we're going to get into some numbers.
I thought, you just missed the most important part of all of this.
And it's really funny because when you look at Nelson's book, when you look at my book, first part of its mindset, then we get into numbers.
We did not know each other.
I did not write my book based off of Doug's presentation.
You did not know infinite banking.
You were doing it the exact same way.
It's mindset and then it's numbers.
When you learned it, you did not learn mindset.
What made you finally go, whoa, we need to teach some mindset stuff and implement that into the course?
So I had gotten some mentorship from Bob Proctor.
People might recognize that name from...
He was in the movie Secret.
And man, I tell you what I learned from him.
Just totally revolutionized my life.
Like income went up, but you know, he's real big on paradigm shifts.
And so when I was pushed into teaching the marketing schools, I'm like, people are going to come in with this really constricted, closed mindset.
And then we're going to try to pry that open.
And that existing paradigm is going to reject some of the new material behind sell-by.
So I'm like, we're going to start with mindset.
We're going to talk about paradigms.
And so I'm going to tell you what's about to happen.
Because you're going to have this little voice over here and this little voice.
And this one loves sell-by marketing.
This one's going to go, yeah, but.
And so I knew that was going to happen to people coming through the marketing school.
So you knew it before it ever happened?
Right.
Because it happened to you?
No, I didn't experience it because I rejected all those paradigms.
But I knew it was going to happen to people that I was going to try to teach.
And so I thought, well, I'm going to take some of this stuff I learned from Bob Proctor.
Like you saw the stick figure drawing.
You know, that's where I got that.
And so I'm going to make you aware of it.
And it's always funny how somebody will sit there and be like, you know, they told me, oh, yeah, I was on my phone with the wife last night.
And, oh, this guy from Nebraska is telling me all this stuff about cattle marketing and da-da-da-da.
Man, I just don't know.
And then he's like, you said that would happen.
Yeah.
I told you that was going to happen.
The other thing was some people have this idea and it's probably partly my fault.
You can do sell by marketing.
And since the control is on the buy, I should always be profitable.
Well, now that makes it sound like it's really easy.
If you can always be profitable, like they think it's easy.
The Intel blog that I write for Farm Progress, you know, started, I don't know, seven years ago or something.
So everybody thinks that I just came out of nowhere.
Oh, look, sell by marketing is so great.
It works so freaking good.
Ranching and, you know, running feed, it's still hard.
And something's going to happen.
You're going to get that pen from hell that has high death loss.
You buy enough of them, you're going to get it.
And you're going through this pen from hell situation.
And then you start doubting everything.
I mean, we've all been through it, man.
Everything I touch breaks.
And, you know, I mean, we've all been through that.
And so you got to have that mindset to be able to stay focused and work through those hard times.
And so what was interesting, you know, when I go back to the first couple schools, people weren't prepared for the mindset.
And so, you know, I had a lot of that arms crossed body language and whatnot.
I remember one cowboy, very specifically, we did a school in Deadwood, South Dakota, and he just cuts me off.
And he's like, I'm not going to sit here and talk about my feelings.
Okay, I got a little bit of John Wayne in me too.
And I'm like, you know, I looked at him and I was like, that's great because nobody in this room wants to hear it.
But what I want you to be aware of is how your feelings, first it starts with the thoughts.
Thoughts, feelings, and actions is what an attitude is.
Your thoughts are going to have a lot to do with your feelings.
Your feelings are going to dictate your actions.
So we got to learn how to control that.
That all starts with that thought process first.
And so some people think it's ridiculous when we talk about being profitable in the cattle business.
I'm like, why don't you get first things first?
Decide to be profitable, commit to the idea of it.
But we're always talking about performance.
And oh, if you do this grazing program or you buy cattle with these traits,
and well, that all goes out the window if you're not committed to the idea of being profitable.
And so what was interesting going back to those first several years was the feedback that we were getting on the schools wasn't like,
oh, you taught me this cattle square and this other stuff and it's so great, it's working out great.
It was all about that mindset.
All the very first testimonials were all on that mindset.
And you're going to have to have some of that mindset because, you know, the sale barn, if you're going to buy cattle in the sale barn,
that's an intense environment if you're not used to it.
Because it's that auctioneer's job to kind of try to get your body to produce a little bit of adrenaline.
Get that heart rate up.
He wants you to be competitive with that other guy.
Your palms are going to start sweating.
I mean, every rookie goes through that.
I don't experience that anymore.
Like I've become immune to it.
I should not be allowed in an auction because I'm like, I'm going to win.
But that mindset helps with that.
And if you have that barn card in your hand and I'm committed to it,
and these numbers will keep me from making a mistake, you're golden.
Yeah, because you have your limit.
That's what I liked about the barn card piece of it is I have my limit.
Like I can set, we bought some land a couple of years ago,
and you're bidding against certain individuals that you want to stick it to just a little bit,
you know, like, and so, and I had my limit of I knew this is all I'm paying per acre.
And if it was going to go over that, it was going to go over that.
But did I still pay more than I would have liked?
That was my limit.
That was not where I would have liked to have been.
But I'm just like, oh, I'm going to get it.
I was like, when we got done, Scott's like, that was fun.
I said, neither one of us should be allowed to be bidding on anything.
He was not okay with this whole, I shouldn't say he wasn't okay.
He was just unsure about this whole thing.
And as he's online and we're bidding, he's just like, that was pretty fun.
Oh, you were online?
Yeah, it was all online.
That makes it a little easier.
No, it was actually worse.
Oh, really?
Because you didn't, I feel like it does.
I don't know that in person I would be any better.
I'd probably be better if I didn't know who I was bidding against.
But in this particular scenario, we knew kind of who we were bidding against and we knew who we didn't want.
So you still had the emotion.
Yeah.
Yeah.
Because you're just like, no, you're not getting it all.
Like you already farmed 25,000 acres.
You don't need any more.
Like it was just a different environment.
But even when I've bid on land around here, I was like, oh, what if I just, just $50 more an acre?
Like is that, oh, I could get it.
Could I get it?
But what if they go up to a hundred?
Then you're trying to do math really fast.
Where if you had it all laid out, like before I bid, I lay it all out.
This price per acre, this price per acre.
So I'm not having to do math when they're only going to ask me three times if I'm going to bid or not.
And so like even having a barn card for land, I think is super important too.
What is it?
If I'm bidding on a 1,236 acres, what is that times X amount per acre and X amount and X amount and to put it on there so you can easily go, oh, I'm over my budget.
And we probably should define what the barn card is.
Go ahead.
That has the numbers on it that, you know, we call it the efficient market value.
So that's the maximum amount you can pay for a particular weight of cattle and still hit your profit target.
So that's what we're talking about.
The numbers on the barn card keep us from making a mistake.
I think it's great.
It's like having a budget.
Your barn card is like your budget.
This is all you're allotted to spend on X weight because otherwise you're not going to make a profit.
Yeah, you start bidding it away then.
So back to mindset, I find you and I talk a lot about mindset on our conversations.
Nelson was a huge Zig Ziglar fan.
And so and I did not know that.
I think it was Zig Ziglar.
It was one of those guys.
And I had no idea.
He never talked about it.
But when you start listening and you start reading a lot of just mindset type books, and then you go back and read Becoming Your Own Banker, he's just verbatim saying or twisting it around money and making you think about money the same way.
But if we are not programmed to think about the positive stuff and we think, oh, poor pity me, the world is falling.
We can't do anything about these prices.
We're always going to be broke.
Farming is always going to be hard.
You can't get started from scratch.
It's impossible to make money.
You have to inherit it.
You're never going to be able to afford equipment.
I mean, it's constant.
It's pretty toxic and bar.
It is.
And if you're the one guy that's not toxic, because after you learned sell-by marketing, how many of your friends did you tell?
Right away, nobody.
I took everything that Ann said in that school right to the letter.
And, you know, every sell-by marketing school, I don't care who teaches.
Don't go.
But they never told you why.
Well, the reason you don't want to go and talk about it is because people will try to talk you out of it.
And so I went home and I would just get on the dial-up internet, pull up cattle market reports, and I just start running cattle squares.
Just repetition, repetition, just burn it in my brain.
And then later, I started telling the people that I cared about.
And those were the only ones.
Did they listen?
They listened.
Because what they were noticing was that there was something different about me.
I was doing things different.
There were a lot of this stuff that we give lip service to that I didn't give a crap about, like exports and stuff.
I just didn't care.
If somebody trips a breaker in Chicago today and the board doesn't open, I don't care.
Everybody else will be panicking.
I don't care.
It's what are those cattle worth in the sawdust.
That's what matters.
That's where the relationships exist.
And see, all these other outside forces that everybody's letting control them and that they're given so much attention to mean absolutely nothing.
Now, that's going to get a lot of attention when somebody asks you, what's the board doing today?
Fuck, I don't know.
I looked at the board in months, years.
Why would I care about the board?
Man, they look at you just so strange.
But then the other thing that they noticed, you know, I started from scratch.
The very first group of cattle I bought, I wasn't doing sell-by marketing yet, but it cost me $7,000 to buy 18 hits.
So I bought the singles, the sorts, the lepics.
Like, I bought the junk.
But then after a while, you start buying 50 hits and then 100.
And then you become the guy that shows up every three months, you know, selling a load, buying a load.
Then you're selling a load, buying a load every month.
Then you're selling, buying a load every two weeks.
What the heck is that guy doing?
He's growing and scaling like that.
Do you think they would have listened to you, though, had they not seen it?
You had to prove it.
Yeah.
You know, we live in a different world today.
Like you mentioned the internet trolls.
I'm a GXer.
I come from a different generation.
I was raised by a bunch of tough, crusty old bastards that expected you to do something, improve something before you can feel good about yourself.
That is all out the window today.
So, yeah, I have to prove it.
Everybody has an opinion about it.
But I just, because we're in such a negative environment, even if you say it can work, it's an automatic, oh, I doubt it.
Or it's an automatic, I get this a lot.
You know, oh, I buy and sell cattle all the time.
I know how to do it.
And I give one of my clients huge kudos.
He was not able to come to the Bismarck class.
So he did an online class and he's been buying feeder calves forever.
Feeds them out, finishes them, sells them.
Does a great job, right?
Runs his numbers all the time.
Like if there is one person I know that knows his numbers, it's that guy.
And he calls me and goes, oh, my gosh, I learned something that I can make more money.
And so it's such a testament to these people that are like, oh, I've been doing this already.
Okay, but you've arrived.
You have the arrival syndrome if you don't think you should be in the class.
Because is it really going to hurt you to go to a class and maybe pick up one tiny thing?
Or to even pick up a relationship with somebody and figure out like or and meet people in class that you can build off of?
Like, it's crazy to me.
The mindset of the arrival syndrome is no curiosity.
We've gotten rid of curiosity.
The thing about the guys that, you know, because I've had plenty of them that they're older than I am.
They've been buying cattle probably about as long as I've been alive.
And the thing that I always hear from those guys is after they go through school, they're like, you gave me clarity.
There's some things now that make sense.
There were things that we were doing that were working, but they didn't understand why.
And so the class will give them a little bit of clarity.
But yeah, you can absolutely grow up in a sale barn and still not have a clue how any of the relationships or anything work.
A lot of those guys that, you know, especially like if you work in the sale ring or something, they pick it up intrinsically or osmosis.
They pick it up by osmosis, but they're lacking.
But they still don't know why.
Yeah.
One of my like biggest takeaways from class.
And you can make fun of me if you want.
But one of my biggest takeaways was you spent a lot of time in class talking about the sale barn.
Who to watch.
Watching for tickets.
We're watching the ring band.
We're watching who's bidding.
We're watching the cattle coming through.
We're not going to sit on the top and have coffee with our buddies and just, oh, yeah, throw a card up here and there.
Like you're there for business.
And you don't see that a lot in a sale barn.
It's so hard for some people to stay hooked up during an auction.
Because I look around every once in a while and there they are scrolling on their phones.
And you get sucked into scrolling on that phone 30 seconds too long.
You missed the deal.
You know, but man, people just.
And I've said this and I put it on social media and I get a lot of pushback on it.
You know, but it was like, I don't have time.
I don't have time.
I don't have time.
Man, you lack focus is what you lack.
You don't lack time.
You're lacking focus.
They don't have time for what?
Just to come to a school or sit in a sale barn or, you know, like that's one thing.
Oh, I don't have time to be sitting in a sale barn.
Like you don't have to be in a sale barn.
You need to know what's going on in your local sale barns, but you don't have to live there.
And I think that sometimes people get the wrong impression because I love that sale barn.
I thrive on it and I've studied it.
Like I blend in really well there.
And, you know, some people just, they don't want to do it, but you're going to need to know how to function.
There's a lot of money to be made in those sale barns.
And I'll just kind of share this little conversation I had with my daughter one day.
She's like, dad, you talk about opportunities in the cattle market.
Like I've nicknamed trades.
And I'll be like, make sure you look for this, look for this, look for this, you know?
And so she's like, what does an opportunity really look like?
I'm like, whenever two people get together.
Well, you've got a crowd of them at the sale barn.
That means there's a lot of opportunity.
Man, I came to this realization a long time ago.
I mean, this was back when feeder cattle were 98 cents.
Like there's millions of dollars trading hands right there.
Now today it's like millions and millions of dollars trading hands.
Why don't you want to get you some of that?
Because if everybody's being brainwashed to think that there's no money to be made in this business
and that you can't start from scratch, that means there's a ton of money left on the table.
You got to know how to get it.
Yeah, that's very true.
This is one of my questions.
You asked me, this is the first question you asked me when we met about your personal stuff.
Oh, turn around.
It's fair play here.
Here we go.
Let me get ready.
Somebody in the class said, well, what if everybody in the sale barn is doing this?
And I just 100% had to, I was in the back of the class laughing.
And I said, you know how many people ask me that?
What if everybody does infinite banking?
Well, we get rid of the feds.
So you were happy with my answer.
Oh, I was tickled with that answer.
But what percentage of people do you think actually leave your class and implement what they've learned?
Based off the amount of testimonials that we get compared to the number of people that come to the schools,
it was running around 3% send me a testimony.
So then I'm like, okay, there's going to be a percentage that don't contact me.
And the other part of our conversation earlier, we were talking about the silent ones.
You'll never know.
And what's kind of amazed me about the silent ones is I'm just going to put this out there.
I'm Judge Mel.
Like I'll probably be the only person on the planet that will admit that I'm Judge Mel.
Judgey Judy.
And, you know, I've looked at some people and I look at their body language during the class and I'm like, well, this class just became a tax write-off for this guy.
He's not going to go home and do it.
And then you know what?
That's the guy that will send you a text or call you 12 months later and give you a list of trades that he's done through the year.
So I don't know that I could really put a number percentage-wise how many do it, but it's going to be low.
It's going to be on the lower end.
But to go back to that point, what if everybody goes 10 toes in and everybody does it?
Everybody's going to have a different cost structure.
Everybody's going to have a different weight of animal to sell, different sex, different body condition.
The relationships will still exist.
And so then the problem with that will become the producer with the lowest cost will win.
And that's the other thing that we hear in the cattle business.
Cut cost, cut cost, cut cost, cut cost.
The only way to be a least cost producer is to produce nothing.
If you're going to be in production, you're going to have costs.
So there's never going to be any way to get around that.
And so the guy with the lowest cost will win.
And the guy with the lowest cost or the other guy that could have a higher cost and still win is going to be the guys that are the most intentional with how they deploy capital.
Kind of like you mentioned earlier about I can buy this and, you know, it's a write-off.
A cup of coffee is a write-off.
Like those guys are going to be very intentional with how they're deploying those dogs.
That's interesting.
I never thought about it that way.
Because at the end of the day, I was talking to somebody last week and I was telling him how these big farmers, just because they're big doesn't mean there's a profit there.
And they don't know their numbers.
Because they're big doesn't mean they know their numbers.
And this person I was talking to just could not believe that.
And I said, well, I could take two farmers side by side, planting the exact same crop, similar soils, same equipment.
And one of them is going to be more profitable than the other one because one of them is going to manage money differently than the other one.
And so the same thing is what you're saying.
Somebody is going to have land that's maybe paid for or somebody is going to have they sold a different weight and they got more to buy back with or maybe their batteries didn't need to be replaced.
I had a really good year last year.
I didn't have very many repair bills.
And that made a big difference.
That's the question I wrote down, though.
So you didn't have a lot of repair bills last year.
Do you still figure that into your cost?
If you have land that's paid for, are you still figuring in a land payment or at least a lease payment?
So the land that I own.
Yeah, there's there's a rent check due.
So the cattle owe a rent check on that pasture.
Absolutely.
Have you always done it that way?
Yeah.
Yeah.
And now how it's supposed to be done.
But a lot of people won't.
Right.
Because they'll say you can be profitable when the land's paid off.
But when the land's paid off.
It comes back to the tomb room or the altar that you mentioned earlier.
So I'll give you this example.
I mean, I kind of cut you off.
But this this example explain it.
I was sitting in one of our local sale barns one day and this couple that I knew and I worked for him as a kid.
The wife is the bookkeeper.
I mean, she's meticulous.
I mean, down to the red cent.
And so she's writing down the head count, the weights, every draft, what they sold for.
She's got her calculator right there in the sale barn.
She tallies it all up, divides it by the number ahead they sold.
She's like, well, made $200 ahead on our calves this year.
Now, this was one of those really rough years.
And I bought some of their heifer calves.
And, you know, my little voice inside is like, don't say it, Doug.
Don't say it.
And she kept repeating, we made $200 head on our calves.
And I'm sitting there looking at my car and go, how the hell did you make $200 on this?
What did you charge yourself for pasture rent?
Well, we own it.
All we have is a little bit of property tax.
Well, then my thought process was, who says a little bit of property tax in the state of Nebraska?
We're like the heaviest tax state.
But see, it is bad.
But see, if that's your only expense, is that property tax?
Like, yeah, raising those calves looks pretty cheap.
But here's the other thing about that couple.
I got to bring this story full, Luke, to get the full context.
They put up little two-string square bales.
And that's what they feed their cows during the winter.
Like, we're throwing 50, 80-pound bales at these cows all winter.
And they made $200.
Thing was, that year, they could have rented that pasture to their neighbor for $200 a pair.
So they did all that work with them two-string hay bales and all that all winter just to collect the rent check.
They didn't make money on the cattle.
They collected the rent check.
So maybe I'm just that ridiculously stupid or simple or whatever.
But I'm like, yeah, it's an expense.
You have to recapture that because you could have done something a lot easier and made the same amount of money.
I know we're going back to kind of where we were.
But when we talked about it earlier, like, they don't, oh, my tractor's paid off.
My combine's paid off.
My baler's paid off.
All these things are paid off.
But you're still not figuring in the payment.
And what happens when you need a new tractor?
Did you make enough profit to have on hand to buy the tractor?
You didn't.
So, and I see that a lot with the younger guys.
They think farming's easy, right?
Because dad's letting them use a tractor.
Dad's letting them work it off, whatever.
And I'm like, well, are you figuring in your lease payment?
You don't have to pay dad.
I don't care if you pay them or not.
But you need to figure in a payment, either a tractor payment or a lease payment.
Are you figuring in the land rent in exchange for labor?
Like, I don't care if you guys exchange money or not.
Ideally, you should be.
So you know what those costs are.
And you can show those expenses.
But you have got to figure that stuff in.
Because if you're not, that was a prime example.
You didn't actually make money.
And now when expenses go up, you didn't have the profit margin built in.
And I'm a big believer in this too.
Like, you know, when I talk about the overhead costs, yardage costs, you know,
like how many cents per head per day?
And the nerds, and I say the word nerd in the utmost respect,
because it's the nerds that get good at things.
You know, be like, well, okay, example, I have 500 head of cattle.
And I sold a load.
So I sold 80 head.
So don't the overheads go up on the 420 that are still, you know,
on the place while I wait six days or whatever to get the 80 head that I sold replaced?
Oh my God, why do you want to figure it that tight?
Like, you're going to start calculating daily costs over your head count over that six day period.
And so what I've suggested, and this just fits life.
If you add a cushion, let's just say five cents per head per day to that yardage cost and just charge it all 365 days of the year.
On that 500 head operation, it's going to be 9,500-ish.
I mean, I'm doing the math on the flyer.
So give me a little leeway there.
But it'll be 9,500-ish.
I need a calculator.
So if you're off, I wouldn't know.
But it'll be somewhere around.
It'll be over nine grand.
I know that.
You got this little 98-cent spring in the valve housing that your green tractor that will break loose and do $10,000 worth of damage.
And we already took care of the rainy day deal with that five cent per head day cushion.
So, I mean, I'm kind of a believer in having a little cushion in there.
I mean, I was telling my daughter the history of the family, you know, great-grandpa was a cattle and money guy.
Grandpa was a machinery guy.
Dad kind of wants to do things for the next generation.
I'm kind of back to being the cattle and money guy.
I want to handcuff myself as much as I can on buying back cattle because I want to keep as much of that money as I can.
So this whole trickle-down deal that we're told, oh, if we can get beef demand to go higher, the packers will pay more.
Okay, we already know that right there doesn't happen.
But let's suppose it did.
The packers pay more to the feed yards.
The feed yards, yeah, they'll probably go into the sale bar and blow their brains out because they're pretty good at that.
But then when they buy my cattle, like, hell no, it ain't going to the cow-calf guy.
I'm going to keep as much of it for myself as I can.
So I want those cushions in there.
I want some of that.
You got to have money to replace that tractor.
And I got to say this, Mary Jo, because it just burns me so bad.
But there's all these crash-out videos all over social media.
Oh, it's so hard to make money in the cattle business.
Listen, Trump got on Twitter last October and he just crashed us.
And that was real money.
That was $300 a head he took away from us.
And I'm looking at their video.
And I see brand new pipe fence.
Brand new J-Bunk.
I see a $300,000 tractor pulling a $70,000 feed wagon.
And that guy's making a crash-out video.
I don't think Trump was the problem.
You call it the Parkinson's law.
All that fancy stuff that he has was probably the problem.
My pens were built out of...
Because I was a broke kid when I started.
So there was a tornado, went through a feed yard.
And I went up.
I got to buy the guy's stuff.
I went up there with a cutting torch.
Started cutting sucker rod out, brought it home, re-welded it.
My pens really look like secondhand number two pens.
They're ugly.
But they hold the cattle in.
And here's the thing.
If you want to have the nice things, that's great.
I like nice things.
But do it smart.
Here's the trouble I have with those.
Is the fact that we think it's never going to come down.
It moved.
I was meeting with a guy a few weeks ago.
And I said, well, when do you think the cattle market's going to tank?
And he said, I don't like that word.
I said, okay.
He goes, I don't think it's going to tank.
I think we might have a new floor.
And I was like, that was my reaction as well.
I was like...
You know what just went through my head right there?
2014.
The new plateau.
And then we got into the fall of 15.
Black Diamond Ski Slope.
That thing went straight down.
Are we going to end up where we started?
Or will we have a new floor?
Right?
Like...
I don't think we'll see $1.50.
But we're nowhere near where we started.
And we're upset because it moved a little bit.
Are we having a temper tantrum?
I don't call them crash out videos.
Are we having...
I hang around teenage kids quite a bit.
Not only are you saying pod, but now we got crash out videos.
Are we having a temper tantrum?
I get that it moved.
And I get that it moved in a day.
And if you sold the day before, you were making more money than the next day.
I totally understand.
And that sucks.
Remember back in June.
But we're where we've never been.
And so back to mindset.
Can we appreciate that?
Because in the farmer's mentality, well, what if I would have done this?
Or what if I don't sell grain?
But you didn't.
What if I just hold those calves a little more?
What it's always is what if.
And I was talking to a guy one day and he said, I didn't make any money this year.
And I said, what do you mean I didn't make any money?
You contracted everything.
I thought you made money before you even planted because you had everything contracted.
Well, I did.
I said, I don't understand.
What do you mean you didn't make anything?
Well, I could have made more.
If I didn't contract at that low price, now it's higher.
And I'm selling for a lower price based on a contract.
And it's this tiny little bit of that shoulder of greed that I still did better.
Could have I did better yesterday?
Yes.
But I still did better than I've ever done in history.
Can we just celebrate that?
And go, there's nothing we can do about it.
You remember back in the month of June, we had our pom-poms.
We're starting to set record high prices in sale bars.
Everybody's got their pom-poms out.
You could put new sale bar record on Facebook, get 150,000 likes, just like that, right?
And then the market went higher.
And then Trump gets on Twitter, has his little temper tantrum, cattle market drops.
That price that we got in October was still the same price as it was in June.
I remember.
But we were so excited.
I remember texting you because I had other people saying exactly what you said.
So I was like, what's your take, Doug?
Because it's very much a different mindset, right?
And I'm not living in the sale barns.
I'm not seeing the ups and the downs.
So I like to watch all the videos.
And I like to be educated from all sides, even the people that are throwing a temper tantrum.
Because are they valid?
What's valid?
What's not valid?
But I like to have all the information.
That conversation with you, the conversation with other clients that said the same thing,
we're still where we were in October.
Like, what's the problem?
Is it where it was?
No, but are we not going to ever expect it to come down?
You know, there's Gordon Hazard.
He's got a great book called Thoughts and Advice of an Old Cattleman.
There's a quote Gordon has that's just wildly popular in the cattle business.
You can't throw a stone so high that it won't come down.
And, you know, my banker, he was telling me that, you know, they went to Nebraska Bankers Association meeting or something.
He said that there was some guy from a university.
So that already discredits him in my world.
But, you know, he got up there on stage and he was talking about we're on a new plateau.
And I'm like, how can anybody talk about a new plateau after what happened in 2015?
Like, you have to be new.
Because I've been around like, you know, the cow that stole Christmas BSE in 2003.
I've been through the crash of 08 when the housing bubble burst.
And then you had that crash of 15.
And for the young people listening to this that weren't in the cattle business or don't recall 2015, we were buying $3 five-weight steers in the spring of that year.
And then right before that crash or just at the start of the crash, eight-weight steers were $2.
So you bought a $1,500 animal.
You ran it out for, you know, five, six months.
And then it was only worth $1,600.
But that isn't where it stopped.
Because I remember buying six-weight feeder bulls for under $1.
That fall.
$0.96.
So what do you think is going to happen?
The market will do what it wants to do when it wants to do it just because it can.
That's the best bullshit answer ever.
That's the most honest answer you're ever going to get.
Not accepting it.
I just, listen.
In sell-by marketing, you only deal with today.
Do I have, do I, do I have.
Are you running for office?
Do I have my opinions on what's going to happen?
I'll give you two opinions right now if you want them.
If that screw worm crosses the border, our government's going to overreact.
That's going to screw some things up.
What are they going to do with the southern border?
Is that going to be a soft reopening?
Or are cattle going to come across that border 24 hours a day?
Because here's the thing.
There's a difference between supply and what's available.
When they close that southern border and those Mexican cattle couldn't cross, the supply is still there.
It just no longer was available.
And so if they make that supply available again, what kind of impact will that happen?
And I just think that's going to depend on how fast they allow them across the border.
So I really can't give you an answer, Mary Jo.
I know.
I think this is what's going to happen.
I think your answer was great, but...
But there's going to be some of them black swan wild cards in there that could be turbulent.
But here's the neat thing about sell-by marketing.
I want something like that to happen.
I love those black swan events because you already touched on one emotion, greed.
Fear is the other one.
Both of those will sneak up behind you and cut your throat without you ever knowing that it's coming.
So if they reopen that border, you know, and the Mexican cattle start flooding across, they're going to be panicked.
People are going to be freaking out.
When people panic and freak out, they don't want to sell anything and they damn sure don't want to buy nothing.
That makes my life so much easier as a cattle buyer when my competition removes themselves from the equation.
I like market crashes.
I absolutely love market crashes.
It makes it so much easier to do trades.
The only good thing about the COVID shutdown was it crashed the cattle market.
The trades were great.
Everything else in the world sucked, but the trades were great.
And I was going to ask this.
In sell-by marketing, if the market crashes, you're making more money.
The cash flow could be better.
The cash flow is better.
Right.
So let's define making money because some people are going to get really hung up on the balance sheet.
So I'm going to go back to 2015 again.
When I bought those cattle in the spring, you know, we're paying $3 a pound.
They're worth a lot of money.
And then my replacement costs $0.96 a pound.
That shows up on the balance sheet.
So does that look profitable on the balance sheet?
To the banker.
Banker panicked.
He called me into his office to come have a talk.
And so I had to point out a couple of things.
I'm like, look, I paid you your interest.
I'm current on all my bills.
Like I don't owe anybody any money except a little bit of principal that I owe you.
But I said, did you notice the headcount?
My headcount went up because I was virgin buying cattle like crazy.
He didn't notice the headcount?
He didn't.
He was just another one of those balance sheets that just took a, got a big black eye.
He missed the headcount.
And when I pointed out, yep, look, my headcount went up.
The cash flow was there.
I don't owe anybody any money.
So I cash flowed through that whole deal.
Then he felt embarrassed that he called me in.
But to him, it looked just like all the other balance sheets that he was looking at.
And there were black eyes.
See, here's the thing about sell by and a market crash.
It is a head per head transaction.
So you sell cattle, you sell 80 head.
I want you to replace 80 head.
See, now we're maintaining inventory.
But when the market crashes and those price relationships widen out, you know,
sometimes I say the relationships get a little looser.
Now there's more profit in those trades.
So you got the profit that you penciled in, but you can capture more.
So then you get the excess profit that's above and beyond what you penciled in.
You invest that back into virgin buying more cattle.
You're scaling the operations during the market crash.
Explain what a virgin buy is.
So virgin buy is if I sold 80 head and I bought 81, that one is a virgin buy.
Because it's the first initial buy and then it will start its own site.
Here's a question I've had for a year.
If I sell, and I know you said earlier,
I am not supposed to sell until I know what to buy back.
But I know people that are doing sell by marketing and they're selling.
And then they might wait a month to buy back.
They might wait a week to buy back.
When is it actually a virgin buy in your books?
How long?
We're going to come back to the mindset deal right here.
Okay.
You're either in or you're out.
You're either doing sell by marketing or you're not.
Why would you want to waste the time?
Why would you want to waste the time 30 days or longer and let that pen set empty?
Get them bought and fill the pen and get them adding value.
Whether it's through monetary gain of cash rate in the feeder bowl or value gain of feeding the cattle.
You're wasting time letting that pen set empty and not getting those cattle replaced.
The current market conditions that we've been in for the last, let's just say the last year, the market's going up, up, up.
That's financial suicide to sit out.
And I've had so many of those calls.
And I'm going to really try to condense this down, but we know where that road ends.
I sold cattle and then I was told by somebody to hold on to the money.
By the time they finally get over the cognitive dissidence to go buy the cattle again, they shot themselves in the foot.
They could only replace 70% of what they sold.
If you're making money...
Okay, so stupid question coming from...
I'm just going to ask the naive question that a new person might be asking.
If I have to bring my cattle to the barn to sell them, but nothing is selling that day to fit my barn card, I can't take my stuff home.
It's already in the pens back there.
It maybe already went through.
How am I buying back the same day if I'm not finding anything to fit?
So it doesn't have to be the same day I want it in a very narrow time window.
So how narrow...
Because anything outside of that narrow window is considered a virgin buy for you.
So how narrow is that window?
Well, let me clarify this.
I'm 10 toes in.
So to me, it's never a virgin buy.
Like, you're going to get those cattle replaced and you're going to get that profit and lock that in.
Like, I'm not going to wave the white flag.
And I've got over 20 years experience doing this.
I've only lost money on two groups.
One was high death loss.
You know, they came out of Alabama at 20% death loss.
Yeah, you're going to salvage that.
The other one was I pre-bought before I sold.
And the cattle that I sold didn't weigh what I thought they were going to weigh and they didn't bring the price that I thought they were going to bring.
So I bought my own loss on that.
I don't make that mistake again.
And so...
You never pre-buy.
No, I do pre-buy.
Oh.
But here's how I do it.
Like, this year, the market's going up every week.
You know, you read those...
You read the footnotes on the USDA market reports.
You know, and cattle are this way to this way.
We're 10 to 30 higher.
Now, that's a pretty doggone big leap in seven days.
So I've got this group of cattle sorted up.
This is how I do pre-buy.
I got this group of cattle sorted up and they're going to sell on Thursday.
So on Monday or...
And listen, there's 80 head over there.
I want to make sure I click.
Like, there's 80 head over there.
And so like Monday, Tuesday, I'm going to go pre-buy based off what I think those cattle
weigh.
And I spot weight them.
So I got a pretty good idea.
But it's not always going to be accurate.
Shrink and things like that.
So I got a pretty good idea what they weigh.
I got a real good idea what their cost is because I've been keeping right on top of that.
And so then I'll build a barn card, but I'm going to pad it a little bit.
So if my barn card says 350 at this weight and this price, 340 is going to be my stop sign.
And so I'll try to buy maybe 25, no more than 30 head against the 80 that are leaving
on Thursday.
And then I sell those cattle on Thursday.
Now I know what they weighed because the weight they sold at is their weight.
I'll know what my cost is because now I got the sell weight to accurately figure my cost
of gain.
I can build that barn card right there in that sale barn with the calculator on my phone
in under two minutes.
My daughter's timed it.
And I can sit there and start buying cattle at that sale.
And, you know, if I got to finish up the next week, I finish up.
That's how I've done it this year with the market going up.
Now, if the market's going down, well, I might as well take some time and haul manure out
of the pens.
And I might as well fix that faulty float and, you know, and whatnot on the drinker and
weld the broken sucker rod and stuff like that.
And then, you know, seven, 10 days later, but I'm still not going to wait too long,
even though the market's going down because I can't add value to them if I don't own them.
I used to be an order buyer and I may or may not have used this line on the phone with some
of my customers, but you can't make money if you don't own them.
If you're making money, why would you take 30 days off to do a buyback?
Just get them bought.
If you're making money, why wouldn't you want to get that deal done and get on to the
next trade?
So it's not necessarily, if I can't find anything that day, like after I took the class,
that was just like this, a year long, this has been hanging over my head.
Like we've talked since about a lot of other things that were more.
Geography is going to factor into this because like I think state of Nevada only has two sale
barns in the entire state.
They've got logistical issues to deal with that I don't because I've got over two dozen sale
barns within an hour and a half driving me.
And I ain't even been to half of them because four of them sell on the same day.
So I'm going to go to the sale barn.
I can buy cattle out.
So I've never been to the other two that sell on Tuesdays.
The other thing is, and this took years, but comes back to you got to prove something.
But I built my network of people in the sale barns and I have enough scale now that if
I get skunked in Nebraska, I'm going to get on the phone and we're going to find some cattle
out of Southwest Missouri.
We're going to find cattle out of Tennessee or, you know, South Carolina.
So I'm going to tap into that network and do that.
Now, somebody's listening to this and they're thinking this.
What does that cost to ship cattle from Tennessee to Nebraska?
It's going to be four grand.
Oh my God.
You just spent $4,000 to get those cattle trucked halfway across the country.
Yeah.
But I got them delivered to my yard $25,000 on the load cheaper than I could buy them in Nebraska.
People actually don't figure that in.
They get hung up on a $700 truck ride to go three hours down the road.
Interesting.
You drove past all these other sales, you know, because I used to sell in central Nebraska.
How many sale barns are there between Southeast Nebraska and central Nebraska?
Dozens.
And I shipped them cattle past all them other sale barns, get that one.
They're like, what's it cost to get them to central Nebraska?
And at the time it was like $700, they'd be $900.
And they're like, oh my God, you spent $700 to get those cattle out there.
Why?
And again, this is back in those days.
So the price is going to be a little different because I netted $5,000 more.
But they can't get past the $700.
I mean, I'm sure you face it on the premiums, you know, and things all the time like that too.
It's a business thing, right?
Like people will say, I just had this conversation yesterday.
I said, do you need to hire a bookkeeper?
And the person I was talking to said, $500 a month?
I can't afford $500 a month.
And I said, can you afford an IRS audit and penalties?
Because you didn't get 1099s out on time?
Like, can you afford an audit from workforce safety?
Like that is going to cost you more in the end than a $500 bookkeeper every month.
And in order to afford her, why don't you figure out how many jobs you need to pay for her to save your butt on the other side?
Like the big picture isn't there, right?
It's just that.
$500 to me sounds cheap for that.
There's bookkeepers charging five figures that I don't feel like are owning it.
And the other thing is how much time did you buy back?
Yeah.
Well, that's exactly right.
It's like people will say, you have a cleaning lady?
Oh my God.
Like, yeah, I do.
And it took me a long time to get that through my noggin that I should have a cleaning lady.
People told me that forever and ever and ever.
Okay.
Well, guess what?
I'm a much nicer individual now.
And in the summertime, right, we have about eight acres of grass we mow.
It is like twice a week.
We have all kinds of stuff we need to do outside.
We have trees to trim, fencing to fix, like all these things that I need to do, an Airbnb to take care of.
Like I was not getting my house clean.
When we pulled in the driveway, I mentioned how much grass you mow.
We mow a lot of grass.
Your lovely wife, who is not as allergic to animals, can be in my house today because of my cleaning lady.
Yeah, she ain't sneezed or sniffled yet.
No, but if I was cleaning this house, she would have probably needed an allergy pill.
Like, you have to figure that time.
Like, I can now go and do some shopping or I can go somewhere on the weekend.
I can go see my folks on the weekend because I'm not having to worry about cleaning my house all day Saturday.
And mom and dad, I can't come see you.
Like, they don't put value.
People don't run a business.
They have a job.
And their job is to run cattle.
And they're not thinking of that big picture.
You did a pod recently where you were talking about college education.
And on the drive up here to Bismarck, you know, I played it in the car and I was talking to my daughter about it.
You know, being a freshman in high school, that's going to be a bridge we're going to have to cross here real soon.
And, you know, I was trying to explain to her, like, there's a difference.
We know what cattle cost.
But a lot of people don't know what the value of the cattle are.
We've been brainwashed to say, oh, yeah, if you go to college, your earning potential will be this much.
I dropped out of college to ride bulls and I'm making a hell of a lot more money than my college professors ever did.
People don't understand the value of things.
And I don't think we've really placed enough emphasis on the value of education because when we start out, our education was free.
And I've got a different appreciation for teachers now because I hated them when I was in high school, man.
Like, I ain't gonna lie.
But after teaching some classes, the very first ones, I'm like, man, teaching's hard.
But I told my daughter this.
I says, what you kids don't realize going through school right now is they're going to teach you a little science.
They're going to teach you a little history.
They're going to teach you how to read and they're going to teach you how to do math.
And I says, you know what you can do with all that?
You can start to educate yourself later in life.
And right now she's reading Romeo and Juliet and she is hating it.
And I'm like, but when you get to be where I'm at in life, we study what we want to study.
And then reading gets to be a lot more fun.
Yeah.
I mean, how many people have I talked to?
I've said, you know how many books I've read, Mary Jo?
You know how many books in my life I've read?
I'm like, zero.
That was the whole point of graduating high school is to never read another book.
Yeah.
And now I read your book and I couldn't put it down.
And you know how many books I've read since?
Because they made this realization that now I get to study what I want.
You mentioned.
And those things are exciting.
You've mentioned mindset.
You know, we've come back to that several times.
You know what the first book I read after high school was?
Psycho-Cybernetics.
You want to know why I read it?
Because world champion bull rider Gary Lafue told me to read it.
I'm like, well, if world champ tells me to read a book, I read a book.
And that's kind of where the mindset came from.
But you have to be teachable.
I was talking to somebody who she has a policy and her husband doesn't understand it.
And he's like, so how much premium do we have to pay?
And I told him how much premium was.
I'm like, well, you put it in.
It's basically her retirement.
That's she's self-employed.
That's why she's got this policies for retirement.
He came after the policy.
So I said, you know, I know this person that wrote that book,
this book that you can read on it.
And he goes, oh, I don't read.
He goes, I don't even read magazines and stuff.
And I said, do you know how to read?
Like, if we don't read anything, what are we learning?
Like, are you purposely staying put in life
because you think the good old days are going to come back?
It's so cheap.
I buy the $3 used books on Amazon.
I don't care if I got to pay full price for them.
The postage costs me more than the book does.
So I'm like, if you're going to buy the used books on Amazon for that price,
you can't afford not.
I buy the book and I'll buy the audio.
If it's a good, I always buy the audio first.
And I subscribe on Audible.
I have one credit a month.
Yeah.
And I don't always use it every month,
but I got like, I think I have like 10 credits.
That's one book.
And then if I like the audio book,
I will buy the book and then I will start highlighting it.
But I have no problem buying books.
Like when it's something you want to learn,
like kids in high school are exactly like,
Romeo and Juliet's the stupidest thing in the world to me.
Brain dead.
Yeah.
But when I went to college,
I loved it because I got to study what I wanted to study.
I didn't have to study a bunch of history,
which I'm not good at.
And I just, what, how does it relate to today?
Right.
Let's just skip all that and get to the point.
I don't want to have to study it all and do all this stuff.
It makes sense when it's what you want it to be.
Well, history repeats itself.
Reading a book is not bad.
History repeats itself.
You know why?
Because we didn't study the lesson we didn't learn from.
I'm going to repeat some of history because I'm not reading it.
It's like, I tell my daughter this.
I'm like, it's like peeing on the electric fence.
You can tell somebody not to pee on the electric fence,
but they're still going to do it.
They are.
So what do you see as the biggest mistakes with bad buys?
Like people that are going to sell by marketing classes
and they're still coming back and they're making a bad buy
and hurting themselves or financially going bankrupt
or truly hurting themselves on a bad buy.
After coming to a school?
Yeah.
After coming to a school,
they got emotionally wrapped up in something.
Based off the phone calls that I've gotten,
they got emotionally wrapped up.
So they went, they didn't follow their bar.
They knew, they knew they blew through that stop sign.
Mm-hmm.
You know, and they'll, they'll call me and they'll admit it.
And they're like, well, you know, there's this cattle.
It's the mindset.
There were these cattle and blah, blah, blah.
And, you know, they got wrapped up in it and they bought them.
And, and so we'll redo the math.
So instead of maybe getting that $100 head profit, they got 20.
You know, so it wasn't, not everything was lost, but it was, they didn't hit their target.
When I first started doing the schools, most of the phone calls I was getting were non-buyers remorse.
You know, phone calls sound like this.
Well, Doug, there were these cows and I don't know this and that.
And, you know, and I should have, you know, and I'm like, how about you just tell me about the cows?
Like, finally, I'm like, what they weigh and what gestation and how age.
And, you know, they'd.
My wife is a therapist.
They'd finally tell me about the cows, but they were telling me about the mental fight that they were having, why they didn't buy the cows.
And then they'd tell me about the cows.
And I'm like, yeah, you should have bought the cows.
You need two phone lines.
One for Amber.
So that's why, like the curriculum you saw, you saw the curriculum with the nicknames and you're going to be sitting in this sale barn.
And like, there's going to be this cow-calf pair comes through and the cow weighs 900 pounds and blah, blah, blah.
What are you going to do?
I mean, I threw some of those deals in there because that inner voice is going to be talking, talking, talking to you.
And that auctioneer is looking at you like, I need an answer.
You're in or out.
Yes or no.
Got to go.
And then he sells them.
Like, you got to make that decision right now.
And, you know, if you haven't spent a lot of time in that environment, you're going to freeze up.
So I've thrown those examples in there and structured it the way I do to get rid of the non-buyer's remorse.
And the non-buyer's remorse phone calls have gone down.
But the ones that got wrapped up in something, it was always emotional.
That's interesting.
People will tell me, oh, sell by marketing is so great.
It takes the emotion out of it.
No, it doesn't.
We are emotional beings.
It will always still be there.
It will help control it.
But that comes back to committing.
I had a phone call earlier this year, or well, being 25.
But the guy asked me, he goes, man, he goes, how do you do that discipline thing?
I ran my stop sign.
I'm just having a hard time staying disciplined.
I'm like, are you committed to making a profit or not?
He's like, well, I'm committed to making a profit.
I said, no, you're not.
Because if you're committed, the discipline will take care of itself.
So we have a commitment issue, not a discipline issue.
You're so excited to leave with something that you're not, or to win.
Sometimes.
Sometimes you get into that auction and you're just going to win and you just can't stop bidding.
I've left auctions with an empty trailer.
And sometimes the purposeful action is to do nothing that day and go home with an empty trailer because then you didn't buy something you shouldn't have bought.
And all of there's going to be ugly words.
But that, I think people need to take note of that because you also say you should be buying back the same day.
And they take that literal.
Like short window.
Right.
Short window.
Yeah.
And so when you say, though, buy back same day, it's kind of like when we were talking about infinite banking.
You're like, yeah, but Nelson said in his book, but Nelson's book is an illustration of a big concept.
You can't take it literal because you can't do everything that Nelson illustrates in his book the way he illustrates it because you can't just have one policy.
You can't just put money in for four years.
And so they're possibly taking what you're saying literal.
So you're going, oh, okay.
Well, Doug said I got to buy back same day.
I don't think I say buy back the same day because what I want people to understand with buy sell marketing, what everybody's familiar with, you know, we're going to calculate a break even and hope to sell over that price.
Your exposure to risk is the time that you own the cattle.
With sell buy marketing, your exposure to risk is the time between the sell and the buy.
So that's, we really want to keep that short so that way you don't have that week where the market goes up 30.
Because if the market goes up 30 in seven days, that $30 could be the difference between your buy back and not.
And again, you know, the people in the Western states got some logistical issues to work through.
Those of us that live, you know, like Central Nebraska, East Man, there's any place two blacktops intersect, there's a sale.
Like there's no excuse not to make it happen if you live east of that.
I think this is my last question.
I don't know that I have any more, but I have clients of yours that I have talked to that have gone through the class and they have gone home and practiced based on past prices.
Is that something that you encourage people to do?
Yeah, absolutely.
I mean, that's, you know, that's what I did.
You know, when I went through in school, get on the dial up internet, you know, so I'm pulling up market reports that are a week old.
And that's what I would suggest using is something that's fairly current.
And man, I just started running cattle squirters like crazy.
And since it was dial up internet, what I would do is I would just change the cost of gain in the equation, run the spectrum again.
So you've been to the class, right?
I'm not big on spreadsheets.
Everybody wants a spreadsheet.
Everybody wants an app.
We got this little thing right here.
Push this pen.
Push the pen.
You got a calculator on your phone.
So there's no reason not to do this.
Thing is, what the hand does, the mind remembers.
Now, I was challenged with this once.
Well, you've probably done a million cattle squares.
So I had to do the math on that.
So from the time I took the class to now, it would mean I'd have to do over 100 cattle squares a day.
You know, I haven't done a million cattle squares.
But you don't have to do a million.
After you've done a couple hundred thousand, it becomes subconscious.
So now I can pull those market reports up on a computer screen.
And it's almost like some of those prices and weights just jump out at me and I see them.
I can see that relationship just subconsciously.
I can do it in my head quick enough.
Like I can keep up with an auctioneer at the speed of a sale.
The problem with wanting an app or anything like that on your phone is in the last three years we've had,
or in the last year, we've had three Verizon outages.
And if you're going to rely on that phone, you're dead in the water.
Now here's something else I find really cool.
So, you know, I started buying cattle 30 years ago.
You had to take a pen and a calculator into the sale barn.
And then we got calculators on our phones.
And so then I'm like, crap, everybody's got a calculator in their shirt pocket.
I lost my competitive advantage.
They weren't using the calculator on their phone.
I still had my competitive advantage.
We have these new weigh screens in the sale barns today where it will put the dollars per head
and the weight right up there on the screen.
Everybody can see it.
And I'm like, crap.
Now, everybody in the barn can see it.
I just lost my competitive advantage.
They don't even pay any attention.
Because they're not doing it.
Nobody's paying attention to those relationships.
They're just so focused on an LRP or a break even or this or that.
They just flat ignore their relationships.
I spent a lot of time talking about that in class.
I was kind of watching people as you were talking about it.
And because they've been around cattle their whole life and they're in the sale barns,
I don't think they were taking it seriously.
I'm like, are you guys paying attention to this?
Because the body language and how people are buying is just as important as the numbers
and what's happening.
And I just, they just, I don't think they pay attention.
So for people listening to this that don't understand the body language,
here's the easiest one to illustrate.
There's a guy that'll come into my hometown sale barn and they open up the gate
and they run this group of cattle in and he judges the size of them.
Oh, I'm interested in these.
And he leans forward.
And then they put the weight up on the screen and he's like,
oh, these are too heavy.
And he leans back.
But if they get that weight up on the screen, his foot starts tapping.
Okay.
Now you just projected a ton of nervous energy.
If somebody that looks suspiciously a lot like me sees nervous energy,
I'm going to run just for the fun of it, for the sport.
Okay.
Now I'm not going to say things like that to try to scare people,
but some people think the sale barn's a snake pit.
I made it my job to become the most venomous snake in the pit.
So I studied the body language.
I'll study how the tickets come in across the counter.
Do they come in through the gate?
Do they come in through the back window?
Why is there a difference?
You know, I'm watching the body language of the ring, man.
I'm watching the other buyers, you know, things like that.
So if you sit in the top row in the back, you can see all of it.
I sit in the front row now because I had to take,
especially when we're in the COVID situation,
I'm in a homeschool environment.
I got to take my daughter.
There are things on some of those buyers' phones that I didn't want her seeing.
So we had to sit in front of them so she wasn't seeing some of the things that they're scrolling on.
But I will sit in the front and off the corner.
So that way I can just sit here, put my arm over the back of my seat,
and I can still look up there and I can still see everybody.
I can still watch them.
I can see the cattle better sitting down there in the front.
So I've kind of made it my job to study a lot of stuff.
And I don't know that very many people have taken the time to do that,
but I've learned a lot from it.
And we've talked about the mindset a lot here.
Anybody that has ever gotten good at anything,
whether it's Sage Kimsey, world champion, bull rider, Michael Jordan,
you know, the Bob Proctors, the Zig Ziglars of the world,
they've all dug deep into that mindset and they figured out how to apply it to their craft.
All I did was copy what those guys did.
And so, yeah, I can read the body language.
And over the years, there's only been one cattle buyer I haven't been able to dial in.
But I've got everybody else dialed in.
I think that's so interesting.
That was my...
Forget the numbers.
That was my favorite part of the class.
Because I was like, it's so important.
And you're not seeing that when you're buying online.
You can buy online, but you're not seeing any of that.
I've heard of you there, but I've started using the click to bid button
the last couple of years just because of this, the restraints on my time.
I mean, if I wasn't doing marketing schools, I'd be at the auctions.
But you do schools and so now I got to stay home and take care of stuff.
But I've gotten in trouble.
I got to tell you this story because it's a good laugh.
But the first group of cows I bought a couple of years ago,
on Sunday, I had no intention of buying cows.
Woke up Monday morning and I told Amber, I says,
you know, these cows of this age and this gestation period are really good buy.
I think I ought to buy some.
And so what I'm doing right there is I'm breaking character,
going from all stockers to now I'm going to buy cows.
So she wasn't really sold on the idea of me switching gears like that.
She goes, okay, you buy one load.
She comes home at the end of the day and she goes, well, how'd you do?
Did you buy some cows today?
Yeah, we became one of the largest cow-calf operators in the county today.
And she's like, what happened?
And I says, well, the first group of cows I bought,
I was actually on the phone with the guy that owns the sale barn
while I was hitting the click to bid button.
And so I'm on the phone with him and they run this other group of cows in
and they ran them right through the ring straight out.
And I'm on the phone with the guy on sale barn.
And I could tell he took the phone away from his face.
And I could hear him say, yeah, he'll take them.
And then he's like, okay, Doug.
And then, you know, he's back on the phone with me.
I called the sale barn later and I wanted to recap.
And I said, I need my weight head count.
And, you know, they gave me the weight and it was like almost 70,000 pounds.
And I'm like, how could that be?
I should be close to squaring up the first load.
And they're like, well, you had this many head in the first draft you bought
and this many head.
And I'm like, oh, that group of cattle that went through
that I wasn't paying attention to online when he said, yeah, he'll take them.
They knocked them off on my buyer number.
But nobody bothered to tell me.
They went on my buyer number and I missed it.
So I'm like, well, shoot, I got to square up the second load.
So I square up the second load while I'm squaring up the second load, get cheaper.
Well, I might as well call dispatcher again and get another truck.
And so those are some of the things my wife has to deal with living with me.
Yeah, that's just a typical day.
Hey, when there's a deal, you're not turning it down.
And all of that worked out really great.
That's like telling a real estate investor, don't buy that house,
even though that's a smoking deal.
And, you know, you can flip that thing and make money.
Don't buy it.
You bring up another really good point there.
And I had this conversation with a guy on the phone last week.
I'm like, just because the math tells you it's a good trade
doesn't mean that it fits what you're trying to do.
So you don't have to do everything just totally based off those numbers.
I was like, you know, for what he was trying to do, he's like,
well, the math is showing me I should do this.
I think you need to look for other options.
Because based off what he told me over that phone call,
I'm like, that's not what you're trying to do.
Oh, that's interesting.
So the numbers can tell you something's good, but it doesn't mean it fits you.
There's a lot.
So MrCattleMaster.com, are there any schools open that are not full?
We got Tyler, Texas at the end of July.
And I think Amber told me there's like 12 or 15 spots left in that one.
Springfield, Missouri's early July.
I think she said that one's a little over half full.
And I'm almost certain that she will schedule schools in Nebraska,
you know, probably November, December.
Okay.
Any final thoughts?
I'll plug the Intel blog that I write on, Farm Progress.
I write about sell-by marketing on there every Friday, marketing schools.
And, you know, I'd say this, there's a lot of stuff floating around on YouTube
and social media and other podcasts about sell-by marketing.
It's really not sell-by.
You got to be really careful about trying to do some of that homework before you come to my school
because then I have to, you have to unlearn what you thought you learned to learn what I'm going to do.
Yeah.
I saw a real young guy out of Nevada or something.
I came, one of my clients, I was like, I have no idea who you're talking about.
Never heard of him before.
He's only been around a few years.
I was like, wow, there's a lot more people talking about it and teaching it.
Kind of like universal life insurance.
Yeah.
Like you got, you're going to have to do some due diligence and be aware of what you're learning
and ask questions and make sure you're learning it right.
There was some people been through the school, sent me a link to YouTube.
And the guy was talking about sell-by marketing.
I watched it and they're like, well, this is just like what you teach.
And I'm like, no, he skipped two really important steps, but they're so minute.
And one of them is the whole point of doing sell-by marketing.
He left out the profit.
Like, I'll just spoil it right now.
He left that out.
But some of those are so minute, they're easy to miss.
But that razor's edge might as well be a mile wide.
Yeah.
It's that little detail that makes the difference.
It's so important too.
I mean, it's just like what I do.
It's important to find the person that eats, sleeps, and breathes it, that understands it.
Because if you don't, it can be the difference between good or bad.
Yeah.
It's like I said earlier, the nerds are the ones that get good at it.
Eat, sleep, and breathe it.
Yeah.
Okay.
MrCattleMaster.com.
Thanks for coming.
Yeah.
Thanks for having us here.
You're welcome.
It was fun.
And we didn't get too crazy.
No, we didn't.
We should pat ourselves on the bed.
We've solved the other world problems outside of the podcast.
That's one thing.
I probably shouldn't say this since she's in the other room, but, you know, I'll ask my
daughter like, hey, you want to listen to Mary Jo's podcast?
She's like, I'm not in the mood for German passion right now.
Dad's like...
I know.
I can't help it.
I get excited.
That's great.
You should.
All right, you guys.
You know the drill.
Go to, if you have comments, questions, concerns, Mary Jo at WithoutTheBank.com.
If you have not gotten the book, grab the book, schedule your appointment with John or I, and
we are happy to help.
You have a fantastic rest of your day.
Thanks for listening to the Farming Without the Bank podcast.
We hope today's episode has inspired you to take control of your finances in new ways.
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