Are You Investment Worthy?

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Are You Investment Worthy?

By Chip Kemp      |      

Many of us vested in the seedstock business know that our involvement stems from a pivotal decision somewhere along the way by either ourselves, ancestors, or an influential mentor. That decision to generate and sell seedstock was often driven by the fact that value had to be added to the beef enterprise if it was to stay viable and profitable. The family farm or ranch needed more than a standard commodity could offer. Simply stated, a cow-calf operator made the call to market bulls to give their business a path forward to profitability and survival.

And this isn’t a shock. Nearly all cow/calf operators function within the commodity business structure. And sadly, recollection of basic economic principles doesn’t seem to be a high priority at present in our society. If it were, more might recall something that we learned in one of those classes. In perfectively competitive markets long-term profits force to zero. American agricultural commodities may be as close to competitive markets (present political wrangling aside) as exist. A brief refresher on this concept can be viewed at Lumen Learning.

And we know this. How many families have one or more members earning incomes off the farm? This isn’t at all new. Growing? Yes. But, not a new phenomenon. There are many resources that will show these trends. Here is just one recent snapshot in time.

So along the way, we (or a predecessor) made the decision that we had to find a different way. We had to produce a value-added product if we were going to differentiate ourselves. Many reading this chose seedstock as the value add. Makes sense. The question I have is what are we offering to our customers to give them a similar “light at the end of the tunnel”?

It is very possible to be successful in the beef business. To be very clear, I’m more optimistic about those chances than I’ve ever been. We all know many folks who find ways to add advantages to their calves so that buyers are more than willing to pay up. Maybe it is through genetic improvement, or health, or pen uniformity, or timing, etc. Or maybe it is by grabbing the reins and deciding to make cattle that will be successful in the feedyard and on the chain and then retaining ownership on those cattle as often as the market conditions dictate. Possibly, they’ve taken advantage of some direct marketing opportunities that have presented themselves in recent times. Or maybe… or maybe a whole host of things. But, most importantly those that are profitable are not sitting around waiting for others to find those revenue streams for them. They are hustling and turning over every rock. They expect their seedstock provider to do the same.

We are asking our customers, and to be frank, our kids and our grandkids to buy-in. To invest with us. We could take a non-ag, outsider's view on investing in our business. I’ll spare you the details, but I’d encourage you to take four minutes and read this perspective.  It gives the painful truth, but some value-added optimism as well. 

We all need to ask ourselves, “Is my operation investment-worthy?” If yes, then drive that home to customers and to family. And continue down the road of helping clientele leverage those situations that help add value to them. If no, then it is time for some serious conversations.

None of this is new to you. None of this is novel. So why bring up such a “pain point”? Because your survival depends upon your customers' survival. And your customers look to you to aid them in that effort. They look to you to help them provide the path forward so that their kids and grandkids can stay on that piece of dirt and raise hard-working, high character future generations that can better our world and our society. This is much less about cattle than it is about purpose and people. Want to improve the world we live in? Want to improve the world your kids live in? Add that kind of value and we all win. 




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