Opportunity Is Calling

Will You Seize It?

We have experienced a very strong run up in cattle prices in the last year. The magnitude of the increase & the short time frame that it has occurred in is unprecedented.

There are many factors that affect the price of cattle. My personal opinion is that the main factor influencing prices is the decline in cow numbers. This is the direct result of 10 years of low prices at the cow calf level.

The normal response to higher prices is to have a herd rebuilding stage. This time I think the response will be different. The higher prices this time will encourage a further herd reduction. This will occur for several reasons: One is the increasing age of our producers. Two is the fact that we have lost a generation of young producers as a direct result of BSE. Third is that there is a very low level of confidence in the cow calf sector. This also is a direct result of the BSE years. It will take 4 or 5 good years to rebuild producer confidence. I think any rebuilding will be minimal until confidence returns to the cow calf sector.

The cattle business is changing. We are living in new times. We are sailing in uncharted waters. Now is the time to bear down & manage to the very best of our ability.

Producers who sell calves (the largest number of producers) will see something like a 70% increase in income in the fall of 2014 compared to the fall of 2013. This increase in income will come from the rise in calf prices & the rise in butcher cow prices. The increase is most welcome & is badly needed as we have just come through the 10 most difficult years in the last 50 or 60 years.

We are all being presented with a wonderful opportunity to manage our businesses wisely & to benefit from our increased income. Let me give you an example. A producer with 200 cows will have about a $100,000 increase in income this year. Income will rise by over $500 per cow. Have you taken the time to figure out how much your income will rise this year?

For most of us this will be a once in a lifetime opportunity.

It would be a terrible tragedy to squander this opportunity. Now is the time to bear down & improve our management. One of the easiest things to do in good times is to let our cost of production rise. When we do this, we don’t really benefit from the higher prices. We allow someone else to benefit.

Don’s Suggestions:

1. Do a strict financial plan yourself. Make sure that most or all of your increased income becomes PROFIT.
2. Do a strict financial plan with a friend or neighbor. Make sure that most or all of your increased income becomes PROFIT.
3. If you need help hire one of our CEs to help you do a strict financial plan. Make sure that most or all of your increased income becomes PROFIT.
4. Take action now!!! Financial planning is not urgent but it is important.

I am confident in recommending our CE’s. They are all talented, motivated & knowledgeable in financial planning. All of our CE’s would like to help you be more successful.

Will the CE’s charge you? Yes, they are operating a business. They wouldn’t be much use to you if they didn’t make a profit in their own business. Will the cost of the CE be an expense?

NO!!!! It will be an investment!!!!

If you use the services of a CE you will not only plan for a profit this year you will increase your confidence, knowledge & skills. This can motivate you to plan for a profit each & every year. In my personal experience the ability & willingness to do a financial plan has made me hundreds of thousands of dollars.

Remember we are experiencing a once in a lifetime opportunity. The status quo is not acceptable. We need to improve our management so that we will benefit from the good times.

I sincerely invite you to give these ideas serious consideration.

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