Barn Talk - Why Most Cattle Ranches Fail (And Nobody In Ag Will Tell You The Truth)

Episode Date: May 24, 2026

Welcome back to Barn Talk. In today's episode, our guest is John Haskell, an accomplished rancher, business owner, and expert at turning struggling ranches around. John has spent years working on ranches across the country, building up his own herd, and helping others transform their operations from losing money to becoming truly profitable. As the founder of Ranch Right LLC, John is passionate about teaching farmers and ranchers how to understand their finances, take control of their numbers, and create long-term success for their families. In this episode, we hear about John's journey from leaving home as a teenager to working with leaders in holistic management and cattle marketing. He explains why knowing your costs is the heart of a successful operation, how non-traditional thinking can give you an edge in agriculture, and what it takes to pass on more than just assets to the next generation. Packed with insight, real-world advice, and inspiring stories, this conversation with John Haskell is not to be missed. JOIN THE BARN TALK NEWSLETTER & GET LIVE EVENT ACCESS: We're on a mission to get 10,000 subscribers, and once we do, we're hosting a live event at the barn! Sign up to get exclusive access to tickets and details.👇🏻 Help us get there: https://www.joinbarntalk.com SUBSCRIBE TO THE PODCAST ➱ https://bit.ly/3a7r3nR   SUBSCRIBE TO THIS’LL DO FARM ➱ https://bit.ly/2X8g45c  LISTEN ON: SPOTIFY ➱ https://open.spotify.com/show/3icVr4KWq4eUDl7Oy60YMY  APPLE ➱ https://podcasts.apple.com/us/podcast/barn-talk/id1574395049 Follow Behind The Scenes👇🏻 ● Barn Talk Instagram ➱ https://www.instagram.com/barntalkshow  ● Barn Talk TikTok ➱ https://bit.ly/3qciekS    ● Sawyer’s Instagram  ➱ https://bit.ly/3BtX0n4    ● Tork’s Instagram ➱ https://bit.ly/3LGZJxS ● Sawyer’s X ➱ https://x.com/SawyerWhisler  ● Tork’s X ➱ https://x.com/TorkWhisler       00:00 Supporting Barn Talk's growth 19:33 Economics of cattle farming 28:00 Understanding cattle cost and profit 32:27 Heifers vs. steers market strategy 43:41 Pandemic impacts on livestock sales 59:47 Partnering with a savvy accountant 01:09:45 Pride in American heritage 01:18:02 Focus on product over raw goods 01:24:42 Reorienting cattle business strategy 01:33:54 Profitable cattle farming methods 01:49:13 Regenerative movement and soil management 01:55:51 Balancing agriculture and environment 02:10:52 Understanding agricultural market demands 02:15:54 Meeting and learning from Wally ------------------------------- ⚠NO FINANCIAL ADVICE / DISCLAIMER⚠  The Information discussed and shared on Barn Talk is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or success for any particular purpose. The Information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. The Information on this podcast and provided from or through our content is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional, professional broker or financial advisory. Understand that you are using any and all Information available on or through this website at your own risk. RISK STATEMENT– The trading of Bitcoins, alternative cryptocurrencies, NFTs, individual stocks, etc. has potential rewards, and it also has potential risks involved. Trading may not be suitable for all people. Anyone wishing to invest should seek his or her own independent financial or professional advice. Learn more about your ad choices. Visit megaphone.fm/adchoices

All of the food we eat and much of the clothing we wear comes from plants and animals that are raised on farms. Farms are different in type, in size, and even in name. Welcome to Barn Talk. What happens at the barn stays in the barn, but not today. We're going to let it all out for you guys. Today is going to be another great guest episode. This is going to be valuable. I can tell you right now, we had dinner with this guy last night. He is going to strap some shit on y'all now.

and it is going to be value. So all that we ask is if you get any value from the show, share it out with the people that you know. We don't run ads to promote this show, guys. We don't. We, it's all on your guys's shoulders to grow this podcast. We have found it as the best way to grow a podcast is through word of mouth for you guys.

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And it's basically everything going on in rural America. We're talking about it. Tork's giving you his take on things. I'm giving you my take on things. And we just want to keep you guys in the know about what problems we're facing and what are some awesome things. happening and really turn this country around. So is there a tab on there on the newsletter where you can send cash donations, Venmo, PayPal to me?

We don't have that feature built in yet, but you know what? We might. What do you need the money for? I'm not telling you. My retirement. Oh, good. Yeah. Get that swivel coozy for the mower.

Yeah, absolutely. Well, we do have a goal with that. If we get to 10,000 newsletter subscribers, We are going to throw a live event right here at the barn on our farm and bring on all the great guests that we've had on the show, come to the event and meet them in person and have them talk and really just try to give you guys a damn good event and a lot of value if we can. And when we do that, we will definitely be having this guy.

I can tell you that right now. Yeah. You are going to be impressed with our guests today. 100%. our guest today, he has been around the block. He has worked on countless ranches doing all different types of things.

He has done turnaround projects for ranches that have been struggling and made them a success. He has a, his own herd that he is spread out across the United States doing all sorts of things. He owns a company called Ranch Right LLC, which is helping ranch right. and farmers with their financials of helping them turn their operation into a profitable and successful one. And he just, he knows his stuff, man. This is going to be a great episode.

I'm really excited for you guys to hear it. It's going to be tremendously valuable and I cannot wait. So without any further ado, let's get into it. Soir and I both get up with the same thing. I think, man, I got to get out there because Sawyer's going to piss this away. And Sawyer's like, I got to get out of there and get Dad the hell. out of this thing. I need to get dad's ass moving. Yep, got to get him going. Yeah. Because what's he, what's he doing now? What's he buying on Amazon now? What five projects has he started? Yeah. Never finish anything. Yeah. That's why I left the door of the machine shed shut so that John couldn't see the madness. Yep. The madness. Shove it all in there. Yeah. You clean like I do. Just

put it all in there and close the door. Look. Yep. We had a guess on that said, you're not really a truly a farm or a ranch if you don't have a junk pile. Yep. At least one junk pile. That's true. Oh, yeah. Yeah. Well, shit, boys. We're live. So John Haskell, welcome in Barn Talk.

Awesome. Hey, thanks to be here, guys. Yeah, no. We went out to dinner with John last night, and, man, I tell you what, you guys are in for a treat for today. I think we're going to strap some stuff on to you. So we're going to hit you with one right off the gate here. You said that 20 years ago, you worked for a profitable ranch, and at that time, you've

never seen such a thing. It completely changed your life and outlook on ranching. What does it actually look like when a ranch is believe? money and what was the moment you realized it didn't have to be that way? So the picture when you're bleeding money is almost always bad. And one of the reasons I got into finance is because it's connected to everything. You know, if you can't pay your mortgage, if you're worried about the bills that are coming in, if everything's going backwards and you're losing your parents and your grandparents' equity, you don't sleep well at night. You don't have good

relationships with your kids. You don't have good relationships in town. Like, it is just stressful beyond belief. I compare it a lot of times to your back. If you've ever, you know, if you ever hurt your back, like you can't move your fingers without touching your back, you know, and finance is the same way. If you've got money problems, it percolates into anything, everything. I had a deal years ago where I was like $100,000 overdrawn in my checking account. And I had these yearlings and some mountain ground. I was moving around. And they were real good to work with. There were about a thousand of them. And we'd take them through this rough country. And the week I was overdrawn in my account, I couldn't get those suckers to do anything. Like they were just,

run back to the road all the time and I pain in the neck the whole week. As soon as it got resolved, all of a sudden the steers acted better. They just, everything went back to be on the way it should be. And so I've found that over and over again when when I'm struggling financially, my wife and I just don't get along as well. I'm not as good a dad, that sort of thing. Yeah. So that ranch that you went to, what was the, like, what did you see there that totally shifted your whole perspective on? Yeah, the coolest thing about why they were successful and the reason I loved it so much is because anybody could do it. They knew their numbers and they understood finance and they understood how the actions they took on a daily basis affected their bank account.

It affected how profitable or not profitable they were. And it dawned on me then that literally everybody could know that. Like finance is pretty simple. It's like fifth grade math, right? Addition, subtraction, and a little bit of division. And if you actually know your numbers, there is incredible power on that. And most of us, I think, act like, you know, We're victims of the weather. We're victims of market, that sort of thing. That place proved to me by being profitable for at that time, like 20 years straight, that if you knew your numbers, you could actually do something about your profitability. And in our customers now, we see that over and over again. The people that come to work with us believe in their, in their heart of hearts that if they understand their finances,

they can do something about it. They're not just a victim to whichever way the wind blows. Yeah. Well, let's go back a little bit to, I want to get into the story. of you. I know we're going to drop some value big time on people, but your story's pretty incredible. So, but before we do that, why don't you tell everybody, because we know, but everybody, listen, doesn't, what do you do today? What's your business and what, what is, how do people find you? You bet. So a couple of things. So we run cattle around the country, custom graves with, you know, with other people. I love doing that. The thing we're most known for, though, is a company called ranch right, where we help farmers and ranchers that want to be profitable with their finances.

And the main thing we do is work on, we do three things. We make sure they know what their numbers are. And then we make sure they know what they mean, like how to read them and how to understand them. And then the final thing is what to do about it. And like I say, we work with people that want to be profitable, that want to create, you know, generational wealth, that want to build a foundation for their family that will last into the future. We started a ranch right about five years ago. We've had fantastic growth and a lot of really good interest. And we've just had some customers that have set stuff on fire. And it's been so good because I think our customers run 100% counter to everything you hear in the mainstream media about how you can't get ahead in America.

You can't get ahead in farming or ranching. Like you just, you know, everything's hopeless. And we see people, we deal with people on a regular basis that are literally buying up their neighbors places with the proceeds from agricultural operations. These aren't oil wells or somebody that's got a tech job that came back. Like, these are people that actually run cows and are doing it in such a way that they, you know, they can grow their business. They can bring their kids home. They can kind of live their dreams. And that's the funnest part about it.

It's a good time. Yeah. So ranchright.com probably. Ranchrightlc. LLC.com. Okay. That's correct. And they're on social media under the same Instagram, Facebook. I think we're on TikTok.

Yeah. sweet so you left you left home at 15 years old is not correct that's correct and you wanted to be a cowboy ran away to join the circus okay so let's let's start there just start your start your story and your journey of so so the the first part you mentioned what a ranches look like when they're not going well and that was a lot of my early experience as i'm sure you guys can imagine uh saw lots of situations that were just not going well you know people were getting divorced families weren't getting along you know the ground looked like hell the gals looked like hell we you know the the funnest some of some of the funnest memories from that are you know calving in western montana and 40 below zero in

the first week of january those sorts of things you know chipping calves out of the ice on the ground and trying to get them back into the barn while mom's trying to kill you that sort of thing um after a while of that type of thing it just became obvious that you know this probably isn't something to do for the rest of life. And I decided I wanted to go to college. And I had a really good, just lucky experience where I went to college and had an advisor who happened to be on the advisory board of the Malpi Borderlands Group, which is a group of real progressive ranchers down in the like bootheel in New Mexico, right, where Mexico, Arizona, New Mexico all come together. And he would drag me along on these things. You know, he was kind of funny. He'd be like, well,

you're a ranch kid. Come on. Let's go. So we'd pack up and drive five hours south and tour around this place. And the whole time, it's like there's grass everywhere. There's wildlife everywhere. Some of the best quail hunting I'd ever seen. You know, they had, they had cool wildlife there, like jaguars that were coming across from, you know, from old Mexico, in the New Mexico, just a neat, neat spot. And the whole time these guys are talking about how much money they're making. And I'm just like, I'm sorry. It took a few times of hearing that before it was like, you keep saying this. Like, how can that be? And that led, one thing led to another. he wound up sending me on these different deals, you know, and met a guy named Alan Savory,

who is, you know, kind of famous for bringing holistic management to the U.S., along with another guy named Sam Parsons, brought, you know, got to see those guys and then wound up going up to one of the Church of Jesus Christ to Latter-day Saints owns a big ranch in northern Utah and wound up going for like a range management meeting up there. And it was the same story. There was grass everywhere. They had a lot of cows that they were running, but they were talking about how they'd made money for at that point, like 15 or 18 years straight, some silly number. You know, it made money every year, you know. And I thought, how is this possible? So I pretty much did whatever I could to go and work there and learn their secrets.

And it was fantastic. It was a great experience. So I've learned a ton from that. And that was, you know, that's been 20. I mean, it's over 25 years ago now, 27 years ago. And just tried to suck everything I could to learn what they were doing and apply it in my own operation. And then now we really help a lot of other people do it in theirs. Yeah.

And I think what's so cool about your story is like those ranches you went to, they were kind of on the cutting edge of doing ranching differently from those two guys that kind of brought that ideology to America. And you were there getting that, getting that firsthand knowledge. Plus, wasn't there a guy that taught you how to move livestock better? Yeah, Bud Williams. So Bud Williams used to come to that ranch. So it's called the Deseret Ranch, Deseret Land and Livestock in northern Utah. And Bud used to come. And the first time I met him was like a Saturday morning and sometime in the fall

because we'd already shipped and weaned and all that. He talked crazy. I mean, just insane stuff. And I just remember listening to this. And, you know, he was an older guy at that point in his 70s probably. And I just remember thinking, this guy is either insane or he's a genius. And after listening to him for the morning, I had an opportunity that afternoon to experiment and see if what he was really talking about was right. And he was dead right.

Everything he said worked. And from that point, it was like, all right, whatever this guy says, I'm pinning my tail to that donkey because he knows what he's doing. He did a lot of stockmanship. And that's the part I got really interested in first and spent, I mean, frankly, spent decades. It's kind of like a horsemanship thing. Once you get into it, like there's no. Like there's no end to how much better you can get. And spent years trying to learn what he was teaching.

But then he also taught cattle marketing. And he was a real smart guy when it came to numbers. And you would never guess it by meeting him. But he actually traded a lot of futures contracts and that kind of thing and made a pile of money doing it. I loved to trade cattle. And the marketing that he used to teach was like feedlot marketing, right? You know, what do you buy? What do you sell?

How long do you hold them, that sort of thing? And when I first heard his stuff, he was kind of my first introduction into this world. And the same thing. You know, you first hear what he's talking about. You just think this guy, this is backwards to everything I've ever heard. And the more I experimented with it, the more it was absolutely true, you know. And the more I did it, the more money I made. And it was like, okay.

What else do I need to know? So I kept up with Bud until he died in 2012. and just every time I had an opportunity to learn more from him, I did. And I've been very lucky to have a number of mentors that had spent time with both him and also Alan Savory and Stan Parsons, kind of all through my adult career, who have kind of continued to mentor and push me and teach me the things that they know. Wally Olson is one of the biggest ones. He spent a lot of time with Bud and really learned the sell-by marketing deal. And there are a number of others.

Doug Ferguson is one that also teaches at Tina and really. Richard Williams. Richard just passed here a week or two ago. They spent, that's Bud's daughter and son-in-law. They spent time teaching it too. But Wally and I have had a good friendship over the years. We've owned a lot of cattle together. And he's been willing to just take me under his wing and, you know, tell me what a dummy I am and set me straight.

So it's been real good. Hey, thanks for sticking with us. Here's something that people don't always think about. One out of every three acres of corn that we plant in this country is planted for exports. So when trade policy goes sideways, it hits us directly. I've watched markets move on a tweet. I've watched bases just blow up over trade disputes. It matters and it matters a lot.

The Iowa Corn Checkoff invests in the U.S. Grain Council and the U.S. Beat Export Federation. And those folks are out there every single day building relationships and opening up markets in countries that want what... This episode is brought to you by L'Oreal Group. Beauty is a powerful force that moves us. That's why L'Oreal Group has built a business that is inclusive at its heart with 100% of its brands, championing diversity. With 25,000 professional opportunities for people under 30 worldwide and 54% of leading positions held by women,

diversity is a strength that helps L'Oreal Group create the best beauty products for all people. Visit L'Oreal.com to learn more. But we grow. And in 2023, corn exports alone accounted for $13 billion. dollars. That's not nothing. That's real money coming back to Iowa farms. Your corn checkoff dollar is working for you whether you know it or not. To see how it's paying off for you and to get involved, go to Iowa corn.org. Now let's get back to it. Well, let's go back a little bit for somebody that isn't, you know, isn't a rancher or hasn't had experienced ranching cattle. So what are the, what was the difference? Like when you talk about how, you know, they had all this grass and

cattle looked great, like what's kind of the foundation of that philosophy that changes how? Because a lot of people think, I mean, honestly, if you're not in it, a lot of people think, well, you got all this ground and you get a bunch of cows. And you turn them out there. And then you calf them and you wean the calves and sell the calves and then just, you know, do the same thing again next year. And it's really funny because kind of like knowing your finances, the difference between doing it really well and doing it, you know, less than well is not much. You know, it's not like there's a big rocket science gap between the two where there's some incredibly high wall. You've got to get over to get from one to the other.

The biggest thing that Alan Savery used to teach was the importance of knowing what you wanted. And I spent a lot of time early on in this deal, not understanding the fact that if, and, Stephen Covey teaches this. Stephen Covey wrote The Seven Habits of Highly Effective People, right? You start with the end in mind. So where do you want to get to? And then you build back from there. And so, for example, on that place, you know, they did a lot of rotational grazing.

And so that was a real important part of it, right? So they were alternating, you know, intervals of grazing within rest cycles, right? Allowing that grass to get up and get tall again and then coming back and grazing. And in that part of the world, we were, I want to say we were six and three quarter or seven, three quarter inches of rain of moisture a year, 80% of which came as snow when it was 40 below zero, right? So it's a high elevation mountain ranch, right? And then there was a lot of irrigated ground. There's 8,000 acres of contiguous irrigated meadows.

And if you would graze that correctly, you could not only improve the soil, you could improve the grass, you can improve the water cycle, but you also wound up with better health in your herds, you know, all kinds of other things that came along with it. And it seemed to me that we often underestimate the power of some of the really small changes. So if you take calving season as an example, on that ranch, we had a lot of crested wheatgrass that came up early in the spring. So they cabed in April. But you were calving on to green grass. And just that small change had so many other impacts on the rest of the operation. Right. So it really reduced because you're calving later than normal, reduced your need to feed hay in the wintertime, just made it easier to care.

for those cows when you need it made it so that you if you needed to in the spring you could get them to where you wanted them to be you know and maybe start grazing in a different spot you didn't always have to be like around a calving barn near the house there were just all kinds of things that came from those small changes that then that then changed everything right so made it so the outcome in the end was really different the other thing those guys would do a lot is they really tried hard not and i don't want to say they didn't feed but not to feed much uh so So they started kind of with the economics of, okay, if we're going to, if we're going to sell a calf for this much, you know, how much can we kind of afford to pay to keep the cow through the year? And what are the levers we can push on to get that cost really low?

Ultimately, in a place like that, you're not necessarily going to wind up with zero days of feed. But if you're down at 30 days of feed and everybody else is feeding for five months, you know, you're, you've got a big advantage. Right. That was the first place I was ever on, like I said, they had an 8,000 acre meadow. And that was the first place I was on where they decided they couldn't afford to own the equipment to hay it. And I thought, whoa, if you guys can't hay this meadow, what are the rest of us doing? You know, how many people own a full set of haying equipment to hay 150 acres, you know? And these were productive meadows, right?

I mean, it had garrison, we call it, but creeping meadow fox tail. It's a big, introduced, really productive grass in high cold, kind of flood irrigated type country. Kind of like Timothy, but a lot lower quality. It's like an introduced Timothy. And so, I mean, these meadows were productive, and they would either graze them or have someone else put it up and make hay. And as far as their economic analysis was concerned, it was cheaper for them to pay to have it put up. Have it custom done. Yeah.

Or to just buy hay in. depending on what the market was. And the cool thing about that over and over again, I keep learning these things. Buying hay in is one really fun one because if we think about ranching, one of the overheads are our huge cost, right? Same in farming, right? We got all these overheads.

We land being the biggest one, right? If you buy hay in, you're actually making your ranch bigger, right? If I buy in a thousand tons of hay, right? I've just added 2,000 animal units, right, to my ranch, 2,000 animal months, right? So when I do that, I'm spreading my overheads now

over a bigger, over a bigger, you know, production base, if you will. And whereas when we hay our own, not only are we, you know, we sort of don't get to graze that grass, but then we're incurring a cost to put it in the barn,

which is making it more expensive to get it into a cow and get production, right? So if we graze all of our ground, right, there's no cost of getting the grass from the cow you know, into the cow, right? Because she does that herself. And then when we buy more hay in, we increase the total capacity.

We actually have a huge economic impact on the operation. The other thing that you notice with these ranches, too, that you said last night was the not only what they were doing with their methods and how much money they were making, but also wasn't it less labor? Like the amount of guys that was needed was less too, right? Yep. So if you take, let's just say,

I mean, there are definitely numbers that are larger than this, but you know, you take six or 800 cows and put them in one group, put them in one pasture at a time, say just have them there a week and you move them every week. One guy can go check them in no time. You know, it might take you an hour because 45 minutes you're driving out there, but then once you get there, you're looking at 800 at one time. Really easy to manage those. And what you find over and over again is when you take out what I think of as the hard work that isn't productive, you cut away all that stuff that isn't really necessary in making you money. It makes it way easier to ranch.

And the places I've been on and people are shocked about this all the time, but we're often able to get it to where, hey, we work, you know, other than weaning season or critical time periods, or when there's a blizzard or something like, you know, we kind of work Monday to Friday, six to three and call it good. And most of the places I've taken over, they're working dawn till dust seven days a week. Everybody's exhausted.

It's a, you know, it's terrible. but when you cut away all the stuff you don't need to be doing that doesn't really add value to the operation, suddenly it becomes a much easier operation to run. And if you think about it, right, what is ranching? We're not doing it in farm country, right? Because if it was good country, it would be farmed, right? So that's cut out, right? We're rocks and cactus and brush and, you know, steep hillsides and everything the farmers don't want.

But the sun grows the grass, right? And rain is our irrigation. and the cow does all the work of harvesting the feed. If we try not to get too much in that process, we can keep it really simple and get a lot of work done for not very much cost. Yeah. Let's talk about sell by marketing.

Explain that philosophy for people. And you learn that from Bud. Was that correct? Correct. And you can apply this, you can apply this to pretty much any commodity business. business. Correct. And you can apply it to buy on and sell in trucks or tractors or anything you want. Yeah. Okay. So there are a couple of things about sell by marketing and people get wrapped around the axle on this a lot. So try not to make a complex, right? Just like the business of ranching, the hardest part is keeping it simple. The main thing about sell by marketing is we, we know that we can't do anything about what we paid in the past. So if I have a set of steers, let's say that I paid, you know, three bucks a pound for. And today the market is,

$2 a pound. Nobody cares what I paid, right? Nobody cares what the purchase price was four months ago when I bought them. So what we always think about is we try to stay super focused on today. We don't look at the past and we don't look into the future beyond maybe tomorrow, but we just look at today. And when I look through cattle of different types, I can say, okay, I can sell this steer that we had a minute ago for X number of dollars. What can I buy back for that? that is profitable. And I've gotten to thinking a lot about it as an inventory management system more than anything. We have things in our inventory that are relatively overvalued and things in our inventory that are relatively undervalued. And my goal is always to own something that is undervalued and convert it to something that is overvalued. Does that make sense? Yeah. Okay. So a few examples of this, when you look at like Steers for Sale in Torrington, Wyoming, or let's do Heifers, maybe a better example. Apple. If we look in the fall, right, October prices in our part of the world are usually depressed because that's when all the cattle come to the market. Right. So the first thing, a lot of sell by marketers think is, well, how do I not bring cattle to the sale when everybody else says? Right. Okay. So that's number one. The other thing is you can look through those cattle and buy the market price, you can tell what people want. Right. So if we think about it in the spring grass run or in the fall run, spring grass run, right? If you're in Kansas, everybody wants a 600 pound. calf. It's a perfect time to bring a 600 pound calf to market, but that also usually means it's

the perfect time not to be out buying 600 pound calves. And what we'll see there is in the fall, if we look at like 500, 550 pound heifers, you can almost always buy those for the same price per head as a 450 pound heifer. So I'm, let's say I'm picking up 100 pounds of gain there for zero dollars and sometimes they'll actually give you money for that trade right where a 550 pound heifer is is worth less per head than a 450 475 right if we're having the right kind of fall uh right those 475 pound heifers are perfect in our part of the world to load onto a truck and take to california you know for grass there or to take to wheat like on the southern plains okay so they pay a premium for those because they've got the feed for them uh and they can put a bunch of them

on a truck and haul them a thousand miles and the economics of that works out pretty well. That five, there are all these dead spots in cattle, right? Think about selling a 550 pound heifer. Well, you know, maybe she's not quite big enough that she's going to be able to breed on time, but maybe she's also too big that you're going to get, you know, good gains on or on wheat, that sort of thing. In the spring, think the same thing. When guys are, you know, burning hot to go to grass, a 600 pound steer will bring a premium. And oftentimes you can buy a seven or a seven, or a 750 pound steer at a big discount. There's no guarantee in this,

but I really increase the probability of me being profitable if I'm buying the discount and selling the overpriced. And the cool thing about cattle is we know how much it costs to get us, I know exactly how much it costs for me to get a 500 pound steer into a 600 pound steer. I know what it costs me to turn a 600 pound bull calf into a 750 pound steer. Right. I know how much it costs me to grow, a calf from birth to, you know, a pregnant cow and make that into a 400 pound calf. And so if we take a few of

those, if I've got a dollar a pound in a steer, for example, growing from 500 to 600 and the market's willing to pay me a dollar 50, well, that's a great trade. But there are lots of times you look at that particular spread and it's like, it costs me a dollar. I'm only going to make 75 cents. Now I have an inventory problem. What am I? I don't, that's, that's not going to work. So in my mind, I need to get out of that deal one, one way or another, and get myself into one that's actually going to pay. So that one that's only going to pay me 75 cents, we would call that steer overvalued, right? Because it costs me more to put the weight on than I'm going to get paid. And I'm going to go look for something in the market that's going to pay me $1.25, a dollar 50. We do these cutter bulls in the south. They'll pay $8.50 a pound for us to put another pound on them. And so that's a good, that's a good. That's a good. deal. We've had to go, I mean, you can pick up individual windows in the market where you'll get a hundred pound deal for 40 bucks a pound if you do it right. And again, I can, I can feed one for less than that. So it works out great. So part of it is you have to learn, people have these, people

have these, I don't know, I don't know what the right word, whether it's a paradigm or just an idea that this is how we do it. Yep. Preconceived notions. Pre-conceived notions. Pre-conceived notion. So in reality, it might be a situation if you're a cow calf guy and you've got these calves that normally you would take them and you would feed them out. You've always done that. The market could give you an opportunity where you could turn around and sell all your, all your calves and turn around and buy a different sized feeder at a discount and instead feed those and make more money than if you fed your own. Correct. Is that a, it's 100% correct. And,

A lot of people talk about sell-by marketing in the context of buying and selling and trade in stockers. And I actually like it best in the cowcalf or even in sheep in a breeding enterprise. And one of the reasons for that is my production cost is fixed, right? It costs me, let's say, $700 a year to keep a cow. Okay. So I know that I can grow a calf for $700 a year. Pretty easy math, right? if I if I can keep a heifer calf and add $700 to her and then see a big spread between that and a pregnant cow I can make another pregnant cow so we spend a lot of time often selling like a prime of her life middle age cow for you know right now that would be like $4,000 4,500 bucks okay I can buy my own or buy someone else's heifer for let's say two grand $2,200 bucks add the $700 to

of that. I've got a, you know, over a thousand dollars spread between those two. Every, every point in our production cycle, we have some seasonality to us, right? We're not like Oklahoma and Texas and the southeast, right, where they just trade cattle all the time. We have a couple of windows that we use. And if we turn out, especially into bigger grass allotments and that sort of thing, they're, they're kind of out for three months. But as far as I'm concerned, every time we come to a decision point, we basically have a buy, sell, hold type decision. And we get to weaning, for example, let's say it's October. We're going to wean our calves now, or November. We look at the market and say, okay, what is the market telling us?

Is the market telling us we should sell these calves or we should keep them? And that overvalued, undervalued is basically how it works out. So for example, if I get to the fall and like right now, it would be a great example, I can sell my heifers for $2,200 a piece, is that better or or should I put another three or 400 pounds on them and keep them all the way through the summer, what's that going to pay? And we try to stay flexible and make that decision at the time. Most of the time with heifers, they're almost always undervalued in the fall. So a lot.

I say most. I don't want to get too much into rules here. But if you really think about it, in October, heifers are undervalued, probably eight out of 10 years. It probably pays you to grow her either into a feeder or put her with a bull and make a replacement. or the great thing about putting them of the bull is you can do both, right? I can have some feeders to sell and I can create some replacements. With steers, it's usually the opposite. If we sell...

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6-6-531-2,600 to speak to an advisor. Free of charge. BetMGEM operates pursuant to an operating agreement with Eye Gaming, Ontario. All in the summer on Superior, for example, if we sell it the week in the Rockies, steers are often overvalued. We can get rid of those steers for fall, you know, sell them in the summer, ship them in the fall, and then replace with something that's going to pay us for the grass and the feed and all in the effort that we're going to put into them.

But all of that, to be able to. to do that, the one thing that you've got to have is know what your cost is. A hundred percent. That's exactly right. And that's why what we do is ranch right is so critical because you've got to be able to come back to say, what is it? Now, we can debate whether we need to know within the penny, you know, exactly how do you need to know? I think there are some really key things you've got to be super dialed in on and I think there are a bunch of things you can be kind of fuzzy on. But you've, you've got to have a good base of that. And I'm lucky in that, you know, I learned early the value. you of that and and we stay on it constantly what are those key things that you think everybody

should know and what are the things that you can be a little fuzzy on so cost to keep a cow for a year i don't think you have to know it to the penny kind of thing but you better know it probably within 10 or 20 bucks um cost to keep an animal for another day so for dock and stockers a lot of people talk cost to gain cost of gain is is important but the cost per day is actually what you can control we sometimes get into situations whether it's health or weather or, you know, animal quality where the average daily gain is actually going to change. And so if you're thinking, well, it costs me three bucks a day. So if they gain two pounds a day, it's a dollar 50. That's fine. The most important number is that three bucks a day. And then with each group, we're going to figure out what

that average daily gain is. I think you need to, so in terms of other numbers, I think you need know your return to labor. So for every dollar of labor, what is your gross profit return? We might get into some of the details. Well, that's 100% because our labor, if you're farming a ranch and your labor is not worth anything. Yeah, that's exactly right. It's all profit. Well, if you're not, yeah, that's right. If you're not profitable, it's not worth anything. That's right. And your living expense is zero. You don't figure that in there. That's exactly right. Yeah. And those are things that we get into the details of, you know, if I had to pay somebody to do it, would it cost? And the cool thing about the way we're running our livestock business now is everything's farmed out, we don't actually take care of it. So we literally have to pay for it.

And it's a bit of a disadvantage because you have to have the cash to pay for it. But the cool thing is it means you know exactly what the number is because there's a check for it. Whereas when we work for ourselves, I tell people all the time, your cost of living is probably closer to $100,000 a year than it is $60 if you have a family. And people argue against that all the time. And I've got good evidence for it. We can back it up. But if it's 100,000 a year and you're not including that, that's your opportunity cost of living. You're falling behind and you really don't know that that's what's happening. What are those fuzzy numbers that you can be a little less? Yeah. So let's go back to a couple that we need to know well. First, gross margin by enterprise.

Super important. And again, we can get into the details of that a little later. But we really need to know what our production of our cowcalf enterprise is, our stocker enterprise, our hay enterprise. And if we grow crops, right, what are the corn, corn, beans and wheat doing, you know, depending on what we're growing, we need to know for every dollar that's generated in that business, how much of it gets out, gets past direct costs and is available to pay overheads. Okay, so direct costs, if you're a farmer, right, fertilizer, chemical seed. if you're a rancher, feed, vet, you know, trucking, that sort of thing. Overheads, if we just class everything that's land or labor under overheads, that's the, you know,

that's the money we need to get out of that enterprise, if you will, and go to pay for the whole operation. Those are things we need to be super clear on it. And the reason we need to be so clear on those, I think, is we've gone down a bit of a bad road here, especially recently. Everybody in agriculture talks about the need to diversify. And I think it's Buffett who says, you know, diversification is a hedge against ignorance, right? What we really need to do is know what enterprises in our business are making money and focus on those. Most ranches, it's worse in farms, but most ranches have three to five enterprises.

And almost always what we see when people come to us is they've got one that is killing them. It is a loser and they just need to get rid of it. And as soon as you get rid of that enterprise, is better. And then if you redirect, you know, the money and time and effort you were doing on the loser enterprise and put it into the winner enterprise, it changes your profitability immensely. So you're not a fan of the philosophy of, well, my corn's worth whatever I want to make it because I feed it all to my cattle or I feed it all to my pigs. And, you know, in a good year, it's worth eight bucks a bushel. And in a bad year, well, it only is worth $2, but the cattle made the money. Yep. Correct. Not a fan. There are a lot of things we can say there. But yeah, that's the best summary. You can BS yourself all you want. And that's fine. I mean, if you love doing it and that's what you want to do and you're aware of what it costs you, you know, we have people that have enterprises that don't work that they love and they cost them hundreds of thousands of dollars a year. And if you're willing to pay $100,000 a year to do something that is the equivalent of owning a boat, right? It's like,

recreational work project. If you can afford that, it's a free country, knock yourself out. But if you're going to do that and then whine about how you can't get ahead in agriculture, I'm going to start to be not terribly sympathetic. I know people that farm recreationally, that ranch recreationally. They got the money, they can do it. I don't care. I got a neighbor. He likes to go out with his little brush hog and cut sage brush all day long. Knock yourself out. He's got a job in town that he loves and he does this for fun, right? For me, it doesn't pay. So that's, you know, ranching is my job. Like, that's what we do to support our family.

We're not doing recreational work. It's not for the experience. Correct. A couple other numbers you really need to be aware of. When we flip over to the balance sheet side, you've got to know your working capital. Working capital is your current assets minus your current liabilities. So how much do I have in cash, in stocker cattle, in feed? And then what do I have on my line of credit?

Usually credit card, a couple other things that are kind of, short-term debt that turns over quickly. Working capital is critically important because it is our ability to pay our bills every week, every month, however they come. And I've told people multiple times, and they believe me after I've done it a few times, you can recognize somebody in town that's working capital is bad. You can see it from a mile away. They are chronically stressed. They are under the gun all the time because every bill that comes in is just one more thing that they can't quite make. You know, they're robbing Peter to pay Paul. They're shuffling around. It's a hard one. Another ratio that we pay a lot of attention to is your debt coverage ratio. We see lots of

cases where profitable operations cannot service the debt that they have. And if you don't have enough margin in your operating profitability to service your debt on an annual basis, it doesn't, unlike working capital, it doesn't wear you down quite as fast. It takes longer. It's not once. But once or twice a year, you're a sorry sucker. you know, because you're getting hammered. And if you've got, you know, most of us set up ag payments, right? So they come out in November, December, January. You want to ruin Christmas more than anything?

So I have a $300,000 payment you can't make right around the 15th of December. You know, that really ruins the holidays. And again, we see operations where they might have, let's say, 100,000 in a mortgage payment and they're profitable at $90,000. Well, you think, boy, an operation's got a $90,000 profit. That's fantastic. debt is not part of that profit calculation, right? Profit is an after-tax and an after-profit calculation. So if you can't make those payments, you're putting yourself in a really bad situation.

We pay a lot of attention to how many days of, and let's go back to working capital for a minute. We do that also usually in a days calculation. So when you subtract your current liabilities from your current asset, you come up with a dollar number. So let's say I've got 300,000 in stocker cattle and I've got a $200,000 line of credit. In that simple case, I would have $100,000 in working capital. Well, in many operations, that's fine. That number is okay. But if Walmart has $100,000 in working capital, they're in big trouble. So we want to scale that to the size of the operation.

And what we do is we take the total expenses for the year and we divide that by 365. And we call that your burn rate. And we scale your working capital by your burn. rate to come up with your working capital days. Okay. And so if I have less than 30 days of working capital, so let's say in that example, I've got 100,000 in working capital. Let's say it costs me 50,000 a year to run the ranch, which is a completely ridiculous

number. I would, let's say it cost me, sorry, 36,500 to run the ranch. So I divide that by 365. That's $1,000 a day. My $100,000 in working capital, right, is to convert it. days, I divide the 100,000 by a thousand. I have 100 days. That makes sense. Okay. So in that case, that's a pretty good number. If we're, if we're in the 120 to 180 days of working capital, a lot of operations are in a good place. If we're less than 30 days of working capital,

it's tight. And you are like one little accident away from something not working, right? You get in a load of calves that have mycoplasma. You have a, you have a customer check bounce, a few of those things. Now all of a sudden you're really at risk of getting in trouble. You can run with 30 days of working capital. But like so many things in our industry, we've got to have insurance, right? We want to have some padding between us and bad things. That working capital is a great buffer. The same with our debt coverage ratio. We're looking for a debt coverage ratio that's two or more. So if I've got profitability at the end of the year, that's $500,000 and I've got a $250,000 payment, I'm in great shape. Because I could my profitability could be cut in half and I can still make the payment right and too many people operate on this very very narrow margin and I find it especially ironic in the last few years where we've had so many really significant quote unquote disasters I've been calling them gray swans lately like COVID right like the Holcomb fire uh like the Ukraine war uh you know on and on and on where we have these surprises like we were we had a bunch of cattle to sell in March of 2020

Ogalala livestock and we were locked out of the barn. I couldn't go in the barn. How do you have a livestock sale when you don't allow people in the barn? You know, that doesn't make any sense. And like that was just, what, five, six years ago. And we act like we forget about that, right? I knew people that had fat cattle that were delivering in April of 2020. They couldn't deliver.

You know, I know you saw this in hogs and chickens, right? Where there were guys, they weren't there guys killing hogs and chickens just to get rid of them? Because you couldn't afford to keep feeding them. So these things happen. And in my mind, there are a couple of good buffers against the unexpected. One is insurance itself, but the other is just cash. You don't hear that many cases of people that go broke with a bunch of money in the bank. Yeah, 100%.

Good. So I think those cover most of the ones that we pay a lot of attention to. You asked about the fuzzy ones. Individual animal performance. Like what is exactly my average daily gain? Like, I'm good with a ballpark number. Yeah. There are a whole bunch of the things that we tend to spend the most time on, but I think are not the most helpful.

Yeah, let's go in on that because there's kind of two thoughts that we talked about. One was passing on a generational ranch or farm. Yes. We all focus on the stuff. Yes. The equipment. The land. You know, the bins, whatever, right?

The assets. And the assets. We always focus on that. And that's the most important thing to pass on to people. But you think it's the knowledge that you're passing on on to the next generation. Because we have these generational farms where they focus on the stuff, they don't focus on the knowledge,

and then the next generation repeats the same mistakes the previous generation made or could do worse mistakes. Make worse. Make worse mistakes. But also you're saying, too, like, we don't focus enough on running our farms and ranches like business. A lot of people get in the weeds of daily gain and the performance of the animal and, you know, what's coming up on the yield monitor versus we should be spending just as much time. Yep. On the financial side.

So talk about those two things a little bit. You bet. So, and these come from, you know, specific events from my family history, from ones I've seen with friends all around. So we all have this, right? How many of our parents teach us the business? side of farm and ranch management, right? We all learn about the production side, right? What all of us want to do is kids, but drive tractors and move cows and rope calves and, you know, that's the fun stuff, right? That's how we get hooked. And what most of us don't ever learn, and sometimes we don't learn it because our parents don't know it either,

but usually our grandparents did. Like, what are the business decisions that we need to make? What are the, how do we make those decisions, right? So marketing is a perfect example. Until I met Bud, never really even thought about how you would make that marketing decision. Right? It was just, well, it's fall. So that's when it's going to snow soon. That's when you sell the calves. Like it just makes perfect sense, right?

We've had this wonderful green summer. The calves are big. Somebody wants to buy them. Great. When you really get into thinking about how those decisions are made, what you find out is there is a huge amount of power in the decision itself and how the decision is made. So I used to joke with a crew of guys that worked for me.

You know, they'd get upset about losing a calf or something. And then it's like, man, any screw up that you make today, I can make 10 times bigger in the office, right? Because my marketing decisions, my management decisions there have a much, much greater impact on the actual outcome than does keeping one more calf alive. Not arguing against good animal husbandry, good land management, like those things definitely matter. But when we look at the actual impact at the end, those aren't the things that we see that drive this huge spread between the most profitable operations. on the ones that are just barely getting by. And back to your point, we're set up with taxes, we're set up with all kinds of things

to manage the transition of assets to the next generation. And I think about this all the time with my kids because at this stage of life, it would be much easier for me to hand my kid $100 than it is to teach them $100 worth of stuff. We talked about the example last night. I'm teaching all three of them, so seven, five, and four to wash the dishes after dinner.

It's a mess. It is pure chaos. There is water flying everywhere. There's soap in everybody's hair. The dishes still have chunks of stuff stuck to them. But if I want to turn those suckers into productive people that are going to go out into the world and provide value to others, that's the kind of thing they have to learn how to do. And my oldest, man, roping as she is on fire with cattle and roping them and branding them and that's just all about it. And I'm thrilled for her there.

But she's also got to understand the cost of interest, right? She's also got to understand how to figure should she take on another lease. Should she cut a bail a hay? Should she feed those animals or not? Those are the things that actually make a difference. So take the example we talked about earlier. Those steers, one set of them would pay you $1.50 per pound a gain. One pays you $75 and your cost is a dollar.

If I'm doing that with a thousand steers and I'm doing it repeatedly 365 days a year and it's a 75% spread, that's a lot of money. that's real money like that's the kind of money that allows me to either pay my mortgage or not that's the kind of money that allows me to you know have money to take a nice vacation or not right that's the kind of money that allows me to go buy the neighbor's place or not those are things I think that are that are super important um go ahead sorry no you're good did I did I answer that question you yeah you did you did it phenomenal and the simple truth is amongst a lot of families, amongst a lot of operations, it is a lot easier to have a conversation about yield, about trading equipment, about all those things than it is to have about the numbers.

And there are a lot of families where it's not between one generation of the next, it's between husband and wife. Oh, yeah. And, you know, in our family, my parents never discussed anything with money with the kids. Nothing. And- But back this up. I don't know about your family. I mean, if my parents were to whip out and start talking about money, it would be like them talking about their sex life to kids. You know what I mean? I mean, it is such a taboo. We just have so much around this. I heard all the time as a kid, things we don't talk about in public, right? Religion, politics, money. Yep. Like, I think that's totally backwards. It is totally backwards. Especially with our kids, because our kids come into the world and money is something that has, I don't want to overdo it in the sense of like, you know, money's the most important thing.

That's not true. But man, if you manage your money well, if you are a good steward, which is what we're often asked to do or not, the difference in outcome is massive. Yeah. And the time, the world we live in today, what people have to understand with that is. if you aren't going to teach the next generation about money, society is going to teach them. It's not just society. It's going to be AOC or Kamala Harris or one of these other idiots that are going to teach them about.

Well, they're going to be constantly bombarded with. Money is easy to get. Yep. Do what feels good. Get this card. Buy this thing. Worry about how to pay for it later. I mean, that's your, that's, if you don't put a foundation

under the next generation of how interest works, why you actually have to have money to pay for things, why you shouldn't buy things on credit. And if you are going to use credit, when you use it, you know. And there's a generation, a guy that went to country school with my dad and only went to the eighth grade, simple guy, very successful farmer of the generation, where if you just worked harder than everybody, you would be successful.

But his, like a lot of his analogies were so simple, and he would just, his boys wanted to buy a new tractor. And they wanted to finance it. And he got so pissed about it. And he's like, I just don't understand it. He's like, you only borrow money to make money. Yep. He goes, you don't borrow money to spend money. Well, we live in a society that you literally borrow money to spend money every day.

Yeah. It's just, so those conversations are important. They are really important. I think your analogy of just people would rather hand their kids $100 than teach them $100 worth of knowledge. I mean, that hits it pretty hard. But we talked last night, too, about living expense. How many ranches or farms you work with or people you work with where they say their living expense is this. But when you actually dive into numbers, you're like, no, your living expense is this.

Like, how common is that? Oh, it's everywhere. And the big thing, and, you know, take us as an example. sure you guys do the same, right? The farm pays for some stuff and you pay for some stuff, you know? And a lot of times when we're not keeping track of that, it's just like, it just kind of grows. It's just there. I mean, we, we have a lot, you know, unlike somebody with a W-2 job, right, we have a lot of stuff that's provided by the business that helps, that reduces our cost to living, but it's still a real cost. And I, you know, more and more of the

belief that if you don't pay for those kinds of things, like pay for them with real, you know, money, you totally don't understand what it actually costs. Yeah. The way they do things like the Social Security and Medicaid, you know, FICA taxes out of your check, right? Why does that work so well out of your check? Because they just take it out. You never see it. If people had to actually write a check for that after they got a paycheck, like we'd be an armed revolt in this country, you know what I mean? It's a huge amount of money. Any time you sort of sneak that stuff by yourself, you know, you may be doing it for tax reasons or all kinds of other things. That's fine.

but you almost wind up lying to yourself in the end. And that's the most dangerous thing you can do. The stories we tell ourselves. Yeah, exactly. And there's a great quote about, you know, for every, for every stupid thing you do, there's a fantastic justification. And one of the things that's become really clear to me over the years is that if I force myself to, like, explain to somebody why I'm doing something, most of the time, by the time it's about a third of the way out of my mouth, I'm thinking, man, this sounded a lot better inside my head than it does outside. in the real world. Absolutely.

So let's go back just a little bit. So you became a cowboy, got put on these ranches, learned so many great things about how to run a ranch better and more efficiently and also how to move herds and cattle the best you possibly could. Then at the same time, you were building your own herd. Is that correct? Correct. Okay.

So you got to that ranch. You're building your herd on the side. what was the next jump in your career? Because it's pretty damn interesting what you ended up doing. And I want to kind of get into that. Basically, you were launching ranches, helping ranchers get back to being profitable, right? Yeah. So turnaround projects became super interesting to me. Like, can you? Because it's the way to, I'm a fairly simple person on the sense of you can tell me whatever you want, but does it really work? And can I make it? work in the real world and can I make money from it, right? So could you take a ranch that was failing using what I had learned, you know, from all these people and actually make places work? So turnaround projects became fascinating to me. And I did a bunch of them in a row. They were a lot of fun. They don't all work. I'll just say that. I do not have 100% batting average, but it, but they, but they work a lot. And it's amazing how implementing these things that Bud

taught that the ranching for profit school teaches like, it will take a range. that is going in the hole and reverse course pretty quickly and get them up and making money. And a lot of times that transition can happen in six months. Sometimes it takes a year. It depends on the production cycle. But works for ranches, works for feed lots. Like it works. And the fun part was being able to kind of travel around the different parts of the country

and put it in action and see it work. And so that just built my conviction for our own deal and what we built over the years of we just need to keep doing this. The fun thing is each one of those things, you sort of learn a different lesson. And especially the ones that don't work. Like, all right, there's a reason always why it doesn't work. And usually it's the people. But occasionally there are other things that are hard at it. And so you just, you know, keep figuring this out and how to do it and how to do it.

And it's allowed us to grow our deal, you know, a lot. Yeah. What I love about your journey and your story is you are when you are like the definition of a practitioner. like you have been there, done that. You have experienced ranching in all the ways you possibly could. You've been building your herd at the same time. You went to all these different types of ranches and basically turned them around or didn't. I mean, at your peak, because if I understand right, this was before ranch right,

but it was after you had been working on that ranch. Yeah, there was some overlap with some of those other ranches. but yeah, it was basically in that period. How long of a time period were you turning around ranches? That was about a 10-12-year period. And at your peak, how many ranches were you working with at that time? Well, those were all one at a time. So those were all one at a time because it was, you know, do the management of the ranch.

Yeah, like move there, the whole deal. You'd basically, you'd basically like work in a bit, like you would be working in different businesses this whole time. One after the other. Yeah. Yep. And the great thing, the great thing about the cowboy life is there's a, a real opportunity to move regularly if you want it. So lots of cowboys move around and, and it's,

it's fun to see different places in different parts of the country, that sort of thing. So I was going to say, could you talk about, if you want to disclose and you, it can be anonymous, but a launch, a ranch, a ranch that you launch? I'd have to keep those private. Okay. Yeah. When when people hear me talk about them as a turnaround project, they don't usually like it. Yeah. My wife, my wife talks about me. like I'm a turn around. Yeah, well, that's same. Not complete.

And I'm thankful for that, but some people don't appreciate it, which is funny. Yeah. Yeah. What made, okay, so what made you pivot away from that? So I got married, got married in 2016 to a wonderful gal from Texas. We met in Wyoming, started having kids, and we had our first kid, and we're expecting our second. And she kind of said, you know, Kay Cowboy, this moving from house to house every year is a lot

of fun. but maybe maybe we should take a different course and we could stay in one place. And it happened to be it. You really like the area we were living in a northern Wyoming. And anyway, long story short, that was on a Wednesday before Thanksgiving. And she said, you know, it's funny, all these places have exactly the same problem. And you know how to solve that problem. Why deal with all the other stuff about the day-to-day management?

And she just totally ruined Thanksgiving because it was like, man, I dropped the bomb on you. Oh, man. Yeah, totally. So here I am, you know, deep in thought. whole Thanksgiving weekend like, how would that work? And we emerged from that and about, it was around December, January time, decided to call about 10 people and say, hey, I've got this idea. I'd like to try it. Would you be willing to experiment? I'll do the first quarter of 2021 for free. These are all ranchos. These are all ranchers that I knew. And, you know, and,

and see what happens at the end of Q1. And nine took me up on it. And at the end of Q1, it was like, this is awesome. What do we got to do more? You know, what do we have to do more of it? And then it's hilarious because it's like, I don't know. Like, how is this going to work? I was very lucky in that I'd, I'd partnered with a guy named Walter Lynn as a CPA at Illinois. He'd been exposed to Alan Savory and Stan Parsons in the, I'll see, in the 80s even.

It was a long time ago. And he was an accountant. And he took what they were teaching about managerial accounting, which is, you know, accounting that is oriented towards decision making, not towards tax. in ag and he basically figured out how to hack quickbooks to get it to generate the right kind of reports so people could actually see what their gross margins were by enterprise so people could understand you know what was costing of money what was making a money uh people could really see how the business was working because the tax code the way we do it and the way most accounting

is done uh you know i don't know about you guys but my goal is not to pay a lot of taxes i want I want to keep a lot of money, but I don't necessarily want it to pay taxes on it. So that doesn't necessarily give you a good window into what's going on. The other part of it that's super critical is taxes are all almost always cash based. Right. So how much money is deposited in my account? How much money comes out of my account? The important thing in a livestock business is that a huge amount of the value is stored in animals.

Okay. And so the production, the economic effect of the production of those animals oftentimes dwarfs the cash, right? If I keep all my heifers, right, that's a big increase in my herd size that never shows up in the bank account and I'm never taxed on, right? Rightfully so, because there's no cash. And cash isn't making it. Cash is stagnant. Correct. So in an operation, you want to keep cash deployed.

Correct. You want to have enough that you have insurance, right? You need to keep some buffer between you and the unexpected. But yeah, you want your money invested. And when your money is invested in stuff and it's invested in live animals that grow, right? or crops that grow, you invest this amount, but you expect to get out this amount, right? So that part, oh, and one other thing with that, the market swings that we see, and now is one of them. We're on the livestock side.

We're in a run-up, right? In the row crop and grain world, we're in a corn anyway. We're in a real down cycle. The market changes in the inventory value often also dwarf my cash flow. right so uh cowherds you know you can have your cowherd increase or decrease in value by 50% in a single year there are a lot of things it would be hard to increase or decrease my cash by 50% in a single year does that make sense but the but the inventory value do that right because the goofballs in chicago makes some decision trump sends out a tweet like all of a sudden the steers i've got the we're worth 3300

bucks or now we're 2,500 bucks or you know those things happen and like the trump tweet deal is a We were buying, we were buying cutter bulls on the East Coast for $2,200 ahead the day before the tweet and the day of the tweet. And the rest of that week, we bought them for $1,500 ahead, right? That's a big, that was a huge benefit for us. Yeah. But it was a real hit for the guys that were selling them. Yep. Right.

So when we have an inventory that is as volatile as it is and has as much impact on our bottom line as it does, we have to track that. and we have to do it as part of the financials of the operation. Now, we use a mark-to-market system that is very similar. I love to tell people this. It's very similar to Enron, if you've ever heard of that little company. They got in some trouble a few years ago for fraud. That was a different kind of accounting. Yes, that indeed was.

Very creative. That was a different kind of creative accounting, yes. But they were lying. They were dishonest about things. But what they were trying to do was to credit themselves for sales on the stuff they owned even if they hadn't sold. Well, that's not exactly honest. But what we see is that four years ago, for example, a bread cow in our part of the world was worth 1,200 bucks.

Well, right now, she's worth three times that much, right? So I am not putting her on my books now at $3,600 to inflate my books. I'm putting her on my books at $3,600. So I make a better decision based on the fact that now she's worth $3,600, not $1,200. And let's go back to sell by marketing a little bit. This is a great example. uh four years ago you could buy a pregnant cow or even a pair out of billings or torrington for about $1,200 at a you know this was a kind of a bad part of the market but a 600 pound heifer cost

$900 well it cost me $700 to turn that 600 pound heifer into a pregnant heifer right and so that would be 900 plus 700 would be $1,600 or I could just buy the pregnant cow for $1,200. Does that make sense? So it made no, it would make no sense at that time in the market to buy heifers and put them with a bull. Just go buy the cow. If you're going to buy them, right? And the same with my own heifers, right? If I'm raising my own heifers and turning them into, I am producing. This spring, denim gets a softer, lighter update.

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We're buying heifer calves for $2, $2, $2,300, say $23 for easy math. Add 700 to that. Now we're at $3,000, right? I've got a $1,300 bonus I get paid for doing that. That's worth doing. I'll darn sure put a bull with effort for $1,300 extra dollars. Yeah. Does that make sense? Yeah, that makes total sense. I think we hit a couple of things there, but this also is the, back to your question about what are we teaching our kids. How many of us teach our kids marketing? Yeah. Right. In the farming world, right? Grain marketing is a big, complex deal. How many of us teach our kids how to do that? And that's even,

before you get into hedging and contracts and all the stuff that really gets complex in my mind. So you got those first 10 or those first nine. Yep. They loved Q1. Yep. You were like, all right, I got something here. Yep. So what is, like, what is ranch right doing?

What are you all doing today? Yeah. With, how did the business evolve? What do you, how many, how many ranches or farms you're working with? What are you doing for them? So we're growing along at a pretty good clip. We've slowed our growth the last couple of years. intentionally because we've been trying to refine our process and become better, you know,

serve our customers better. But basically what happened is at first my idea was, I will hand people good financials and then they will go off into the world and be very profitable and successful. And of course, what happens the minute you hand somebody a set of financials and I've worked hard on this. So I'm pretty proud of it. Like I'm all puffed up. Like this is the best thing ever. You hand it to them and they're like, yeah. What's this mean? What do I do with this? Thanks. Appreciate it. And then they like put it on a shelf and go do what they were going to do anyway. You know, like, ah, that's not. So the first thing that had to happen is we had to teach people how to read them. Like, what does this mean? If I give you a P&L and a balance sheet and a

cash flow, it's all great that you have that. And you can take it to your bank, right? And your bank loves it and your tax guy loves it. But knowing what it means is step one. So we now spend a lot of time. We do a couple webinars a month that are open to the public. We do a lot of stuff on social media. we do the podcast because we're trying to teach people what their financials mean. And then the next piece after we taught people, and this is a couple of year evolution, right? Then after we taught people how to read their financials and what they mean in a financial sense, then the next thing was, well, how do I take that into an operation? And that's where we're really uniquely situated because our whole teams, we've got about 20 people now. We just hired a couple more.

We will be hiring again in the fall. Our people are farmers and ranchers first, right? I'm not trained as an accountant formally, right? I was trained on the job. It's basically the same with all of our people. They know farming, they know ranching, and now they know finance. And so because they have that combination, we're able as a team to say, okay, you've got, let's see your working capital is bad or your gross margin and enterprise is bad.

Like, let's think through what do we do about that. Most accountants are going to say, well, this is great for taxes because you don't, you know, you don't own any taxes. Well, that's not where we need to be, right? I want to have a horrendous profit problem and make my tax guy's job just as hard as it possibly can be because he doesn't know how he's going to get rid of the tax liability. Does that make sense? Yep. So what we, what the progression was we started by just giving people financials. Then we went to giving them the financials and teaching them about it. And now we spend a

tremendous amount of time doing strategy, doing business tactics, looking at the operation, looking at other investments, other pathways forward. That's sort of, you know, strategic planning. I'd say strategic planning as a oxymoron, but long-term planning, if you will, to really decide what should they be doing so that they are creating and keeping the most amount of wealth possible that's compatible with what they want to be doing in their life. Yeah. Does that make sense? Yeah.

And last night, you, and you kind of mentioned it earlier in the podcast already, but the why behind why you're doing what you're doing, I thought was really cool. And I know you have the why the business of why you want to help people, but it's also the kind of the political thing that you said. Can you touch on that a little bit? You bet. So the first level thing, right, just the fact that this is so, that is relatively easy and that I think most ranchers could be successful financially is important. Right. So that's the basis of the service we provide. But for me personally, having grown up in the greatest country in the world, in the history of mankind, you know, my grandfather served at poor harbor, right? I'm the first. male in my family that wasn't in the military. Every single one of my family members fought and, you know, some of them died for this country and what it stands for. When we look back at the history of our country, our founding fathers had a profound vision of what this country could be. And it's

unbelievable that it's actually turned out that way, right? And we live in this cesspool of people that want to complain and tell us about how hard it is. And it's just not right. Like, we have more opportunities than anybody does. And when I look at the cultural war that we're fighting in America right now. Frankly, farmers and ranchers, and I think like first generation immigrants are the people who have the greatest possibility of saving America from itself at this point, saving us from the whiners and the victims and everybody else who just says how hard it is and all they want to do is complain. And we all have the pot and I'm proof of it. And so are a bunch of people we work with. Like, the American dream is alive and well, but you better get up and take hold

of it and figure out what you need to do because as we've talked about hard work isn't enough that's not the key uh you can work really hard make 12 dollars an hour doing whatever but if you are smart and figure out what to do and do it a bunch you can be incredibly successful and we're surrounded by people that have done that all the time and we constantly dismiss it as like oh it's unfair you know they had some sort of advantage and every time we do that i think we we sort of give ourselves an excuse not to be successful. And I just think we're totally BSing ourselves. It's just completely wrong. So my personal political crusade is if we are going to save America at this point, it has to be by people like us that are going to get up and work hard and do a great job and

say, no, all this whining and complaining is wrong. If you're not successful, it's on you. Now, there are people that have real disadvantages, right? I've got a friend who's handicapped, right? I've got another friend that's got a kid with Down syndrome. Like, there are people, there really are people that can't take care of themselves, right? Those are, those are exceptions, you know, but we have, I know plenty of people that are, you know, young, able-bodied, perfectly able to do stuff and they sit home because their anxiety doesn't let them go to like that. That's garbage. There's none of that. That's real. Yeah. I, uh, and I feel like, you know, the mindset of ag right now, especially. 100%. It is, it is, it is very doom and gloom. Yep. But you, you, you've seen it. I mean, you've,

you've turned around ranches. You work with ranches every day. You can make real money farming and ranching and ranching. And you believe that. Because there's a lot of people that look at ranching and farming now as this is a tax shelter. Like this is a really great place for a tax shelter. It doesn't make a lot of money, but I love doing it. But you think this is a worthy enterprise that can make serious money. 100%. And here's one I'll add to it. Wyoming, Montana, Utah, Nevada. There are all these people that have this idea that, man, it was so much easier in the 20th century when these guys came out and built these big ranches that became, you know, legacy ranches, Texas, same thing. Do you really think in 1860 it was freaking easier to live in Wyoming than it is now? Like, no way. Access to capital was more difficult.

I mean, just the everyday survive. We didn't have the kind of long underwear we even have now. You know what I mean? Yeah. Everything we have now is better and easier than it was when my grandparents. were in the dust bowl in Kansas. You know what I mean? Like we have every opportunity afforded to us in the world,

and yet we still figure out a way to complain. Ranching was an incredibly good business to build generational wealth in the 19th century. It is an incredibly good business to build wealth in the 20th century, and it is in the 21st century. It is a great business. There's no other business where your inventory multiplies itself. Yeah. Right?

There's no other business where sunshine and rain do the majority of, the work, right? I mean, it's just, I'm not saying it's not hard. I mean, there are a whole bunch of challenges to it and lots of people don't do it well, but the fact that they're not successful is not because you can't do it. And this is a place where I think the exceptions prove the rule. We see people amongst our customers that are wildly profitable, like profitable ways, even I'm like, whoa, we need to double check that number because it looks a little high. And we check them and oftentimes like, nope, that's actually the right number. That is super cool.

You talk about this all the time about we're in a different era of agriculture. Grandpa, it was always, it was in the era of you work harder. Yeah. You stay up later. You get up earlier. You're going to make more money and your farm's going to be successful. It's no longer like that. No, right?

You have to, now it is about the management. Well, it's about the financials and it's about knowing your cost. because they farmed in a generation where the limiting factor was labor, because everything was labor intensive. Correct. So that was the metric by, were you going to get anything done? Yep. And the only way you're going to get it done was by labor.

So if you could, if you could work longer, work harder, have more kids, you know, whatever. and today the labor is so automated. There's so little of it that it's not an important part of your balance sheet. It is much more important costs and how you use your capital. Just like your analogy of the people that don't own that don't make any hay. They have all that ground. They don't make any hay. And the reason they don't is because they figured out that most years, and somebody will say, well, that's not true because this year or that year,

yeah, in 10 years, there'll be two years that they're going to be at a disadvantage buying hay. But over the long term, the market is going to give them an opportunity that they're going to be way ahead by not owning all that equipment and not having to supply that labor to make hay in the summer. So here's an interesting little thing to add to that. When we look at the cost of ranching, the primary costs are land, labor, and depreciation. Those are often the three biggest costs, not necessarily in that order, but sometimes in that order. Depreciation, the biggest danger of that is that you don't write a check for it. And so just like your FICA taxes, if you're a W-2 employee, right, you just turn that over because you never see it.

If you have a $150,000 tractor and it's losing value every year and you're not using that loss in value as a cost in your business explicitly. So in a cost of your hay production, grain production, whatever, it just happens and you don't really pay attention to it. And then all of a sudden it's like, oh, crap, we got to, you know, I got 10,000 hours on this tractor. I got to get a new one. Yeah. And then it's a shock to everybody. And we're, and we act like we're surprised. Well, that's been coming for years.

You didn't just get 10,000 hours on a tractor. Like, we put it on there. Yeah. So those are super important things. And the more we have that isn't, you know, quantified or written down. down. And it's not, I'm not saying that, you know, only the things that you can write down matter, but there are so many things that don't get written down that do matter that we better be, we better be very aware of those. And one last thing that I think is worth reiterating is

your customers that are successful and are profitable, these are not people that are raising niche cattle or specialty market. They're not doing direct consumer. They're not vertically integrating. These are people that are raising a commodity. Correct. And I think that's a point that people need to hear. Need to hear is because we get this.

Ag today is constantly bombarded with this idea that, well, the farmer's the guy that pays retail on both sides and sells everything wholesale. And the commodity, you can't make money in commodities. Well, you can. You just have to be smart about it. Yeah, I liked your idea when we talked last night about vertical integration and just your thought process on that. Yeah. So go on that. Yeah. Touch on that. So a couple of quick things about that that I think are neat. From the time I was a teenager, Western Montana is a lot of logging, right? And they would talk all the time for farmers and ranchers. Like you can't sell raw goods. You've got to sell a finished product because that, you know, instead of selling a log, you should be selling a cabinet or, you know, something like that.

And that was the way to be profitable. And extension on all kinds of people still push this about that's the, you know, the vertical integration is the only way to profitability. Adam Smith in the 19th century, right, he's the famous kind of the father of a lot of modern economic theory, talked about the power of specialization. And he has an example and I'm not going to remember the details exactly. You can look it up online, but he used a manufacturing process where they made straight pins in England.

Straight pins like the kind of, you buy a nice shirt, you know, you get those pins. one person, if I remember right, could make one pin a day. And I believe it was an 18 stage process. And if they converted from one person doing all 18 stages to 18 people, each doing just one stage, they didn't make 18 pins a day. They made like 10,000 pins a day. And I remember the number, but it was so off the charts big. Like every time I write it and use it like in a talk or something, I have to like check.

Do I have the decimal? You know, that's common in the right place there because it just, specialization really increased productivity. And I hear farmers and ranchers all the time, cow calf guys, especially, you know, we all complain about the packers and how they're screwing us and blah,

blah, blah. I don't know if every of you have delved into the packing business. I know you've played in the direct consumer business. Like, it's a hard business. And we do work with some direct to consumer people, but we got the reputation for a while as the guys who got people out of the direct consumer business and back into commodities.

because over and over again, if you are good at commodities and you know commodities, there's a ton of money to be made there. And it's a much less risky business than selling to a final customer. The other thing that comes up with this all the time that people don't understand is there is a cost of time. And if I'm if it's going to, if I'm doing a birth to plate type direct to consumer thing, which I think is kind of what you were doing, right? How long did it take you to get a stake into a customer's hands and then, cash the check. I mean, we can be talking 40 months. Yeah, right? I mean, let's just say it's three years. Well, that could be incredibly profitable. But if it takes you three years to get to a check, most businesses don't go bankrupt because they're not profitable. They go bankrupt because

they run out of cash, right? And then the opposite is also true. You can run a very unprofitable dairy for a long time because you get a check every two weeks, right? And I learned early in my business interest, if you will, the value of cash flow. The cash flow is where it's at because I can get myself through a lot of troubles if there's another check coming in the door next week. Right? Whereas if I have to wait 365 days till the next check, I'm probably going to starve to death between now and that. Yeah. And so all of these things over and over again, that again, the beautiful thing about commodity markets is they're so liquid. Like, I can sell a calf any day of the week, right? And I mean, you can do the same with corn, right? Is there ever a day when you can't all

corn to somebody and sell it to them. You may not like the price. I mean, the logistics may be kind of bad, but like you can sell commodities all the time. If I, if I want to finish a 1,300 pound steer on grass and at 1100 pounds we get a drought or a fire and now I don't have the grass, what's my option with that calf? Like, I'm stuck. I have an animal that nobody really wants because they're heavily discounted if I sell them back into like a feedlot. And other grass finishers are kind of already full, they've got their own thing going on, they don't want my 11-under-pound calf. So now I've just put this huge risk right in the middle of my process that could cost me dearly. If it works perfectly, it might work.

But if something goes wrong, now I've got a disaster. And one of the things I think a lot about in my risk management approach is, yeah, this is the best case. But let's make sure we check out the worst case. Because if those two things are right next to each other, like take Breeden Heffers as an example. I might breed a heifer and turn her into a $4,300 pregnant heifer, or I might turn her into a $3,000 feeder heifer. I'm good either way, right? I can live in both of those situations, but if I might have a $3,000 animal to slaughter, or I might have now a steeply discounted animal to slaughter or a dead animal or

something like that, that's a huge difference in those outcomes. I need to manage that so that my less desirable outcome is a lot closer to my, my good outcome, as opposed to having those super far apart. Yeah. Yeah. Totally makes sense. Okay. Let's, let's, can we, can we take a time out? I got to pee.

100%. All right. So we're back. John, I want to ask you about the solutions that nobody talks about. So with all your experience, you've, you've kind of ranched all over the country. You have cows. The western part of the West. Western anyway.

Yeah. you kind of know a different way of life than we do here. A lot of our audience, row crop guys, we're spread across all of ag, but with the clients, with the customers you work with, what you've seen, what are some unique things that people are doing in agriculture today that doesn't get talked about enough? That most, if people knew more about these methods, they'd make their farm more profitable. They'd make their ranch more profitable. What are those things? They're almost always exactly the opposite of what you usually hear.

My good friend Wally Olson, one of the first books Bud ever gave him was called The Art of Contrary Thinking. And so Warren Buffett talks about the same kind of thing, right? When everybody else is running, you should be walking. And when they're walking, you should be running. And I'd like to joke that also in the opposite direction, right? So there are a lot of things that we hear about in the cow business. I'll start there, such as, you know, we, We're developing these herds and paying a lot of attention to genetics.

And we're doing everything to focus on quality and longevity and production. And interestingly enough, it's not exactly that the opposite of that is true. You know, you don't want to have a bunch of just junk cattle. But it's amazing how much just good enough cattle will get done and be incredibly profitable. The longevity thing, I was interested in that for a long time, worked for a number of people that were really interested in getting cows to stay in the herd for a really long period of time. The first time I put a 21-year-old cow on a truck because that was the first time she missed a calf was pretty amazing. And I'm like, wow, we're really doing something here.

What we found, of course, is that that doesn't really impact profitability at all. And the way we, you know, Wally's taught me this and we fought over this for years while he was kind of figuring it out. And I finally figured out what he was saying was right is we're managing our herd so that we're bringing in heifers, either bringing them in or buying them in, and allowing those to appreciate over the first couple years of their life while they're generating cash flow through calf production. But then we've reoriented the business so that we're a female business. And so we're selling bread cows at the prime of their life. And my wife likes to kind of tease about the, it's teasing now because she understands it. But originally she didn't get it. Like we just got this gal to where

we want her. Like she's the perfect cow. And that's, when you sell her. Like, that doesn't make any sense. And it's like, yeah, it doesn't because she's worth more to somebody else and she is to us. And we know the secret of how to make another one, right? We've got the factory. And our factory is designed for producing females. So the reorientation in my mind of a livestock business.

And you can do this with sheep, too, to where instead of the main product being calves, the main product is prime of their life bred females that go on to work for other people and fantastic citizens, right? They just are very productive for their next owner. But that only works if you know your costs. Correct way, correct. Because if you know, good at raising heifers and yes, calving heifers. If you know that you can sell your bread heifer for $4,200 and you know that you can make a new one for $2,700, then it makes sense all day long. And it doesn't matter that you can get a cow that's going to go for 21 years. Yep. So this is, this is what you do on your personal.

Yeah. On our cowcalf thing, this is our strategy. Okay. And it's not exactly the same every year because like I said, excuse me, a couple years ago, effort calves were $900 and bread cows work 12. So we change strategy when that happens. But that is rare. That's probably a two or three out of 10 year type deal.

So that would be an example, right? So we hear all this stuff in the, in the, you know, popular press about longevity, longevity, longevity. And really it's like, man, it's great if she's, longevity for the next guy, but I'm not interested in that in my herd. And if I, if I own a herd of cows where I never make an old cow, that's a really good thing. So take this as an example of this. Wally's got this thing. He calls the cow bell curve. It's, he claims it's his only innovation in life. And if you don't know Wally Olson, he's the greatest

guy in the world, you need to look him up. But if you buy a heifer calf and you get her pregnant and you, and you raise her up to where she's a good, you know, three, four, five, six-year-old cow, right? She goes up. in value that whole time. Excuse me. Then after that, even if she's pregnant, she starts declining in value until the point that she becomes an open cow, at which point she's almost always worth very close to what she was worth as a 500 pound calf.

Right. So a cull cow, now, cold cows are quite high. Well, heifer calves are quite high, right? They kind of move in parallel to each other. And they go through this big spike in the middle where they really increase in value through the period of their life. Well, if the production of that cow is great, right? That cash flow allows me to run my operation, but the most profitable operations capitalize on that cash flow and they capitalize and capture

the appreciation in that cow through the course of her life. So I've almost doubled my income streams. Right now I actually have two income streams because I have the calves that are an income stream, but then I have the appreciating cow. And if you're in the United States, Canada doesn't allow this, but if you're in the U.S., we are also allowed to depreciate cows like a fixed asset. And we have, you know, various forms of accelerated depreciation, right, where we can adjust the schedule we depreciate things, capital assets on, right, to sort of maximize our, or minimize our tax liability, right? And what's fascinating about that is there are two places where I know this can happen, and it's basically real estate and livestock, where I can have an asset

that is going up in value while depreciating it on my taxes. And if you want to tell me that the deck is stacked against agriculture and it's unfair and all that stuff, like you can go bark up a rope because the microwave salesman can't do that. He doesn't get to depreciate his microwaves and on his taxes while they're increasing in value while sitting in the warehouse, right? They're usually going down in value in the warehouse. And he gets to deduct them at time of sale as a cost of goods expense, right? So this is really important for cow calf people to understand.

And if they will look at, let's say there are two or three times a year where they could make a decision. If they will look at each of those decisions with kind of a go or no go type approach, it would really be good. So I've got, you know, it's the fall. I've got a 500 pound calf that I'm weaning off my cow. Should I sell? Should I keep? Right. Those are effectively the two decisions.

you can be incredibly profitable. There are some problems with mixing tax years and carrying maybe two calf crops. Those are all solvable problems. Don't sweat that too much. But we can get ourselves in a situation where the one other thing. I'm sorry, with this orienting towards selling pregnant females, when I sell a pregnant cow, and I've owned her, especially if I purchased her as a heifer, I get taxed at capital gains rates.

Okay, so I actually, when I keep all my heifers and I sell, my primary product is bread cows, my tax rate is capital gains. My steers are taxed at ordinary income tax rates, right, which are generally higher tax rates and I have to pay self-employment tax on top of that. So there's a 13.5% additional tax on those. I don't pay self-employment when I sell breeding stock. assuming at Volvo safety is not a feature it's our purpose rigorous crash testing decades of learning from real accidents innovations that help prevent accidents before they happen and help protect you when they occur going above and beyond industry standards a vision of zero collisions Volvo's legacy revolves around you because safety is about helping to keep you and everyone

around you safe for life learn more at volvocars.caps.ca.ca.com I've followed the rules of the IRS with cows. You have to own them for two years, blah, blah, blah. But there's some specifics of that. But I can simultaneously increase my income, decrease my tax bill, and increase my cash flow while managing an asset base that is growing. Yeah, and actually be more profitable. Correct. Yeah.

Right. Profit is better. Cash flow is better. Tax bills. Now, that's one of those deals. You know, you got the, you can have it. That's the sexiest thing I've ever heard. Yeah.

It is because, yeah, no shit. That's unlike the analogy of you can have it fast, good, or what's the last one? Fast, good, or cheap. But you can't have all three. Well, that deal sounds like you can have all three. Yeah, just keep talking dirty to us, John. Yeah. Let's keep going.

So that's kind of number one, right? That's kind of the first thing that probably not a lot of people talk about. Yep. It's not popular. Correct. What about the custom grazing side and cover crops? and what that whole world. Good.

Great question. So let's switch over to the farm side. So that's cowcalf in the livestock. We can go into all kinds of specifics about, you know, sheep and stockers. There are more of those examples. They're all, you know, they're all, I'm not going to say they're along that line, but the intellectual part is kind of the same. So when we come to the farm deal, you know, right now for a couple of years,

the row crop thing has been horrendous, right? We don't see a lot of plans for, we didn't see a lot of plans for 2025. and we don't see a lot of plans for 2026 that include farming and being profitable, right? I mean, it's just been a bloodbath. And people are losing a ton of equity with it. Yet, at the same time, we have customers. We have two types of customers in the farm world that are killing it and they are doing incredibly well.

One, we probably don't need to go into very much, but it's organic. We did a podcast episode with one of our organic alfalfa growers. He's been doing it quite a while. He makes great money. and he's making great money even when, you know, in our area, we've had good rainfall. So hay is cheap. Like it's easy. I'm not going to say it's easy, but he's killing him, whereas most aren't.

In the farm world, we've seen a lot of benefit by guys converting to one of two things, either a cover crop that is also a forage crop that they can graze in between their, you know, primary cash crop or just complete, excuse me, or just converting to. forage crops entirely. And there's a guy we've talked about, lives north of you guys here in Iowa. We deal with a number of them in Kansas. We've got one in Canada that they switch over. They start with the no-till deal and they get into that. And then they get a little deeper into cover crops and then they get into cover crops plus the grazing. And then some of them just finally quit the farming, you know, classic farming all together and go to straight forage crops with grazing. And what we see is that that adds a ton of money per acre. Those guys are very profitable

even now, right? And they're making that work because either they own cattle, which is the most profitable option that they run on their own cover crops, or they bring in outside and have somebody pay them, you know, by the day, by the pound to run those. And the productivity, you know, this part of the world, the productivity you guys see is astronomical. And the number of grazing days per acre that you can get here is astronomical. And the neat thing is if you if you take kind of that middle situation where you run a cash crop and then you put a cover crop on afterwards and graze it, you often see an increase in your cash crop production, right? Because you're providing a really good fertilizer back in the whole soil. But then, you know, if you can just add $65 an acre, how much does that help you make

your rent payment, right? There are some infrastructure requirements, right? There's some things that have to happen in order to be able to do that. But putting an animal back out on that land is incredibly valuable. And as a grazer, we put a lot of animals. I've gotten really interested in the last few years in more and more cover crop grazing. A few years ago, we started doing it in Nebraska. And what we saw is that for basically a dollar 50 a day, we could gain anywhere from a pound eight to two pounds plus in November, December, January, maybe even February, which are our most expensive months, right? Because we're cold and covered and snow. And normally, you'd be haying them. Oh, yeah. We'd be feeding them. Right. So it might be a two or three dollar a day cost, right, to get

garbage gains, right? I mean, if it's calves and you're just feeding them hay for, let's say, two bucks a day, you might be getting three quarters of a pound. Well, if I can put them on cover crops for a dollar 50 or two bucks and get two pounds a day, like that's fantastic. And if I think about it from a turnover standpoint, so if we think about profitability, there are a couple ways to increase profitability. One of them is turnover, right? Just doing more units. If my animals, instead of gaining three pounds, excuse me, three quarters of a pound a day are gaining, let's just say a pound and a half, I've literally doubled my turnover, right? I can make one more trade during the year. If I'm trading those calves, like in a 200 pound range throughout the year. Does that

makes sense? Like it just brings me that much closer to like one more cycle of the system. Unlike crops, right? If we increase our annual daily gain, we increase our turnover. It's real hard to do. Crops, you do it just through increasing yield, right? But with calves, I could just sell one more group a little earlier and buy one back and have

one more opportunity to profit on another group of calves. Does that answer your question? That answers my question. Yeah, I mean, that's almost like, I mean, it's just kind of another way, really, of doing what Jason Mock's doing where he's growing three crops in two years. Yep.

You're getting, if you do that rotation where as soon as you harvest that crop, you're seeding it and you get it established in October and then you grace at November, December, possibly January. And there are guys that are really pushing the limits with this that I think are awesome. And the biggest one that I see that's become my favorite. And again, it's my favorite because it's like a win-win, right? It works out super well for me as a livestock owner and it works out really well for the farmer. Okay. Is they do either like a wide row corn or they fly on seed. But one way or another, they get that seed in the ground before they ever harvest the corn.

The corn basically shades it down, but it'll germinate. You know, let's say it's turnips or something underneath there. It'll germinate and just kind of hang out under that shade canopy. And then as soon as you cut off the corn, that thing's ready to roll. You know, you might cut it off and then, you know, if it's a pivot or whatever, take a quick irrigation turn. bang, that stuff is up and growing. And within days, it goes from just being that stunted little hanging out turnup to all of a sudden now you've got a lot of forage within just a few weeks. And for us where our growing season is short, we got to be fast.

We can't screw around. I think you guys get a little more leeway on it. But we got to get after it. What kind of a stocking rate? I know this varies a lot. But Midwest, if you have an established cover crop and you're going to put animals on there. I'm not the guy for this. I was just trying to think what kind of a stocking rate.

It is very variable, but I mean, we see, again, you guys are really productive, right? I mean, we see numbers that are, they're high. And compared to what, you know, we're, uh, where I live right now is not 100 cow per acre, but where we moved from is, sorry, 100 acres per cow, you know, and then I come out here and it's like, I don't even get the numbers like they're, they're backwards. There's no way they can be right. I think that'd be good shock value. Just put one cow per, for hundred acres.

Yeah. Just put her out there with a collar and let everybody wonder, what the hell are they? Yeah. Yeah. You'll have a mess before you know it. Yeah. Okay. But again, there are guys that do this.

And Tina and Amos Troester, they do that up. What was the name of the town? You guys knew the town. Garnavillo. Yeah, Garnavillo. They run TA cattle and covers. And they do it on their own place. And they do a bunch of custom application for other people.

They do a cool job. And the neat thing about it is it's really spread in their local area because it works for their customers, right? They're providing a ton of value for people. And those people are seeing positive impact on the crop. They're seeing positive impact on their bottom line. Like, it's a win-win-type deal. Yeah, I want to talk about that part. The collaborative, the collaboration. Yep. Because I feel like right now in ag, we need more farmers to collaborate and come together. And both parties could have a win-win. Yep. What, I mean, what are, yeah, what's your overall stance on that? How do you see that working for a guy like, because I don't know if you want to disclose this,

we can cut it out if not, but you have cattle across the country, right? And are you collaborative, collaborating with people? 100%. Okay. So how, explain that. How is that work? So this is perfect. And I'm going to tell you where I came from and I'm going to tell you where I'm at. My parents are the, you can't count on other people to do it right type. And it doesn't mean they're mean to other people or anything like that. But if you want something done right, you do it yourself. Right. That's just how it was. my grandparents same way like self-reliance independence like we do it from soup to nuts right it's the whole thing uh what i've found and going back like that adam smith thing about specialization is i'm actually way better off if i get somebody else who's an expert in their thing to do their thing and then i'll do

what i'm an expert in and that makes both of us more productive so i'm no farmer i'm a little hard on equipment i'm not i'm not good at repairing things like i'm kind of an embarrassment to my they're like it's just a bad it's a bad situation but there are people that really know farming and know how to grow stuff and I know how to do livestock and most of the time what we've found especially the last two generations right we don't have livestock on these farms anymore all these all these Midwest and Upper Midwest and Great Plains places all had integrated you know crops and livestock right don't have that anymore so there are a lot of farm guys that they don't know the front end of the back end of a cow they're great mechanics fantastic welders they're good of getting seed to come up

out of the ground. They're really good at fertilizer and chemical and that sort of thing, but they're not good with livestock. So what, I mean, the answer is not to say, well, I'm a farmer. So I'm just going to I'm going to do all this myself and I'm going to enter into a market I don't know anything about. I'm going to make it all happen. Instead, just what you're saying, which is partner up, find somebody that knows livestock and has the ability to do the management. And let's get together and put our heads together and see what we can come up with that's better for both of us. I get paid on selling the livestock that are gaining weight and you get paid, you know, from me having them on your place and feed them.

And it is one of those places, whereas George W. Bush like to say, the pie gets higher. Like, it's a better deal for both of us than if we try to run that gauntlet by ourselves. Again, I think this is a super important principle. And I'm sad because, again, this is another piece of what's happened in America, right? We've just become more and more distant from each other, right? where our communities are not as strong, right? We've been more isolated. We try to do everything ourselves.

One of the greatest traditions we have in the Western U.S. is branding season where we all come together and brand. And it's a good opportunity to just get to know each other better, to work together and to have a nice time, you know. Too bad that we don't do more things where we share equipment, right, where we share skill sets, where we divide those things. And sometimes it's, you know, just lack of knowledge, but sometimes it's pride and something maybe a little more negative where it's like,

well, I don't want Joe over here looking around in my stuff. You don't want me opening the door to this back barn here and finding out what's really inside. Right, right. So those things, again, I just think that's a place where the cool thing is the younger generation. So you had Taylor Moyer on. He's a friend. You know, young guys like him talk that way, right?

They want to work together. They don't want to do it all themselves. My grandparents, my grandparents are wonderful people. but their influence in that way has faded. Where it's like, no, don't be that way. Collaborate with people. We see options all the time where we can layer enterprises on the same piece of real estate, the same mortgage payment.

We can layer those enterprises and have somebody else do the majority of the work and we can benefit financially because they need access, right? And we need cash. And so it's a great trade. The land trust thing that he was talking about with you guys, perfect example, right? Yeah. That guy, Nick, I've met him, super neat guy. But I mean, he does all the hard work. I don't have the skills to build an app and get people like, that's not, I have no interest in that. I have no skill in that. My wife's the social one. Like she's the one, I'm known around town as Brittany's wife. You know, that's just how I like, I don't, I hang out in the office and play on my computer. That's kind of my. So, so those are the, those are the skill sets other people bring. You know, you think about Nick DeCastro's skill set, him bringing that to your place for, for 20 percent, I think. think, or 25% of the total, like, that's an awesome value. Like, good deal. So I think as we get smarter about these things, we're going to just see more and more opportunities. And I think as

we sort of let our guard down a little bit and get open to what the possibilities really are, I think we'll see that there's a whole world there that we've been just missing out on. Yeah. Another thing we talked about last night, and this kind of, we're switching gears a little bit, but it's kind of on the same subject, unless I'm missing another method that you think should be talked about. I think that's a good start. But real quickly, let's let's, let's, uh, wrap that up with. We have the opportunity to have a lot of layers in our business. Layers, meaning like cake layers, right? Too often people get sucked into diversification that is not, uh, I'll just say complimentary. So you guys run hogs, right? If you started running chickens,

it's like a whole other business, right? The deal you're doing, And again, I don't know if you want to talk about that, but the deal you're doing with your separator, like that's the exact same business. You're just getting more value out of it. Right. When I run a cow calf herd, I have the, I have, there's a bunch of different businesses in a cow calf herd, right? I got cows. I got steers. I got heifers. I got bulls. I got, you know, just keep rolling down that thing. Anytime I can have that kind of enterprise where there's opportunity for a lot of diversity and layers in that that doesn't make my life more complex. that's good. When we start adding complexity, now we've just made our life more difficult. We might make more money, but man, we've made things harder. Like a direct to consumer meat business. Exactly. Right. I mean, just think of all that, you know, what do we hear? Well, now we need a freezer, right? Now I need a website. Now we need an email campaign. And, you know, again, I don't know anything about that stuff. I don't know what you knew when you got started. You know more than I do because you're interested in this kind of stuff. But it's hard. Like, that's its own thing. And if you're going to walk around, and talk about how bad the packers have it and how they're screwing us. And they may be screwing us. I'm agnostic on that, but I'll tell you what, they do a job that I'm not willing to do. And when I look at what the HR person and a packing plant has to deal with, like no interest. Thank you.

When I look at that capital costs of getting a packing plant started, no interest, right? Those are things that if those guys want to do it, I'm thrilled for them. And I'm thrilled that they are willing to pay me cash for me to bring a product to them at the end. Okay. So to switch gears, we talked about, I want to get your overall thoughts on agriculture as far as you have the regenerative guys that say our way of doing things is the way that we should all do. We need to get America agriculture, American agricultural, agriculture back to a localized food system. And everybody should do regenerative methods. And then you have the conventional guys that are like, screw you. We're doing it this way. We want to sell. My dad's done it this way. My entire life. My grandpa did it. My entire life. I'm not changing. Piss on it. I'm staying the same. I don't want to hear what you have to say. Well, and it's, you know, I'm equipped. I'm equipped. I have, you know, six, 200,000 bushel bins and a leg. I'm not going to grow 10 different things that I all need to keep separate. And I'm not going to shop back out my combine between this. crop and that crop. Yeah. I mean, it has its... Oh, yeah. There's, there is, there's two worlds of agriculture we find ourselves in. And I, I think dad and I both are at the belief of, I think both sides have some good ideas. Yep, agreed. But I think both sides sometimes get a little too extreme with their viewpoint on

things and saying that this is the broad brush, everybody should do it this way on both sides. So I wanted to get your two cents in your experience you work with a lot of ranchers a lot of farmers you've got some guys that have come from the Joel Salton ideology you've got guys that have grown up doing conventional conventional their whole life what what is your stance on things yeah so i'll just say i'm i'm into what works and i'm i'm a simple man when it comes to that if if somebody's making money doing what they're doing and they like doing it i'm i'm 100% in their corner like let's do that i think just like you said, these two sides get way off in the weeds about stuff they don't need to. I should preface all this by saying, I'm probably the most anti-environmentalist person you've ever met.

You know, in the 80s and 90s, Rush Limbaugh used to talk about environmental wackos. And I was always interested in, well, you know, but we do a lot of good conservation stuff. And we can, like that's after working with a bunch of those people over the years through lawsuits and all kinds of other things on public lands, I'm out. the global warming thing is total BS. There's a whole bunch of that that's just garbage. And I think it needs to be relegated to the garbage. Take guys like Paul Ehrlich that were big in the environmental movement. Everything they predicted that was going to happen has never happened.

The world has not caved in. The end of the world is not coming in that way. I mean, there may be other things that happen, right? But there is no environmental apocalypse. Like, that's just all garbage. So I'll preface by saying that. That said. And the regenerative movement often embraces a lot of these environmental things as kind of justification for their existence.

And some of those things are, while not correct in terms of world apocalypse like the global warming, people talk about, they're not necessarily wrong. So if we are losing soil, right, or we're not managing our organic matter in the soil, it does impact our cost of operating. it impacts our resistance to drought and that sort of thing, and it does impact our productivity. So when we, you know, generally what we find is that good management practices have multiple benefits, right? Kind of the same way that good financial management can have good, you know, sort of profitability, cash, and tax impacts. And those multiple benefits often come out in different ways for different people. What we wind up seeing, and you mentioned the Joel Salatin thing, we also get a lot of people that come to us from an organization called Understanding Act. And I know the guys at understanding ag.

Personally, they're super good guys. They have a real cause about soil health that they push. And I like it. It's a cool deal that they work on. The problem is so many people get what I'll say sort of sucked into that deal and they go down one side of it. And it really leads them to a bad place. So, you know, well, what's the purpose? Why do you have this ranch?

Like, well, we want to manage the soil and we want to, you know, create a healthy, blah, blah, blah, some environmental ecosystem type thing. And if they're doing that and not paying attention to what actually pays, you can go broke doing all the good conservation practices, right? And it's true in farming too, right? You can do all the right stuff for Ducks Unlimited and everybody else and still go broke, right? So this is where I'm practical and say, I'm thrilled to do that for Ducks Unlimited or whoever else,

but it's got to work for me and it's got to help me pay my bills because that's the important part in the bottom line. And what we see is that, you know, take grazing guys that are like, well, you should move your cows six times a day. Like, I've tried that multiple times. There are guys for whom it works. It doesn't work for me. I'm perfectly content to move my cows every three to seven days. That seems like it works.

And sometimes every month kind of depending on the season and the type of terrain and all that sort of thing. I think we need to be super pragmatic about the practices that we implement and we talk about. And one thing that's been a lot of fun for us seeing behind the scenes of. so many businesses is we get to see what works, you know, and we get to see it often dozens of times. So I've become a bit of a podcast skeptic for the reason that I, especially in the regenerative space, I hear all kinds of people talking about how great X, Y, and Z is, but we've seen kind of behind the scenes and it's like, it doesn't really pay. That makes sense? Yeah. So, so that, that makes me worry sometimes because we're oftentimes promoting things and we're not giving the whole picture.

Now, that doesn't mean that there isn't a bunch of good stuff in there, too. And I think there's a lot to be learned there. So when I think about like no-till and some of those other, you know, what we might think of as regenerative practices, there are a lot of places where that works really well. And when that's the case, then do it all you want. There are a number of reasons to argue why we need conventional agriculture, right? And one is just the volume of food. I think when we look back, there are a lot of people who look back on the green revolution and just say,

oh my goodness, that was the worst thing ever. Like, that's a little polyanish, because if we look at our cost of food and we look at how healthy we really are, I mean, our biggest health problem is obesity. It's not starvation, right? It's not that we're working too hard. It's that we're too fat because we have too much and we sit around too much. Have you seen that the guy, his name's Neil deGrasi, Dyson.

Is that right? He has a great clip where he's talking about life expectancy. Yep. And that pretty much has proven out that for most of recorded history, the average life span was like 35 years. And then from the Renaissance to like the 1900s, it went up by two years. Yep. And then he says, and these people.

We're breathing clean air. Yep. They were eating organic. They were drinking spring water. Yep. I mean, and I think that's important for people. No glyphosate in that deal. Yeah, none of that.

None of that. Two years. And then from the time we modernized pretty much everything, our life expectancy has gone up. Now, granted, to say there's no problems. I'm not saying that. I'm not saying that.

Yeah. We just had Zach Lane talking on. The state of Iowa has a huge problem. There's problems. However, to throw the whole thing out and say, we got to start over. No, it's just the facts are the facts. Yeah. So. And, you know, what I like about Joel Salton, what I respect about him is I think his movement is pro-American. 100%. He wants independence. He's pushing freedom. He wants people to make a living farming.

Yep. And he's for promoting agriculture for more people to get involved and localize the food system. I'm all about that. Yep. But a lot of times I find with those guys is they broad brush agriculture and say, my way or the highway. And that's where I get annoyed with it. I'm with you 100%. Yeah.

I hate that. And if we're going to get in and be down on the mouth on each other, that's what we don't need to do. Yeah. We're all pulling for the same thing. And we've got different methods. You know, I've got different ways to do it. I'm with you. I had a chance of this winter to spend some time with Joel Sal.

And we spoke at a deal in South Dakota together. That guy is cool. Now, we have some different philosophies about how we do things, but it's so clear to me that it comes from different experience. You know what I mean? He has an experience and a skill set that is really impressive. And I have a different one. And I work with people that have different skill sets. And so that's a place where, you know, the difference is pretty obvious.

But as far as his sincerity about his love for country, his love for the Constitution, his desire for us to, you know, be good stewards and good free people. it's 100% that's exactly where he's coming from and like you say i can respect that all day long yeah that's a great thing um and and let me back up just a minute because i don't want to sound like i'm running down regenerative agriculture and holistic management and those types of things because those have been huge benefits for me i just think that there are lots of places where we go too far and it's true the other way right you know we we have a problem in in some river systems you know in the Midwest, right? Where it's like, well, this is not only bad for farmers,

but it's bad for the environment in general. I am a big believer, though, that we are going to fix those things. You know what I mean? And it doesn't need to happen with a bunch of environmentalist dollars, and it doesn't need to happen with a bunch of government intervention. We need to give people a power to solve those problems at home, because I think they will. And I think we've proven over and over again that that's what happens.

We have progressed as people an incredible amount. right look at the the quality of life and the and the comfort that i enjoy compared to my grandparents born in 1903 it's not even the same and all these people who want to talk about how hard it is and how bad it is like that's ridiculous tell that to this the widow who's like the you know Mormon pioneer widow is crossing the planes pulling a handcart right i mean no way there's no way her life was easier or better than mine yeah i i think she probably loved what she did and is thankful for the experience, et cetera, but I'll just say I'm pretty thankful I don't have to live that experience today. That's not where I want. When we originally talked about your why and how it's

on us as farmers and ranchers, and I think just entrepreneurs, I think it's on us to turn this thing around. And, you know, that same mission is a guy I follow Andy Fersela. I don't know if you know him, but he's out of St. Louis, Missouri. He's from St. Louis, building in St. Louis, has one of the biggest recognizable, I would say, health brands out there today. And his whole mission and his brand is behind that one thing. It's on us. It's our obligation as American people. People died for us, fought for us to have the freedom that we have. And it's on us as entrepreneurs, farmers, ranchers, people working for themselves that are actually going to make the change for a better America. And like, man, I think that's so true. Like, I think that that is

100% so true. So I love that. I love that message 100%. It's on us to make something happen. And extreme ownership is like, nobody's coming to save you at the end of the day. Nobody's coming to save you. Real quick, you've seen the movie Saving Private Ryan. Of course. The last part of that movie. Oh, I know. Where he stands there and says, was my life worth it? Yeah.

Mm-hmm. Like, what else is there? Yeah. I mean, look at the line. of our ancestors, like, look at what they did for us. Look at what they built for us. Yeah. Look at where we sit right now. Is our life worth it? Yeah. If I'm sitting for three hours a day, scrolling on TikTok, like, is that worth it? Did those people suffer for that? Like, man, I don't know. Yeah. That seems like we're pushing it a little. Yeah. I would say. And I mean, I mean, that's, that is the one thing about being a farm, a generational farm or generational business kid or ranch kid is, I think it's so important to know your family story.

Yep. Because we've said it on here a million times. My grandpa fought in World War II. My other grandpa fought in Vietnam. Yeah. Like, I know those stories. Yep. Therefore, when I think I have a hard day, it ain't shit compared to what they had to go through, you know. And it's my obligation. I have the liberty and I have the freedom and I didn't have to get drafted to go fight a war that I probably didn't want to go fight. I have all these tools available to me that I never had. When you don't have that, when you don't know that family story or you don't know the

history of America, you're not going to feel that weight. You're not going to feel that obligation. But we need more people to feel that obligation. We just do. Let me add one more thing to it because this gets really interesting in the multi-generational land business. I do also think there's a place where we should be careful about that weight. We see a lot of people that are in situations where they have a tremendous opportunity to change their situation because of a city has grown up around their family farmer ranch.

My family, you know, and yours too, right, a part of it came from Germany to the U.S., right? They gave up what they had there and came here. Part of it came from England and came here, right? I don't think I want my children and their children's children to be locked into an acreage as much as I want them locked in on an ideal. Our German ancestors moved here for a better opportunity and got rid of all they had. There may be a time for each of us when we need to do that same type of move. Does that make sense? So for example, we've got a, he's a friend, a customer, I grazed cows with him.

he's got data centers and what's the other thing like amazon distribution deals popping up all over his family farm is worth like a hundred times what it was just a couple years ago and he spent a lot of time wrestling with oh my goodness i have this family legacy this is my grandparents place you know blah blah blah and yet it's not the same place it was when the grandparents were there it's not even the same place when his parents were there and i and shortly after his grandmother died, he had a discussion with his mother that gave him a tremendous amount of peace, which was, if we were to say sell this place and move somewhere a little more agriculture friendly, you know, would that be a disappointment to the grandparents or would they

be proud of that? And I think we want to think about that very carefully because this comes back to this being tied to the asset too much. Sometimes we're so focused on the asset, we forget about what might have been the actual vision that our grandparents had, which is not necessarily us being locked into their dream, right, but us continuing to pursue further dreams, right? We want to not just do what they were doing. We want to stand on their shoulders and get to the next place, right? What they've built for us is a ladder. And I think if we don't climb that ladder and look for the opportunity to put another

one up for future generations, I think we're missing something. Amen. That's awesome. Yeah, no, that's, that's a great perspective. And that's hard, man, because, you know, you're tied to the land. Oh, yeah. A hundred percent. That's, and I don't want to discount that either. Yeah. I mean, when we have a tie to a place like that, it is incredibly powerful. But sometimes the place changes, right? My uncle and aunt ranched in Southern California. Don't mind saying 150 years ago, that was a very different place. And it is today. For sure. Like, it's not that suitable for what they were doing. Yeah. Uh, And so there's a reason to make those changes. But I think we do that carefully. And I think we want to have that.

The legacy in my mind is a lot about the vision, right? It's a lot about the striving, right? It's a lot about the building. It's not necessarily about preservation or sort of, you know, keeping things locked together. Mm-hmm. I wanted to talk to you about your journey or your recent, I guess, workshop that you went to, Alex Ramosey. Yeah, yeah. Because I'm a Hermose guy. Everybody knows I'm a

Hermosie guy. I keep up with the entrepreneurial space because I love, that's the stuff I love. And, you know, you actually went and attended a workshop at Alex Ramose's thing than he does. And, you know, sitting at dinner last night, the biggest thing I took away was not only how awesome it was, you said it was fantastic. And I want you to talk about that. But, you know, I think there's a lot of people out there that just write off anybody on the internet talking. Myself included. Because it's like there's no way that these guys have all this time to make content on top of actually running a business and being a top 1% operator. And there is this preconceived notion that there is no way that if he actually knew as much as what he's professed people say he does,

you wouldn't give that away for free. Yeah. Like there is this, it's too good to be true because how is he extracting value? Yeah. Yeah, for sure. Yep.

But what I loved about what you said is you kind of realize, no, this guy, these kind of guys, the Gary Vaynerchucks of the world, the Alex Hermosey of the world, if you actually like go see it, you're seeing that the proof is in the pudding.

They're actually. 100%. Yeah. So talk about your experience. You bet. So just like Bud Williams, you know, you hear all this stuff. And I've got a number of customers and friends that are really big fans, Hermosies. You know, I work out. I like gym stuff. Like, obviously the guy knows how to work out. Like that's a good thing. But, you know, you hear all this stuff and you just think, is that real or not. And so part of me was just sort of a put your money where your mouth is. If this is a real deal, let's go see him. So went to one of his two day workshops. And I told you last night, I'll say it again. First two hours, I could have left and been perfectly happy. It was two days long. And by like, you know, 10 o'clock on morning of the first day, it's like, you could just shut off the lights now and I'd be perfectly happy.

That guy really does know his stuff. And what's amazing to me is we live in an age where we have so much access to information. And you've grown up this way. Your dad and I did not, right? We didn't have the internet. We were joking about the Encyclopedia Britannica, you know, the old version that we were writing our reports on for junior high and high school. Right. So, you know, we just have access to so much of this. And what's so cool is that information is basically free at this point.

Now, when you go to the internet, you have to discern, right? This is the skill now is what's BS and what's real. And there's a lot of stuff on the internet that's not real. And I told you my experience with podcasts, like I listened to a lot of people talk on podcasts, and I know they're financials. And I can't say anything, but it's like, well, sometimes that's not always correct. So I wondered the same thing about him, went down to the deal. You don't have to spend five minutes with that.

guy and it's like, oh, he's a hundred percent. He like, he is a powerful dude in the sense of watching him think through problems and answer questions. And then seeing the team of people that he has around them, they're unbelievable. And I mean, it's like one guy after another or gal after another that's, you know, done this, this and that. And they grew a marketing company from, you know, zero to $24 million in eight months. And you're like, I can't hardly get out of my own way in eight months. It takes me weeks to do anything, you know. So and it's just and it's like 25 people like this and, and they do their homework. Like they knew my business in it. They ask your questions ahead of time, you know, they knew my business in and out.

Every single one of them when I got there, right? There are a bunch of people in this workshop. They had studied up ahead. They were prepped. Like they knew their stuff. And then they get right into this kind of the same thing we do with our customers, which is, you know, what are the bottlenecks? What are the constraints? What are what, what are the opportunities? Like, where can this thing go? And his little framework for thinking, I've tried to describe this to a couple of people and it's difficult. Alex Hermose is an incredibly good communicator because he is a really good thinker. And I should say he's a great thinker. And the reason he's a great thinker is he can integrate a lot of different stuff and then distill it down to like one or two things that are just incredibly clear and very doable.

And the cool thing about his journey, we talked about this last night. And there are a lot of fun parallels, but, you know, he's not an academic. He's done it. And so if it doesn't actually work, it's out, right? So he's just sort of cut this thing down to the very nuts of what really works and what doesn't. And it's not complicated, right? Over and over again, you get to these people that have all these crazy complex theories about this, that, and the other thing, and they couldn't explain it to a fifth grader. Like the Mosey six that he walks through, it's like, this is the decision framework. There are six, there are six, there are six, there are six, potential problems, right? Are you capital limited? Are you supply limited? Are you, do you have a people problem? I mean, they're like all these basic things. They're the same things, whether you own a accounting firm, whether you own a ranch, whether you're on a barbershop. Like, it's the same thing over and over again. And his ability to distill that and then explain it is just remarkable. And it's funny because he's almost a little bit shy. You know what I mean? Like he's a nerd, right? I mean, we're all nerds, but he's just a little shy and a little awkward. And then he starts into this

stuff. And it's like pure manna from heaven coming down. And like I say, I was blown away. The other cool thing about that, and this something I believe in a ton. And one of the reasons we do an annual retreat for our customers every year, it is so good to get out and meet people. I sat next to a guy in that workshop who spends $10 million a year in Facebook ads. Holy mother million. 10 million. And when I first started the company, I've never really done anything with social media advertising.

I tried a few times to spend like $45, you know, to run a couple. And it didn't seem like it did anything. So I was like, and that's to it. And we were growing faster than we want it anyway, so I didn't worry about it. But that guy is just like,

okay, I have questions. I need to know more. And I peppered that guy for probably an hour over the course of two days about what in the world. goes on here. And I told that to my wife. And she was like, well, that guy's an idiot. Like, why does he spend that much money? And I was like, well, he puts $30 million in his pocket at the end of the year. So I think that's why he does it. And she was like, whoa, that's a whole different thing. And it is a room full of people like that. Now, when they put you with half of half of the second

day is like a small group breakout. And they put you with other people in your same weight class, you know, kind of total based on gross revenue. Right. And so that guy and I were not in the same weight class. I was on the smallest end of that deal, you know. But that's the kind of people that are in that room. And it was so fun to talk to these guys and see what they're doing. And the number of people there who, and myself included, the number of people there stood up and said, I am here because I have gotten so much out of your free stuff. I can't imagine what you give if I actually give you $5,000. Like, what do I get back for that? And it's 100% true. Like he has so much stuff out available for free in his books, you know, I mean, you paid 19 bucks for a book on Amazon or whatever. And there's a ton of

good info in there. And then believe it or not, there's even more when you get there. You talk a lot of the same language about providing value, you know, with the podcast and with the other stuff you do. This is a concept right now that I think all of us need to understand. And agriculture is one of these places, I think, where most of us get really focused on what we want to do. Like, I want to grow corn. I want to grow nice red Angus calves. Like I want to whatever, right, pigs, whatever the thing is. Like, we want to do what we want to do. And I think we often forget, because commodity markets are so liquid, right?

Because we have so many marketing opportunities, that's sort of thing. We forget that there's a customer on the other end and we have to provide what they value. Right. So when people like to complain about calf prices and how, you know, my cost of production is this and they only want to pay me this much, it's like, yeah, that's because they don't value it. you're giving them something they don't really want. If they really wanted it, they'd pay big money for it. And to my mind, the adjustment that needs to happen in agriculture is the same as in a lot of small businesses.

We've got to adjust ourselves to suit the market of buyers. And if we're not doing that, we're causing ourselves troubles or we have a hobby. So you might be super impressed with the fact that I like to produce red pepper art, right? And this is what I do in all of my free time, but you're probably not going to pay me for my, you know, kindergarten. age stamps with my red pepper, right? But nobody would expect you would get paid for that, right? My kindergartner can do that. That's not a high value thing to somebody. But if I can teach you how to make more money, right, if I can teach you how to make your life easier, right? If I can help you get what you want, now you're willing to pay for that. Yeah. And like I said, that's Hermose's

thing and he talks about it and he actually does it. Like the follow through on that deal is incredible. The follow up calls we've had since the two-day meeting down there. And there was no more promise other than a two-day meeting. And the two-day meeting was incredible. And then the follow-up I've had since then with their team and all that has been unbelievable. That's awesome. That's really cool. Your entire journey of your story and all the things that you do, that's incredible. What do you think? is the trait that you possess that has served you the most on your journey. Is it being willing to be a constant learner or is it something else? That's definitely a huge part of it. But I also

think my grandparents instilled in me a great work ethic. And so do my parents, right? That's the thing. Like work, work, work. And I have, I have, you know, a desire to like help people, which I know helps. I really enjoy that. You know, teaching somebody something, helping them get through something is really, is really fun. But I think that just willing to bust your butt and learn is a great gift. And my grandparents, you know, again, I use my mother's parents a lot, right? They were both born in 2003. They saw incredible change in their life. And they did amazing stuff. When my grandfather was getting ready to come home from the war in Hawaii, my grandmother and her sister like got in a car in southeast Kansas, or they were actually, I think they were corpus at that point,

and drove from there to California, right, to like two women by themselves driving across the southwest U.S. right in like 1945. Yep. That had to be quite a journey. Like, wouldn't you love to see a videotape of that? And they just, my grandparents were, I don't want to say they were innovators so much as they were just willing. Like, they were game.

Like, hey, let's try this. And I remember my grandfather, my mom. bought a PC clone in the head to be in the 80s, you know. And my grandfather at that point was, you know, 80-something years old. And he wanted nothing more than to open up the hood and look inside and tinker around. You know, and this is a guy who remembers cars coming to town, right? And it's like, you know, this guy was in Pearl Harbor, right? And he just had this interest in stuff that was, it was contagious. It was great. And this idea instilled over and over again, like you're saying, there's nobody coming to save you. Like, if you want something, you got to work for it. Yeah.

And I think over and over again, if we can combine those things with the willingness to learn, with the humility to just say, I don't, I don't know at all. What's going on? Like, it really works. And again, I'm super thankful for that because I think, I think that's a gift that I got from them. And I, and I'm sad that other people don't have that same thing. Yeah. We got a segment on here that we like to end the show with. I don't think we're going to be able to get to all the great things because we're running a little bit long. But we got to, we would, we would, we would. We would. wouldn't be Barn Talk if we didn't do this segment. Okay. So it's called Tip of the Hat. Oh, yeah. So who's somebody in your life or on your journey or what's a brand or what's a method or a thing that you use in your life that you want to give your flowers to and say, this person, this thing, this brand is awesome and it's doing it right. And it's doing it right. And why? It's Wally Olson, 100%. He and I met, we laugh all the time because I always tell people like, oh, I met like 10 years ago. And he's got a daughter who I think is turning 41 or 42 this year. And we met while she was still in high school. And he, I don't know why. He like took me under, we met on a ranch tour deal. And he took me under his wing and has just taught me and taught me and been patient with me when I'm an idiot over and over again. I mean, it's gone on for decades now. And I would not be anywhere near where I am at this point. Now, he and I both had the opportunity to learn from Bud directly,

But Wally's, he was so far ahead of me on that stuff and just has continued to just, he called while we were sitting here getting ready to record. We talk, we don't quite talk every day, but we talk a lot. Yeah. And he is just, I mean, I just can't tell you how, what a great influence he's had on my life, that man. And again, I've been lucky to have a bunch of these because Walter Lynn would be another one. Bob Metzker, a friend of ours that just died, he'd be another one. I mean, these guys just for some reason took me under their wing and let me in on. these cattle deals and and and again when I had it wrong they would just keep kind of coaching me

back to no you're now you're thinking about this wrong you need to and and bud's deal was always and Wally repeats it you know stay stay with just deal with today don't get into all this other stuff and then and then well you're not quite right you know and it's like who not quite right is pretty bad castigation there you know and it's like well you're not quite right let's keep working on that so the deal we talked about earlier and Wally's thing about cow depreciation. I think it took me like four or five years to understand what he was talking about. And he just kept at it. Didn't get frustrated with me. Just kept saying, no, you're not quite right. You got to rethink this. Awesome. Well, John, where can people find you if they want to work with you

or follow your journey one last time for people? You bet. Ranchright LLC.com. Right, spelled like your right hand, R-I-G-H-T. That's Instagram, Facebook, all the social media is. That's the website. We've got a fantastic team of people that we've built, and I'm super excited for the work they do. We get compliments all the time about how much our customers love them and how much value they provide for them and how they've really changed the life of their family. And I'm the one that gets all those emails and texts, and it's so fun to get those because it's so cool to see how much of a difference we can make for people. We're so damn excited. We're going to leave here and go to the clon of sale barn and just see how many heifers we can buy. buying heifers.

How much cash you got in your pocket? I don't think I got near enough. I don't think I got near enough. Be careful. Be careful, boys. It takes a lot of money to fill a truck. Well, shit. John, it was an absolute pleasure.

Thank you so much for making the trip. And guys, if you didn't get value from that one, you must have fell asleep because that was jam-packed with it. If you got value from the show, share it out with the people that you know. We love you guys. We appreciate you. And we'll see you back here next week for another episode.