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Liquidating The Herd
by Darol Dickinson (used by permission of TLJ)
I received a phone call from a lady last Fall who had just lost her husband. She offered her whole Texas Longhorn herd to me at a "bargain price" because she wanted to sell promptly before winter. She didn't have any winter feed. Immediately I wanted to help the lady so I ask her some questions. Her answers were all very disappointing. After ending the call, discouraged, I thought for hours about this nice lady and the mistakes that she had inherited.
Herd liquidation when family members truly love the cattle is always a sad thing. However, there are times when liquidation is the only thing to do. As I thought about this elderly lady, that I had never met, I know there will be others in the same decision making process. Every period in life either good or bad will be a learning experience. It is good to learn from other's mistakes rather than our own.
By this date the cattle have probably been liquidated and I would guess some one gave about $300 to $500 each for them, if they were fat and healthy. The lady probably thinks the buyer "stole" them from her and perhaps cheated her at a weakened moment.
Thinking about the mistakes made here, how can others avoid this same outcome? How, as a husband, can this be avoided as a major problem to leave with a spouse.
For starters you are either in the registered cattle business or you aren't. Every critter purchased must be registered. Before purchasing there needs to be an agreement. The seller must transfer the certificates promptly right after the purchase check clears the bank. If the seller doesn't provide, transfer, and pay for these certificates, that is a clue that you have a problem. If the seller doesn't offer to promptly take care of this house keeping job, that is the time to get real serious with them. The same duty falls on everyone when selling registered cattle. Can one even dream of a car dealer or real estate agent that just "forgot" to transfer the deeds? Don't do it to someone and don't let them do it to you!
Records must be retained on herd additions and registration certificates kept in order. If not, all cattle are considered as grade or generic cattle and their value is only determined by body condition and weight. Do not think you can consign one to a registered sale and receive several thousand dollars. It doesn't happen.
Regular vaccination and trace mineral provision (not just salt) is important to keep the herd healthy. Most areas need annual or twice annual worming of every critter. These management details cost, but they pay for themselves with a good healthy and consistently reproducing herd.
The registered Texas Longhorn business is a marketing business. It is not just a multiplication thing. Right from the first Longhorn purchase it is normal planning to start some form of advertising effort. More than one publication is a way to spread the information to several audiences. Start the advertisements before there is a desperately needed liquidation. Keep a list of inquiries with clearly written addresses from the ads. It is better to have ready buyers when needed than surplus stock and no place to sell them. One is much nicer than the other.
Take photos of every critter when they are fat and slick. When an advertising photo is needed for a January ad, don't be skiing about the pasture with a camera expecting the cattle to photograph well. Regular photography of cattle in good condition should be done using a numbering system so the photos can be located when needed.
Cull cattle do not help the herd to improve. Castrate and eliminate extra males. One bull can breed 40 to 80 cows. Don't force the herd sire to fight off the whole bull calf crop of the last two years just to do his job. Eliminate old non producing cows. Keep replacing the herd with young stock. Today ground beef is the leading selling meat product grown in the USA. Although an old cow will only bring $300 to $400 at a generic livestock auction, her grind is worth $1000 to $1300 in one pound packages. If a person doesn't want to take an old critter to a custom processing plant in the area and add another thousand dollars to the liquidation, get over it. If God didn't expect people to eat cattle, why did he make them out of steak and healthy lean burger.
Don't hesitate to grind unproductive cows. The value of hamburger is normally triple what they will sell for in a commercial sale barn. Share the burger with family members and everyone wins. You can develop a market for Longhorn grind locally. Nearly 300 million people in the USA eat ground beef. With proper processing the product from Texas Longhorns will be much higher in nutrition and all around health quality than they can get at their grocery store.
When the herd sire has daughters old enough to breed, consider grinding him. Very few adult sires are selling for more money than the value of burger. Only the really good bulls are worth a premium above grind. Young virgin bulls often bring much more money than used senior sires. Use a young unrelated bull and grind the old bull.
Most people think their bull is really, really good. Remember the facts of life are, 50% of all bulls are below average and the other 50% are above average. Unless you are absolutely sure your bull is above average by quite a lot, he is definitely a good burger prospect. Always force yourself to keep an eye on reality.
One way to increase herd value is artificial insemination. The same 50% applies to semen sires. Half of them are also in the bottom 50% of the A. I. sire group. Only breed to the very best AI sires. Progressive beef breeds are breeding over 40% of their cows AI. Dairy herds are over 90% AI. In the Longhorn breed less than 2% are AI bred. What does this tell you?
Don't over stock your pastures. It is often better business to lease more pasture, if it is needed, than to buy land or buy feed. Always consider leasing land as an option to liquidation. Often Texas Longhorns are more profitable than land investments.
There are management methods that can cause herd values to increase, and methods that cause value reductions. Ask someone successful with registered Texas Longhorns who has been in the business a long time to explain the difference. Don't ask a commercial cattle raiser, there is a lot of difference in registered and commercial.
Participate in national association activities and local affiliate events. This is a team effort business. Although it is nice for other people to always carry your water, the time comes when each needs to serve in some helpful capacity to increase breed awareness, show organization, field days, etc.
If you are a multiplier of cattle you have a responsibility to be a multiplier of cattle producers. Encourage friends to raise Longhorns. Every breed can only grow as fast as new people come into the circle of friends and producers. Some owners hope to profitably sell cattle in the future yet have never signed up a single new member. Is something wrong with this picture?
Some cattle multipliers totally refuse to contribute. Will they help build the world Texas Longhorn business or just harvest the efforts of producers who have carried water in days past? Part of enjoying a liquidation at some future day (or your widow) is to have generously contributed to the success of the breed, the association and to healthy promotional efforts. There are some people who have raised quality cattle for ten or twenty years and have never purchased a color page ad or donated to a benefit association fund raiser. Some are givers and some are only takers, and everyone knows the difference.
Plan a liquidation as far into the future as possible. These things take time and planning. Registered cattle always sell higher in the Spring than in the Fall. When wild birds start to lay eggs and grass starts to grow, it is the right time to sell. At that time cattle are higher in value.
As you think of things that are good and positive and compare them to failed efforts that are proven not to work, notice that there is a great difference. Some actions make good and profitable things happen and some actions cause failure and discouragement.
I hope this article will assist each TLJ reader in successful planning and herd evaluation. May you never have to liquidate.....but if you do, I hope your business plan is so sound you can't stir the buyers with a scoop shovel and they stand at the door fighting over who gets to buy the first load of your registered Texas Longhorns.
Registered Texas Longhorns since 1967
DCCI~~~ Purveyor of “one owner” quality Cattle.
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