Memo from Dickinson Cattle Co, Barnesville, Ohio ~~ Darol Dickinson.   I worked with Jay Nixon who was a sale manager for the King Ranch.  I found him very bright.  I always learned something from him during think-tank sessions in Kingsville.  His experience was never with Longhorns, except at the King Ranch.  Many of the cattle breeds he worked with are not popular today. Here is some sage advice from one who was there observing for a lifetime when it happened.  DD
 

THERE IS NO INTRINSIC VALUE IN SEED STOCK

by Jay Nixon --1995

Over the past 35 years or so, I have marketed for myself and for clients, just about every kind of cattle in most cattle breeds in this country, commercial cattle, commercial seed stock, registered seed stock to commercial producers and high-dollar, silk stocking seed stock to the players in breeds new and old.

Angus Show ChampI've seen breeds billed as the solution to the cattlemen's prayer come and go, and I've seen cattle with no visible value to anyone sell at prices I couldn't believe. I've seen breeders new and old become so enamored of a particular animal that did well at shows that they'd pay six figure money just to be one of the seven or eight people in a semen syndicate to own a little piece of it.

I've seen really good cattle, fine cattle that could really make people money, sell for little or nothing, and I've seen grand champions at some of the country's most prestigious shows mature into animals so sorry they were never allowed to breed a single cow.

I've seen people by the hundreds embark seed stock operations and never sell an animal at more than market price, even though they bought for big dollars what were billed as the best cattle in a particular breed as the basis of their herds. In four or five years, many sold out, disillusioned at an industry they believe bilked them.

We, in this business, are only too glad to sell these folks the fine animals we have at prices that are often staggering, yet fail to offer them the help and the knowledge it takes to make those cattle into investments that will bring them a return. Ours, is and perhaps always will be, a case of caveat emptor, let the buyer beware.

I've seen it and you have, too. A prospective buyer -- either a neophyte in the business or even a good solid commercial producer meaning to upgrade into the seed stock business -- comes to an auction, looking to buy cattle he is convinced are the best in a breed that is the top breed available in the business. These people want to believe that all they have to do in order to make their seed stock operation pay, is to have the best inventory available -- sometimes they think, "best" is the ones that sell the highest.

Angus Show ChampThey buy the hottest bloodline, sons of the famous old bull, the one that won at Denver or Jackson or Houston. They buy females out of the top donor cows, cows that everyone says are the breed's top producing females. They take them back to their spit-shined farms and ranches, the ones with the white fences and the landing strips and the red barns and the manor houses. They turn them out and they get the calves, and breed others either AI or through carefully selected embryos. Their herds grow, under the hand of some of the top herdsmen/consultants they've been able to hire. They drive out in the evenings and look at what they and God have wrought and are proud. Perhaps certain tax benefits increase the joy.

Then they wait for customers, and wait and wait and wait. Maybe they even send an animal to a fitter and show it, and they may buy an ad in the breed journal offering sons of the old bull, one of which was third in his class at Tremonium. But nobody answers their ads and nobody comes to look. Often, if someone inquires, the seller fails to answer the request.

One day they decide they've been pumping money into this operation to the point that it takes another cash source to pay the bills. Now, all they want is for the place to break even. Perhaps live lawn mowers, some tax advantage and a beef for the family is what it is about.

Soon they are silent, and the remaining producers are out there at the auctions, selling another to another new investor . This is the nature of the business. The new ones come and they go, and we, who are in it for the long haul, are always looking around for new customers.

Some of these people -- not all, but some -- can be helped. There are always those who buy a cow and immediately know all there is to know about the business. A wise old cattleman once told me that there is no one smarter about the business than a doctor who has owned a few cows for a year. Those folks we often can't help, because they will not admit they don't know it all. They will do it their way until the grass retakes their runways, the barns and fences collapse, and their names on the mailbox by the fancy gate fade to illegibility.

But there are those who can be helped, those who will listen to good advice if it is offered, those who want to understand the business and what makes it go. These we should work to salvage. These we should encourage, help, teach and explain how to make their operations succeed. These who will listen to proven successful producers can be the leaders of tomorrow. They can be profitable right from the start. They can be the future leaders of the respective breed associations who fall in this catagory.

We should tell these people that just because they own sons of the famous old bull, doesn't mean they are worth more than market price unless they are marketed and marketed creatively and aggressively. We should warn them that there is no intrinsic value in seed stock, nothing that will automatically increase their value above straight over-the-scale prices but the ability of the owner to market them. As the owner/operator they must sell themselves, sell their breed, sell their blend of genetics, their own breeding programs and, finally, their own cattle.

They should be taught that they must start with good cattle and then, market those good cattle, add value to those good cattle, correctly plan matings, build respect for those good cattle through their own efforts. And we should give them sound advice and counsel as to how to do that. It has been compared to riding a bicycle, it only goes as far and fast as you pump it. When you coast, it eventually stops.

In doing so, we would not be building feared competitors. We would be adding to our on-going market base through repeat customers. It is in our own best interest to do this.

This isn't a new idea. It has been done in the past by some of the acknowledged master breeders in several breeds of cattle, notably, Brinks Brangus, Nichols Farms, Litton Charolais, Harrell Cattle Company Beefmasters, and others, some of whom even held seminars for their good customers, shared marketing networks with them and were always available to give sound advice on particular problems. That is the difference in solid producers and those selling for the fast buck. The solid producer wants their customers to become solid. It is sad, but many drive-by marketers have no contacts of future assistance to their buyers.

These strong, thoughtout breeders maintained their buyer bases by keeping their good customers active and profitable, and the heart of their successes were these repeat customers. In today's market, Leachman Cattle Company is about the only one doing this to any extent. (Note article written in 1995)

I recommend the practice to all my purebred seedstock clients because it is sound and because it will help to make the seedstock business of the future more legitimate as an investment. Marketing seminars, educational customer appreciation field days, and just old-fashioned one-on-one time with valued clients. That works for everyone and the end is a happy one.


Registered Texas Longhorns since 1967

DCCI~~~ Purveyor of “one owner” quality Cattle.

 

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