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Welcome to We Live It, the Live Ag
Podcast, your source for livestock,

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market insights, management strategies,

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and real conversations with those who
don't just work in the cattle industry.

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They live it. Here are your hosts,
Ty de Cordova and Casey Mabry.

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Oh Lord. We would like
to welcome you back.

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Casey and myself like to welcome you
back to We Live It, the Live Ag podcast.

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We're excited here today.
We got a guest on today.

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We'll introduce to you here in a minute.
Just want to check in with Casey,

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what you've been up to, where have
you been, what you been doing, buddy?

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Oh man.

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We're in stock show season here and
we've been busy with that part of it.

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Markets have been chaotic, so we've
been busy with that as well. But man,

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it's been fun. I mean, obviously
we got a lot of things going on,

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but it's been a good
time. How about yourself?

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Pure purebred Wells has been wild.
We've been traveling on going to them.

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We had Stevenson's on the fifth. No,

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whatever day it was. That's
what it's all tangling up.

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We had expresses here this past week
too at Stevenson's, a weekend before,

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and a lot of 'em in between.
It's been pretty wild.

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This purebred markets on fire too,
as well as our markets. So man,

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it's been fun to go see all these guys
that produce these good bulls for us that

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we get to sell to our producers and our
customers so we can market their cattle.

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And man,

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it's been pretty good to see those guys
and walk around and shake hands and like

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you said, stock show
seasons and full force.

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We're getting ready to go to Houston with
some steers here in the next couple of

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weeks. Then we got our county
fair the week after that,

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so it's wide open chasing these
kids and chasing this company.

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So it's been pretty fun.

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Yeah, it keeps you pretty busy all
the time, doesn. It does, yeah.

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And you guys are getting ready to sell a
bunch of wheat pasture cattle here too,

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right? Whenever we get
on the front end of.

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That. Yeah. Yeah,

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we sold some a couple weeks ago and then
we got a pretty big run coming up here

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and next week we'll have a pretty
good sale on the 13th of March.

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That deal will be pretty good. Have a
pretty good run of 'em on there too.

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Yeah, it sounds like wheat's incredible.

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So guys are probably dragging
their feet to sell 'em.

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There for a bit. They are, and some of
'em is waiting on some moisture stuff.

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That's why they drug the feet. And
then some of 'em are just this market.

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They don't know when to pull the trigger.

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They're kind of excited and they don't
know how to do it and when to do it.

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Either they sold some early and then
they're regretting it and they're wanting

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to wait for more money or heard of some
buddies getting more money than them,

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but everybody wants to sell
later than everybody else.

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Yeah. Well, we'd like to
introduce Dennis Mere.

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He's one of our reps for Live Ag
and he's also our rep relations,

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one of our rep managers.

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He goes around and he interviews
him Between him and CJ and myself,

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we kind of go around and
we talk to these new reps,

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new people that want to come on as reps.

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We kind of got a criteria that we
look for. Like we said before, we

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don't want to have the most,
we just want to have the best.

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We're going to be very, very
crucial on the guys we do hire.

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So we're pretty critical on that.

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And Dennis is one that helps that and
as we'll talk here through for a little

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while,

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kind of what we look at and one and as
far as that goes and what we expect out

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of 'em when they go to selling the cattle
for as far as how they write 'em up

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slides and where they're
located and all that. So Dennis,

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you want to introduce
yourself and kind talk,

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give it a little bit
of background. I mean,

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you've got a pretty extensive
background in the industry.

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You've come from a couple different
companies and you've learned a lot on the

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way. Just give a little
bit of your background.

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Well, thanks for having
me first of all. Yeah,

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I'm Dennis Metzger and like Ty said,

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I have quite a past as how it
evolved and I got to this point,

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it involved both seed
stock and longtime rep

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and even some management
of another company,

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but it's been a good ride
to get to this point.

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So with the seed stock side of it,
which I'm still fairly involved in,

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seed stock genetic selection
for a lot of my customers, which

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those customers have also become friends.

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So my communication with
the people that I rep cattle

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for is year round. It's
not just at marketing time.

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So from that respect,

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I think that you're communicating
with them on a regular basis,

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not only about market potential,
but also genetic potential. So

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I had a 12 year run as a
regional manager or field

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rep for the Charolais Association.
At the same time I was also a rep.

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So kind of a unique way of
getting here. But in that,

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getting to this point,

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you build a lot of relationships
and meet a lot of people.

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And if you pay attention
to my travel schedule,

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it'll kind of make your head spin
as to which state I'll be in next.

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And.

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It covers a good many states. So.

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Well, as far as your customer base, I
mean they're a very loyal customer base.

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I mean,

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that's one thing we build in this industry
and we want to talk a lot about today

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too, is our customer base.

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You did said you communicate with
'em more than on just the day

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you sell their cattle. I mean,

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it's more like a family and a close
friend atmosphere here where we don't just

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sell their cattle then move on.

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So we stay with them if we're going
by their house, we stop in and visit.

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If they need bulls, we have
'em procure their bulls.

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I mean that's the relationship that you
have with your customer base, right?

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Some days it feels like you manage
everything but their personal relationship

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and their marriage, I mean.

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Sometimes we get the marriage
calls, sometimes you're the.

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Only guy that they can talk to. No,

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it's year round from, and I see
a lot of Matt Bull sales too,

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and that's where a lot of my acquaintances
and these long-term relationships

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have come from.

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And we're fortunate to be
at a place with a company

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now that technology is foremost with them.

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But if we don't have the
relationship and put that with it,

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and like I said, I'm talking
to 'em multiple times a year.

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I can't predict the market,

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but I can help manage how they're going
to fare in the market through genetics,

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through different marketing
timeframes, delivery dates.

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Programs.

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Value added programs and value
added programs have more than just

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the icons that we get to put on there.
They can be managing delivery day,

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having cattle kind of squared up a
little bit so we can make it so shrinks

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aren't as big and more efficient,

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which in turn makes a buyer happier if
those cattle are on the road quicker and

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not stressed out four or five, six
hours in a ship and corral and ship day.

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So it's managing things besides
just what happens on two days

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of their payday.

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Yeah. I chuckled a second ago, Dennis,

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and I just want to make
sure everybody's clear.

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Whenever you said I talked
to 'em more than just right,

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coming up the sale day mean,

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so I've got a client that
I would help 'em buy bulls.

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I mean believe that or not,

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and that's a feat in itself trying to
decide what that's going to be for a big

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operation, it makes
such a long-term impact.

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And so a lot of those bull sellers
would call you, your phone would ring,

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and you're like, I didn't
get the bull cell catalog,

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but it's coming right then because,
and it's like, Hey buddy, how you been?

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And there's so many of those
things in this industry,

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but it takes time to work
with these producers,

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but then also that's the
reward that you get from it.

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Because like you and I were talking
just a second ago out there, I mean,

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you live in a totally
different area than I do,

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and we've never really crossed paths
until I'd say in the last year or so.

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But I mean this industry's so big,

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so small that whenever you
are a resource to somebody

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that it just continues
to evolve into that.

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Well, and a lot of times, and
from my personal experience,

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I mean a lot of my new
customer base or potential new

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rep base has come from a delivery,

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meet a neighbor there that wants to
make a switch or likes the way you

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do things,

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likes the way his neighbor's cattle had
sold that day. He's got the same kind of

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product. How does he get to be
a part of that? So it's big,

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but it's very, very small when it comes
right down to it. That's wild there,

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especially now in the last several years.

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But there isn't hardly a week goes by
that I don't meet somebody that you've

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heard about or know about.

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Or it might even be a new acquaintance
that you've never heard the name that

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evolves into something that you're
going to do business down the road or at

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least communicate in your case,

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whether that be what do you think
about the market or you think where we

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headed? That's the
question we all get asked

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as a company and as reps. Well,

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what's market going to be like next two
or three years? Well, I said it earlier,

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I can't predict it fundamentally,
it's pretty solid right now. But

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putting the relationship part
of it with the technology,

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the relationship business
will enhance the technology.

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The technology will enhance our company
and the relationship part of it,

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in my opinion.

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You also bring a pretty substantial
buyer base with you. I mean,

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that's another thing that we don't talk
about a lot is our relationships with

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these buyers. I mean, they become
friends. They become like family. I mean,

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I don't know, eight or 10 of 'em I talk
to on a daily, if not a weekly basis,

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that we might not even
talk about the cattle.

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They might call and check on the girls
and I'll call and check on their kids and

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a lot of 'em in the show world together
that it's such a tight knit group

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of us guys that communicate on a daily
or weekly basis. And like I said,

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we might not even talk about cattle,
but we do a lot of business together.

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And that's one relationship that we
don't talk about a lot is our buyer base.

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And we're very fortunate to have an
awesome buyer base and you've got a pretty

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big buyer base that follows you around.

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Well, and that's come over time too,
but that's also relationship driven.

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And I think a good example of
that was in Denver at our sale at

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Coors Field,

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we had a lot of buyers that were in the
room that day that didn't buy cattle,

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but come to support us, see what we
was about, knew somebody involved,

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whether it was a seller, a
rep, or any part of it. I mean,

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they showed up just to support
us and see what we're about.

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And I think that was a good
example for me. I mean,

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I can think of three or four people that
was there that are buyers that I deal

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with and that probably
all of us deal with,

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but they were there for
support more than anything.

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It such a good environment
there. It was really cool.

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And to go in there and
see some of those people,

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and I mean they could easily sit on the
other side of the computer screen and do

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that, but it's interesting to see 'em
come to the site and watch it and enjoy

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themselves and eat that good lunch
that they had there for sure. Yep.

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I didn't get to that point to I
didn lunch. They had lunch. Oh yeah.

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You were over there. Busy was.

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They served lunch and
they didn't let me know.

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Oh.

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They sent you the bill.

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Though. They didn't say, I did get
the bill, but I never seen the lunch.

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They saved me pizza the day before.

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Yeah, that's what it was.
Pizza the day before.

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Those relationships with buyers
are just as important. I mean,

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we worked for the seller most of
the year until the gavel drops.

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And then it's all about the buyer
and the sellers that understand

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that that is the best
feeling you'll ever get,

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is knowing that you've got a seller that
cares as much about that buyer as you

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do. And that's what makes
my job a lot easier.

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Yeah. So let's talk a little
bit about current events,

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where we're at in the state of the
industry and that kind of stuff.

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You good with that? Yeah,

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and I'm going to be a little bit selfish
in this fact because it's going to help

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me to digest a little bit of the bias
that I've got as far as the market goes.

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Dennis, let's talk about the last
several years and really it's about

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where we've been, where we've come
from, and then where we're going.

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And this is the state of
the union for the cowman.

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You probably got more boots on the ground
and that area and lots of different

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and not in that area in lots of
areas and really understanding.

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So we've gone through multiple different
things that have driven people to make

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decisions to either get into the cow
business or get out of the cow business. I

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think about guys that I've
talked to in 20 19, 20 18, 20 20,

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we always talk about the different things
like aging ranchers and what have you,

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but there's been some
financially impactful events
that drove people out of the

223
00:12:35,470 --> 00:12:39,100
market, one of those being the biggest
drought that we've had out west,

224
00:12:39,160 --> 00:12:40,270
so the Montana area.

225
00:12:40,270 --> 00:12:44,320
And so I've had just hands-on approaches
where I've had guys that had four or

226
00:12:44,320 --> 00:12:48,160
5,000 cows liquidate and
then not come back now.

227
00:12:49,960 --> 00:12:54,910
So I'm going to start it with that is
just go give me your gut on what the state

228
00:12:54,910 --> 00:12:59,830
of the industry is. What's the
cow person cowman thinking?

229
00:12:59,830 --> 00:13:02,650
Where are they at? Where are they
retaining? Do they want to retain?

230
00:13:02,650 --> 00:13:05,620
Do they want to grow? Are they
buying cows from different areas?

231
00:13:05,950 --> 00:13:07,780
Just let's download that for a minute.

232
00:13:08,080 --> 00:13:12,700
Well, I think by in a 15, 16,

233
00:13:12,700 --> 00:13:14,800
17 state area that I travel in,

234
00:13:15,010 --> 00:13:16,930
some of those states a
lot more than others,

235
00:13:16,930 --> 00:13:20,440
but there's still pretty
big difference in moisture.

236
00:13:21,640 --> 00:13:25,480
We got the northwest, it's getting a lot
of moisture right now. My home country,

237
00:13:25,480 --> 00:13:30,040
which I don't spend much time in, we're
desperately a need of moisture now.

238
00:13:30,040 --> 00:13:32,230
We just soon wait until
April before we get it.

239
00:13:32,800 --> 00:13:37,540
But as I travel around
in the base that I work

240
00:13:37,540 --> 00:13:40,570
with, mostly in the
conversations that I have,

241
00:13:40,570 --> 00:13:42,790
whether I deliver their cattle or not,

242
00:13:43,420 --> 00:13:45,940
there's not much growth
going on where I come from,

243
00:13:47,140 --> 00:13:51,580
the growth that I see
probably happening because of

244
00:13:51,580 --> 00:13:56,230
retirement or because of youth
and interest rates and those

245
00:13:56,230 --> 00:14:00,970
things and not a family member
to help get 'em started,

246
00:14:01,270 --> 00:14:05,050
support very minimal right now. But

247
00:14:07,150 --> 00:14:11,620
what I see is bigger, getting
bigger, buying neighboring ranches,

248
00:14:11,920 --> 00:14:13,180
established money,

249
00:14:13,180 --> 00:14:16,000
established ranches that have
been around a hundred plus Years.

250
00:14:16,180 --> 00:14:17,860
They've got the ranch
that they own next door,

251
00:14:17,860 --> 00:14:20,530
they just sold a cow crop
and they buy the next Ranch.

252
00:14:20,530 --> 00:14:23,170
The people we were talking about
right before we walked into this room,

253
00:14:23,170 --> 00:14:27,640
they're buying. They just bought another
3 million ranch, not a very big deal,

254
00:14:27,640 --> 00:14:31,600
but connected to 'em. And they're
in a position where they can do that

255
00:14:33,190 --> 00:14:35,500
for the young guy. Now,

256
00:14:35,500 --> 00:14:39,700
I do think this market will encourage
youth to come back to the ranch

257
00:14:40,090 --> 00:14:42,490
because you start talking the levels.

258
00:14:42,490 --> 00:14:45,760
We're at that end of the year,

259
00:14:45,760 --> 00:14:50,350
income looks lucrative to 'em
versus going to town and getting

260
00:14:51,080 --> 00:14:53,690
a job that may not be there very long.

261
00:14:53,960 --> 00:14:56,780
And if they ever have hopes
of coming back to the ranch,

262
00:14:57,290 --> 00:15:01,280
we're in a market right now that will
encourage 'em to do that. Now we all know,

263
00:15:01,640 --> 00:15:06,230
and there's obstacles coming,
we've all seen it. I mean,

264
00:15:07,070 --> 00:15:09,410
it's win is the key.

265
00:15:10,400 --> 00:15:14,090
But what I would tell anybody is make
sure you're in a position that when that

266
00:15:14,090 --> 00:15:15,770
does come, and that's where you come in,

267
00:15:16,070 --> 00:15:20,900
is I've mentioned risk
management protection

268
00:15:20,900 --> 00:15:25,670
more in the last six months, three
months than I've ever said it.

269
00:15:26,390 --> 00:15:31,370
And it's a non-traditional thing for
established ranchers to think about

270
00:15:31,370 --> 00:15:33,440
risk protection. We spend a lot of time,

271
00:15:33,950 --> 00:15:36,800
ranchers spend a lot of time and
they're really good at production.

272
00:15:37,280 --> 00:15:40,070
They're really good at
building a really good product,

273
00:15:40,400 --> 00:15:44,660
especially the upper 20 or 30% of these
aggressive and progressive ranchers.

274
00:15:44,990 --> 00:15:48,170
They spend a lot of time
getting that product just right.

275
00:15:48,950 --> 00:15:50,780
Marketing is not their forte.

276
00:15:50,930 --> 00:15:53,660
And risk management is something
that they struggle with.

277
00:15:53,930 --> 00:15:55,550
Most guys in this business. I mean,

278
00:15:55,550 --> 00:15:59,360
most guys that you'll find are their
personality types more reserved and more

279
00:15:59,360 --> 00:16:02,420
quiet, and they're out on the
ranch, and that's a lifestyle.

280
00:16:03,050 --> 00:16:07,490
And then whenever you start talking
about any of those numbers and the sales

281
00:16:07,490 --> 00:16:10,220
side of it, they don't necessarily put
a whole lot of time and effort into it,

282
00:16:10,640 --> 00:16:12,860
and they really don't
have to. Most of the time,

283
00:16:13,460 --> 00:16:15,650
the market usually just kind of takes
care of itself most of the time.

284
00:16:16,010 --> 00:16:18,470
And then you'll have that one
year that just smokes 'em, right?

285
00:16:18,470 --> 00:16:22,970
And it takes a lot of years to do
that. So it was interesting when I,

286
00:16:23,330 --> 00:16:26,150
I spent just a fraction of
time at NCBA convention,

287
00:16:26,480 --> 00:16:31,190
but I think about over the years
of the feeling that you get from

288
00:16:31,190 --> 00:16:34,280
people or you go to sales or you do
whatever, and we've just had this,

289
00:16:35,360 --> 00:16:39,560
you go from what's the market going to
do to everybody high fiving themselves

290
00:16:40,880 --> 00:16:42,290
whenever the market was.
I mean,

291
00:16:42,290 --> 00:16:45,440
there's a lot of 'em cows that got
liquidated in Montana for eight or $900 a

292
00:16:45,440 --> 00:16:48,470
head, and now those cows are
worth $3,000 a head or more.

293
00:16:49,520 --> 00:16:52,820
And actually they're probably worth more
than that based on what the calf values

294
00:16:52,820 --> 00:16:56,120
are. But that's where I'm going, alright,

295
00:16:56,120 --> 00:16:57,410
I don't know where the
market's going to go.

296
00:16:57,620 --> 00:17:01,220
And if I told somebody the market was
going to go down, I'd probably be wrong.

297
00:17:01,880 --> 00:17:04,550
But if you told somebody that we're going
to hang in here and keep going higher,

298
00:17:04,940 --> 00:17:05,960
I just want to know

299
00:17:09,350 --> 00:17:12,620
who's going to be the next participant
in this thing. Because I mean, again,

300
00:17:12,950 --> 00:17:16,640
the thing that's unfortunate about
our business is it's a lifetime

301
00:17:17,840 --> 00:17:18,673
aging part out. It's aging out. And

302
00:17:20,810 --> 00:17:23,450
the thing about the capital that
it takes to get into this business,

303
00:17:23,450 --> 00:17:25,670
that's always been a
thing. I mean, ranches,

304
00:17:25,670 --> 00:17:28,370
I don't think I've ever heard
of a cheap set of feeder cattle.

305
00:17:28,640 --> 00:17:31,850
I don't think I've ever heard
of a cheap cow or a cheap land.

306
00:17:31,850 --> 00:17:33,320
You know what I'm saying?
It's always been high,

307
00:17:33,380 --> 00:17:36,050
but I just wanted to kind of
dialogue with that for a minute.

308
00:17:36,260 --> 00:17:37,400
So as a rep,

309
00:17:37,730 --> 00:17:42,680
one of the things and being in rep
relations now or whatever to help

310
00:17:42,680 --> 00:17:43,820
train young guys,

311
00:17:44,780 --> 00:17:49,320
that's one thing I've thought a lot
about because we're in a business where a

312
00:17:49,320 --> 00:17:53,070
lot of reps are aging
out. Not so much here,

313
00:17:53,070 --> 00:17:57,990
but I've given a tremendous amount
of thought that we train younger guys

314
00:17:57,990 --> 00:18:00,420
because I'm one of 'em
that's aging out. I mean,

315
00:18:00,810 --> 00:18:04,110
I'm the oldest guy on the team at the
moment, at least in my part of the world.

316
00:18:04,230 --> 00:18:04,290
You.

317
00:18:04,290 --> 00:18:05,810
Look extremely young, you must
Take care of yourself.

318
00:18:06,120 --> 00:18:08,160
It's lifting weight
every day, working out.

319
00:18:08,640 --> 00:18:12,420
It looks like Todd's got 20
years on you. Well, gray wise,

320
00:18:12,960 --> 00:18:15,150
at least he's there killer.

321
00:18:16,530 --> 00:18:18,060
But that's one thing I've given some,

322
00:18:18,060 --> 00:18:22,470
how do we take our company
to the next level and

323
00:18:23,700 --> 00:18:28,410
those ranchers that are the hundred year
old ranches that the next generation

324
00:18:28,410 --> 00:18:31,950
there, and I've been at it 20,

325
00:18:32,520 --> 00:18:34,380
I evolved into this by accident.

326
00:18:34,380 --> 00:18:38,010
I didn't grow up looking for this job.
How'd you get into it?

327
00:18:40,140 --> 00:18:45,090
And it was the best guy I've ever
worked for. But I went in as a fieldman.

328
00:18:45,090 --> 00:18:48,150
I went into his office one
day to do a charlee visit.

329
00:18:48,420 --> 00:18:49,950
You got to keep track
of where you've been.

330
00:18:49,950 --> 00:18:53,850
So I go see a man by the name of
Ellington Peak one day when I'm traveling

331
00:18:53,850 --> 00:18:58,680
through California, which
out there is legendary.

332
00:18:58,680 --> 00:19:02,850
And I left with a checkbook, a
contract book, and a bill of lading.

333
00:19:03,150 --> 00:19:06,270
I went in just to shake
his hand and say hi. So.

334
00:19:06,510 --> 00:19:11,130
I bet that was pretty fun, but
pretty nerve wracking as well, huh?

335
00:19:11,160 --> 00:19:15,480
Yeah. Well, first couple of years, I
forgot where I put it and stored it,

336
00:19:17,250 --> 00:19:21,630
but that's the man that taught
me what the business is about

337
00:19:21,630 --> 00:19:24,540
from a relationship standpoint. I mean,

338
00:19:24,540 --> 00:19:28,530
I flew on an airplane with him
one time from Denver to Phoenix,

339
00:19:28,530 --> 00:19:32,100
which is a little over an hour.
And I bet before we landed,

340
00:19:32,310 --> 00:19:35,970
the stewardess were mad at him because
he was walking the aisle away introducing

341
00:19:35,970 --> 00:19:39,360
himself, just shaking hands. He'd
met half the people on the plane.

342
00:19:40,020 --> 00:19:42,870
But that was a lesson I'll never forget.

343
00:19:43,680 --> 00:19:47,580
Now to put technology with
that then that's kind of,

344
00:19:48,540 --> 00:19:52,110
and each other, they enhance
each other in my opinion. But

345
00:19:54,060 --> 00:19:58,230
I think we need, as a
company, there is a good,

346
00:19:58,230 --> 00:20:03,180
we hear more about the aging out and
we hear more about the market and

347
00:20:03,180 --> 00:20:07,920
the how's a young guy get
started? But as I travel around,

348
00:20:07,920 --> 00:20:10,890
I mean, I've got several
ranches that were,

349
00:20:12,150 --> 00:20:16,920
I'm three generations, the third
generations there, and I've been at it 20,

350
00:20:16,920 --> 00:20:18,300
25 years is all I've been at it.

351
00:20:20,370 --> 00:20:23,130
The cattle. I was going to say the cattle
market has got a 10 year cycle to it.

352
00:20:23,130 --> 00:20:26,160
And it's crazy because on
the beginning of the cycle,

353
00:20:27,300 --> 00:20:30,750
you got people that are telling
their kids to get into the business,

354
00:20:30,750 --> 00:20:31,620
and by the end of the cycle,

355
00:20:31,620 --> 00:20:34,170
they're telling their kids to get
out of the business out. And I mean,

356
00:20:34,170 --> 00:20:36,810
I tell people that all the time,
and I mean, even in my company,

357
00:20:36,810 --> 00:20:37,643
we've tried to hire,

358
00:20:37,980 --> 00:20:40,620
I've got a couple guys that we
hired straight out of college,

359
00:20:40,620 --> 00:20:44,160
and you have to mentor them and you
got to put all the effort into 'em.

360
00:20:44,160 --> 00:20:48,280
And I call 'em million dollar babies
because it takes forever to get 'em there.

361
00:20:48,280 --> 00:20:49,450
And that's what Cargill did for me.

362
00:20:50,140 --> 00:20:53,470
But if you don't bring people into
that industry, then your business does.

363
00:20:54,700 --> 00:20:55,630
Yeah, the whole industry.

364
00:20:57,700 --> 00:21:01,510
He said something a while ago that I
wanted to circle back around on talking

365
00:21:01,510 --> 00:21:06,370
about the cow calf guy,
the producer. How do they,

366
00:21:06,430 --> 00:21:11,350
in a market like this, can they,
and I think I know the answer,

367
00:21:11,350 --> 00:21:16,090
but I want you to dive into it a little
deeper. How do they protect theirselves?

368
00:21:16,090 --> 00:21:18,490
How do they, not hedge,

369
00:21:18,490 --> 00:21:22,780
but maybe LRP or something on our
calf crop that's coming up that's.

370
00:21:23,350 --> 00:21:23,980
Unborn calf.

371
00:21:23,980 --> 00:21:27,400
Crop, unborn calf crop. How can
they capitalize on this deal?

372
00:21:27,400 --> 00:21:29,140
Is there a way for 'em
out there to do that?

373
00:21:30,220 --> 00:21:32,500
And I would look at it
more so as like, okay,

374
00:21:32,500 --> 00:21:37,480
so let's say I've got a producer
that's got 500 cows and that

375
00:21:37,480 --> 00:21:41,170
cow and that calf that was going
to get produced off of that cow

376
00:21:42,310 --> 00:21:45,190
five years ago, it was worth 900 bucks.

377
00:21:45,730 --> 00:21:49,210
So this guy's got a revenue of
half a million dollars in a year,

378
00:21:50,500 --> 00:21:53,080
depending on what his expenses are.
I mean, whatever he is going to make,

379
00:21:53,080 --> 00:21:55,690
but just look at him. He's a
straight up revenue based business.

380
00:21:56,170 --> 00:21:57,310
And I think about, this is wild.

381
00:21:57,340 --> 00:22:00,100
I think about this all the time because
most people don't even think about it.

382
00:22:00,190 --> 00:22:03,850
They just send their calves off and
that's what they get what they get.

383
00:22:04,840 --> 00:22:06,280
They're just price takers. Now,

384
00:22:06,280 --> 00:22:08,770
the market has doubled
the value of those calves.

385
00:22:09,220 --> 00:22:11,260
So those cals that calves are
worth now just say two grand.

386
00:22:11,500 --> 00:22:16,180
So that guy went from having
a $500,000 or $450,000 in

387
00:22:16,180 --> 00:22:17,860
revenue every year up to a million.

388
00:22:19,390 --> 00:22:22,660
His expenses have probably gone up to
some degree, but not really that much.

389
00:22:22,660 --> 00:22:26,980
I mean, they've gone up, they haven't
doubled, right? But they have gone up.

390
00:22:27,280 --> 00:22:30,340
And so I'm not saying the market ever
corrects back and gets to where they're

391
00:22:30,340 --> 00:22:32,140
worth or 900 bucks ahead.

392
00:22:33,130 --> 00:22:36,040
But to answer your question
on how to protect that,

393
00:22:36,400 --> 00:22:39,940
so there's a program called
livestock risk protection Insurance.

394
00:22:39,940 --> 00:22:43,360
And I'm guessing, I mean I always make
this joke. I mean Blue Reef, we offer it,

395
00:22:43,360 --> 00:22:47,590
we do it because we use it in
relationship with futures and options,

396
00:22:48,340 --> 00:22:51,340
and we try to be cattle market people.

397
00:22:51,700 --> 00:22:55,060
And so that program is
an insurance program.

398
00:22:55,180 --> 00:22:58,450
It's offered by the Federal Crop
Insurance Program by the USDA,

399
00:22:59,770 --> 00:23:03,550
and it's a program that's
offered to cattle producers,

400
00:23:03,550 --> 00:23:05,920
and it's been around for quite a while.

401
00:23:06,280 --> 00:23:09,820
The reason why it's been very unpopular
to use it is because it's very expensive

402
00:23:09,820 --> 00:23:11,050
or it was very expensive.

403
00:23:11,740 --> 00:23:15,280
So what happened during covid is
whenever they took a lot of the funds,

404
00:23:16,300 --> 00:23:17,980
the federal government
steps back and goes, man,

405
00:23:17,980 --> 00:23:22,510
we've never given direct payments to
producers before on the livestock side of

406
00:23:22,510 --> 00:23:22,810
things,

407
00:23:22,810 --> 00:23:27,790
outside of drought relief or some kind
of fire or something like that. So

408
00:23:27,790 --> 00:23:31,240
what they did is they took a big chunk
of that money that was dished out there,

409
00:23:31,240 --> 00:23:33,130
everybody, and it's the
smartest thing they've done,

410
00:23:34,150 --> 00:23:38,500
and they fully subsidized LRP
and gave a federal crop insurance

411
00:23:38,500 --> 00:23:39,333
program,

412
00:23:39,400 --> 00:23:43,840
a federal insurance program
to livestock producers.

413
00:23:44,380 --> 00:23:47,690
And now all of a sudden it opens
up this door to risk management.

414
00:23:48,260 --> 00:23:51,650
Futures and options are super
complex. I mean, we got margin calls,

415
00:23:51,650 --> 00:23:54,590
we got brokerage accounts. So anybody
that's got less than 500 cows,

416
00:23:55,040 --> 00:23:58,280
if they showed up to my
doorstep and knocked on my
door five years ago and said,

417
00:23:58,280 --> 00:24:00,500
Hey, Casey, help me market manage my risk,

418
00:24:00,800 --> 00:24:02,900
I'd probably tell 'em
that I can't do anything.

419
00:24:02,900 --> 00:24:05,450
Or it wasn't wise to do
anything because I mean,

420
00:24:05,450 --> 00:24:08,840
you hear all kinds of stories where some
slick back Chicago broker showed up to

421
00:24:08,840 --> 00:24:11,900
a ranch and they took their
money after the market went up.

422
00:24:13,790 --> 00:24:15,290
So how you use the program now,

423
00:24:15,290 --> 00:24:19,850
so it's offered by the people
that offer it are insurance

424
00:24:19,880 --> 00:24:20,713
agents.

425
00:24:21,770 --> 00:24:26,000
And so you can find your local crop
insurance agent, or I mean blue reef,

426
00:24:26,240 --> 00:24:28,880
if we fit you, you can call up
any of our people that we do it.

427
00:24:29,090 --> 00:24:33,920
We try to be very focused on
straight up LRP or cattle to do

428
00:24:33,920 --> 00:24:34,753
so.

429
00:24:35,480 --> 00:24:40,400
It gives you the ability to
go out three months from now

430
00:24:40,640 --> 00:24:45,260
up to a year from now and ensure
that animal in a different class.

431
00:24:45,980 --> 00:24:47,510
At different levels too, right?

432
00:24:47,510 --> 00:24:50,690
Yeah. So different price levels.
Yeah, so different coverage levels.

433
00:24:52,400 --> 00:24:53,840
So lemme give you an example of that.

434
00:24:54,320 --> 00:24:56,810
Let's say the cattle market's
two 70 a year from now,

435
00:24:57,560 --> 00:25:02,510
that is based off the feeder
cattle index for a 750 pound steer

436
00:25:02,510 --> 00:25:06,890
that's going into the index. All of it
relates to that. So it's cash settled

437
00:25:09,170 --> 00:25:13,610
whenever you can ensure up
to a hundred percent of that

438
00:25:13,610 --> 00:25:17,540
value and then down to
20 or 30% of that value.

439
00:25:17,720 --> 00:25:22,370
So think about it like you want to
ensure full value or you want to ensure

440
00:25:22,370 --> 00:25:23,480
50% of the value.

441
00:25:23,570 --> 00:25:28,340
So is it sex tied to is steers
and heifers together or they got

442
00:25:28,340 --> 00:25:28,970
separate value?

443
00:25:28,970 --> 00:25:29,900
So on fed cattle,

444
00:25:29,900 --> 00:25:32,570
it steers and heifers together because
there's really no price disparity on

445
00:25:32,570 --> 00:25:34,580
those as far as per a
hundred weight values go.

446
00:25:35,000 --> 00:25:36,440
On the feeder cattle side of things.

447
00:25:36,440 --> 00:25:40,850
What they've tried to do to differentiate
steers and heifers and in heavier

448
00:25:40,850 --> 00:25:42,740
feeder cattle and lighter feeder calves,

449
00:25:44,150 --> 00:25:45,980
they have basically four criteria.

450
00:25:46,280 --> 00:25:50,600
So you have steers and heifers above

451
00:25:51,110 --> 00:25:53,390
750 pounds, or I'm sorry,

452
00:25:53,390 --> 00:25:58,070
above 600 pounds and then
steers and heifers below 599

453
00:25:58,070 --> 00:26:00,560
pounds. But everything
bases off of the index.

454
00:26:03,170 --> 00:26:07,310
You take the quoted futures price
out there, whatever month it is,

455
00:26:07,640 --> 00:26:10,550
and the quotes come out every
day. But generally speaking,

456
00:26:10,610 --> 00:26:15,560
the heifers are a 10% reduction in
value of what your coverage price is.

457
00:26:16,730 --> 00:26:19,670
And then the lighter
weight cattle are an index.

458
00:26:19,670 --> 00:26:24,470
It's 10% above what the futures
price is. So that gets all confusing,

459
00:26:24,470 --> 00:26:25,340
but at the end of the day,

460
00:26:25,340 --> 00:26:27,200
what I tell people is always
look at the feeder board.

461
00:26:27,500 --> 00:26:29,570
It doesn't necessarily matter
if you got to steer a heifer.

462
00:26:29,570 --> 00:26:32,630
It does whenever you got to write the
policy and then whenever you got to prove

463
00:26:32,630 --> 00:26:35,000
ownership. But outside of that,

464
00:26:35,000 --> 00:26:39,710
the price is always going to settle
back to the USDA feeder index.

465
00:26:40,820 --> 00:26:45,540
I think the big thing that I share with
my customers is I don't know all the ins

466
00:26:45,540 --> 00:26:49,170
and outs. That's where you make your
living. They get your phone number.

467
00:26:49,170 --> 00:26:54,120
And I do encourage 'em to give it some
consideration at the levels that we're

468
00:26:54,120 --> 00:26:58,650
at now, especially if they're
answering to a banker.

469
00:26:58,650 --> 00:27:02,880
And I think that's part of why we haven't
seen heifer retention just explode,

470
00:27:04,440 --> 00:27:09,000
is because there's interest to pay and
you can get rid of a lot of interest

471
00:27:09,000 --> 00:27:12,330
right now with the here
for market the way it.

472
00:27:12,330 --> 00:27:13,860
Is, just think about a scenario like this.

473
00:27:13,860 --> 00:27:16,470
Let's say I'm a guy and I'm 25 years
old and I'm getting out of college,

474
00:27:16,470 --> 00:27:18,840
and you go buy a load of cows.
I mean that load of cows,

475
00:27:19,770 --> 00:27:21,480
I'm probably not that great with math,

476
00:27:21,480 --> 00:27:24,030
but let's say that load
of cows five years ago,

477
00:27:24,030 --> 00:27:27,600
if you'd have been a guy that graduated
college five years ago and you wanted to

478
00:27:27,600 --> 00:27:30,060
get into this business, or you're leaving
the ranch and you want to get into it,

479
00:27:30,450 --> 00:27:34,650
load of cows cost you five
years ago, 35, 40 grand,

480
00:27:35,460 --> 00:27:37,290
right? 50 grand. Is that right? Yeah.

481
00:27:38,010 --> 00:27:40,470
A thousand bucks a hit or something
like that. And then, I mean,

482
00:27:40,470 --> 00:27:43,890
I thought a $1,500 cow three or four
or five years ago was crazy high.

483
00:27:44,130 --> 00:27:48,630
And now we got these cows that are
worth three times that three grand.

484
00:27:48,660 --> 00:27:52,950
So let's say you go out there. So it's
not necessarily how high the marketing

485
00:27:52,950 --> 00:27:56,490
go. What's the downside risk?
Well, the downside risk,

486
00:27:56,490 --> 00:28:00,960
if you put up $500 in your own money
to go buy that cow and leverage it,

487
00:28:01,860 --> 00:28:04,830
the market's got a thousand
dollars downside, not potential,

488
00:28:04,830 --> 00:28:09,690
but I mean it could go down there,
but now you could go buy those cows,

489
00:28:10,470 --> 00:28:12,180
do an unborn calf policy on them,

490
00:28:12,840 --> 00:28:14,640
on the calves that the
cows are going to produce,

491
00:28:14,820 --> 00:28:19,080
and you could ensure the
gestating cow's value.

492
00:28:19,380 --> 00:28:24,090
So if the market broke and it went
down, you'd be able to have a file,

493
00:28:24,090 --> 00:28:24,900
a claim on that,

494
00:28:24,900 --> 00:28:29,580
on the market dropping and then collect
that premium and thus reducing the cost

495
00:28:29,580 --> 00:28:32,070
of your cow. Theoretically, if
you look at it that way, I mean,

496
00:28:32,070 --> 00:28:32,850
those things cost.

497
00:28:32,850 --> 00:28:37,080
I would tell you a roundabout figures
70 to a hundred dollars a head to insure

498
00:28:37,080 --> 00:28:41,240
that calf anymore, that's what the
interest rate interest costs are.

499
00:28:41,240 --> 00:28:44,430
So It's all sunk. I mean, I
look at it like sunk costs.

500
00:28:44,430 --> 00:28:47,310
So a lot of these guys that are starting
into this business and doing it and

501
00:28:47,310 --> 00:28:50,910
trying to run their business like a
business, they're putting it in as,

502
00:28:51,990 --> 00:28:54,510
I mean just kind of cost of doing
Business. It's like cost of gain,

503
00:28:56,250 --> 00:28:59,250
like trucking
Or any other insurance. I mean,

504
00:28:59,250 --> 00:29:02,190
we don't buy insurance on our house
hoping that our house burns down.

505
00:29:03,990 --> 00:29:07,680
That would obviously be way more costly
than anything else. But we insure all

506
00:29:07,680 --> 00:29:10,080
those things. We insure our
car, we insure our house.

507
00:29:10,320 --> 00:29:12,930
Why wouldn't we insure what's
paying for our house in our car?

508
00:29:13,080 --> 00:29:15,480
Yeah, it's just not traditional
to think about it that way.

509
00:29:15,480 --> 00:29:20,250
But I would rather guys really learn
and dig deep and understand it and

510
00:29:20,790 --> 00:29:24,540
do it or have it than step
back if something happens.

511
00:29:24,540 --> 00:29:28,440
And I'm not saying it ever will, and
I never wanted to. I mean, obviously,

512
00:29:28,440 --> 00:29:31,860
but if something happens
and then we're sitting here

513
00:29:33,900 --> 00:29:37,260
and having some devastation and we don't
have it. But in the cattle business,

514
00:29:37,260 --> 00:29:39,120
that's usually the big
thing that we get. I mean,

515
00:29:39,690 --> 00:29:43,330
you can insure against drought
with PRF and things like that,

516
00:29:44,200 --> 00:29:48,490
but everybody's not necessarily looked
at cattle price. We just always,

517
00:29:48,490 --> 00:29:51,580
and I say this all the time, Dennis,
and some people have laughed at it,

518
00:29:51,580 --> 00:29:55,870
but I always say the thing that I
hear the most is people will say,

519
00:29:56,410 --> 00:29:59,590
I hope that this thing stays
together. And I always just say,

520
00:29:59,590 --> 00:30:04,510
Hope's not a strategy. We can do
things about it. And I'll tell you,

521
00:30:04,510 --> 00:30:07,780
that's the best thing that's happened
in the last best thing that came out of

522
00:30:07,780 --> 00:30:08,560
Covid, honestly,

523
00:30:08,560 --> 00:30:13,390
is the ability for people
to manage risk on a smaller

524
00:30:13,390 --> 00:30:17,290
scale. We didn't have that before.
The big guys use the futures market,

525
00:30:19,420 --> 00:30:23,350
and that's been, I find it,

526
00:30:23,590 --> 00:30:27,790
there's younger guys anyway
that's had some education about

527
00:30:30,430 --> 00:30:32,710
commodities, commodity brokering.

528
00:30:33,010 --> 00:30:35,800
The younger guys I'm finding
are using it to a degree,

529
00:30:36,280 --> 00:30:40,870
whether it's a put or a call or
whatever. And when I say young thirties,

530
00:30:41,020 --> 00:30:42,550
your age kind of guys.

531
00:30:42,580 --> 00:30:44,740
Well, you're young until you're
over 40. We've established that.

532
00:30:44,740 --> 00:30:47,020
By, we've established it. We're finally.

533
00:30:48,880 --> 00:30:49,510
I'm 44.

534
00:30:49,510 --> 00:30:49,810
Today.

535
00:30:49,810 --> 00:30:53,260
So I mean, it's like, yeah, we're
finally, we're there respecting this a.

536
00:30:53,260 --> 00:30:55,960
Little bit. But the last
big runup in 20 14, 15,

537
00:30:55,960 --> 00:31:00,070
I had a handful of customers that were
four or five years out of college.

538
00:31:00,070 --> 00:31:02,320
They weighed right into
$3,000. Brett Heifers.

539
00:31:02,530 --> 00:31:05,740
Guess who won't buy one
now is that generation,

540
00:31:05,770 --> 00:31:08,020
because it took 'em 10 years
to get worked out of that.

541
00:31:08,020 --> 00:31:12,310
They were borrowing money. And
don't be afraid. Don't be afraid.

542
00:31:12,760 --> 00:31:14,650
Be afraid of

543
00:31:16,150 --> 00:31:19,900
being afraid of an unknown
will get you in trouble.

544
00:31:20,350 --> 00:31:24,940
But managing to what could
be the unknown will be,

545
00:31:25,330 --> 00:31:26,590
that'll keep you around.

546
00:31:29,320 --> 00:31:32,260
Well, Dennis, we appreciate
you coming on today.

547
00:31:33,670 --> 00:31:36,520
Great segment here. You got anything else?

548
00:31:36,520 --> 00:31:39,880
You kind of want to ask for some of your
customer base or your buyer base as far

549
00:31:39,880 --> 00:31:41,860
as we go along here?

550
00:31:42,040 --> 00:31:44,650
I'd like to take this chair
with me. It makes me feel tall.

551
00:31:46,690 --> 00:31:47,710
Well, you look extremely tall.

552
00:31:47,710 --> 00:31:51,430
Well, I'm not going to touch that one.

553
00:31:52,780 --> 00:31:56,560
So we got that booster seat in
Barbara's truck if you need it to take.

554
00:31:58,270 --> 00:32:01,750
Anyway. No, I appreciate the
opportunity and I'm glad to be here.

555
00:32:01,750 --> 00:32:04,390
And I'm very excited about
what we've got going.

556
00:32:04,450 --> 00:32:09,100
And I'm even more excited to be able to

557
00:32:09,310 --> 00:32:12,460
enhance what my customer's
potential might be through this,

558
00:32:13,210 --> 00:32:16,840
particularly from a buyer's side of it
and their comfort zone with all of it.

559
00:32:18,670 --> 00:32:23,320
The seller side, the friend
side, they're excited. I've had

560
00:32:25,270 --> 00:32:29,350
just nearly a hundred percent
positive feedback on it.

561
00:32:30,130 --> 00:32:34,810
I had probably better feedback from
buyers that have watched and seen what we

562
00:32:34,810 --> 00:32:35,560
got going on,

563
00:32:35,560 --> 00:32:40,040
and I think give us a chance to
make things better for you and the

564
00:32:40,040 --> 00:32:44,090
family. And I think
there's bright days ahead.

565
00:32:44,200 --> 00:32:48,260
Yeah. Thank you again. Thank you, Casey.

566
00:32:48,590 --> 00:32:53,000
Thank you guys for watching and
being a part of it. Once again,

567
00:32:53,000 --> 00:32:55,880
thanks for watching. We live
it, the Live Ag podcast.

568
00:32:56,660 --> 00:33:00,080
We want to welcome any industry
partners that want to come on,

569
00:33:00,080 --> 00:33:03,050
just go to the live Ag Live ag.com,

570
00:33:04,130 --> 00:33:05,990
look up our marketing people there, Katie,

571
00:33:06,290 --> 00:33:10,490
look up Katie's website or email,
I guess I should say there.

572
00:33:10,730 --> 00:33:14,570
Email her and get in touch with any
of us if you want to be a part of it.

573
00:33:14,990 --> 00:33:17,750
Any of the industry leaders out
there that want to join the podcast,

574
00:33:17,960 --> 00:33:22,460
come on and talk over some things.
We welcome you to reach out to.

575
00:33:22,460 --> 00:33:26,120
We'd love to have you. So once again,
thank you, Casey. Thank you, Dennis.

576
00:33:26,900 --> 00:33:29,090
Thank you all for watching
and we'll see you next time.