We Live It | LiveAg's Livestock Marketing Podcast

In this legendary episode of We Live It, Ty and Casey sit down with cattle industry titan Richard Stober, a third-generation cattleman whose livestock marketing career spans over five decades of innovation and success. From trading cattle as a teenager to becoming one of the West's highest-volume buyers—handling 110,000+ head annually—Richard shares his incredible journey through the livestock industry.

Discover how Richard was one of the first pioneers of video cattle auctions in 1980, created the groundbreaking "Value Added Programs" that revolutionized marketing for video auctions, and managed cattle procurement for Harris Ranch Feeding Company's 120,000-head feedyard. Richard drops invaluable knowledge on cattle marketing strategies, shares hard-earned truths about the livestock business, and offers practical advice for preparing the next generation of ag marketers.

Whether you're a seasoned cattle producer, aspiring livestock marketer, or simply passionate about agriculture, this conversation is packed with wisdom from someone who's bought, sold, and marketed millions of head throughout his legendary career. Richard's philosophy says it all: "Love what you do, work hard, and help others along the way—and never stop being a student of your craft."

Thank you to our partners!
- Worthington Angus: https://bid.live-ag.com/events/event/185/worthington-angus-7th-annual-fall-sale
- AgTexas Farm Credit: https://agtexas.com/
- Texas Ranch Sales: https://texasranchsalesllc.com/
- Consign in our Dec. 16 equipment auction: live-ag.com/equipment
- Work with the best. Blue Reef Agri-Marketing offers strategic livestock marketing solutions: https://bluereef.ag/
- Interested in advertising on We Live It? Contact Katy Holdener at katy@live-ag.com

Have questions for next time? Submit yours here: https://heyor.ca/sq3C0d
Ready to market your cattle? Sell on the LiveAg Cattle Xchange or consign to an upcoming video auction. Contact your local rep at www.live-ag.com to get started.

Chapters:
01:18 Intro
01:46 Meet our Guest
02:48 Richard's Legendary Background
06:32 Being a Student of the Market
08:36 The First Video Auction in California
13:07 Creation of Western Video Market
22:00 Understanding the Market

Creators and Guests

Host
Ty deCordova
Ty DeCordova is a seasoned professional with more than 25 years of experience in cattle marketing. He spent 20 years at Superior Livestock Auction, including his final years managing the Country Page as well as the block during video auctions. This allowed Ty to develop a deep understanding of the cattle industry's operations and build relationships with cattle buyers on a national level. Ty now oversees all operational aspects of the business, ensuring efficiency and excellence across all areas. Ty comes from a family with a long-standing history in the cattle industry. Growing up in Groesbeck, Texas, he and his brother started their own cattle business during their teenage years, purchasing and selling loads of steers. By the age of 17, Ty was actively involved in buying cattle at sale barns for his father, gaining hands-on experience. This early exposure to the sale-barn environment shaped his lifelong passion and expertise in cattle marketing. Ty continues to run cattle today and is committed to serving the agriculture industry.
Guest
Casey Mabry
Casey comes to Blue Reef following over a decade-long career with Cargill. Casey’s career in the industry started as a cattle buyer in Western Nebraska and Wyoming for six years. Casey then moved to Wichita, KS where he worked in boxed beef pricing with a focus on understanding out front prices and position optimization. Casey then took to cattle procurement as a Strategic Supply Manager where he focused on cattle formula and grid marketing arrangements working with Cargill’s largest suppliers. Casey’s experience in cash and value based marketing of cattle can be a valuable asset to your operation. He has a Bachelor’s Degree from Texas Tech University where he served on the Meats Judging team, and a Masters from Tarleton State University where he coached the Meats Judging team. Casey resides in Brock, TX with his wife Deidrea and daughters Reyse, Avery, and Brooklyn.
Producer
Katy Holdener
Katy Holdener's journey in agricultural communications began on her family's row crop farm in California's Central Valley, where she developed a deep appreciation for the industry. After earning a degree in Agricultural Communications and Economics from Oklahoma State University, Katy has been fortunate to work with respected organizations such as the American Hereford Association, American Angus Association, Superior Livestock Auction and BioZyme, Inc. These experiences have provided her with valuable insights into seedstock and commercial livestock marketing. Katy strives to create effective marketing strategies that support the company and its consignors.

What is We Live It | LiveAg's Livestock Marketing Podcast?

Welcome to the "We Live It" ranch and livestock marketing podcast, where cattle market intelligence meets ranch-ready wisdom. Join hosts Ty deCordova with LiveAg and Casey Mabry with Blue Reef Agri-marketing as they bring you straight-talk market analysis, proven strategies, and insights from industry leaders who understand ranching isn't just a business - it's a way of life.
From livestock market trends to cattle management practices, each episode delivers actionable knowledge to help take your ranching operation to the next level. Whether you're in the saddle or in the truck, tune in for conversations that matter to modern cattlemen. Because we don't just talk about the cattle business...we live it.

Speaker 1:

And I tell him the same thing. If you work hard and you're a student of what you do and you're honest, no matter what happens, you'll make presence of mind enough that when he called the first time to say, you know, a perfect hedge is a sale. So in April 1980 we had a video auction at the Madonna Inn in San Luis Obispo and we had 15,000 cattle in that sale and one of the prerequisites was that you had to sell them. You couldn't no sale them. Video technology had just come out and we went and bought a video camera and recorder and the recording box weighed 25 pounds and it had a big old strap on it and some batteries and we had a camera that the second person had to hold.

Speaker 1:

So I bought all the cattle for Harris and I bought all the cattle for Dave Wood. And my wife used say, how come you don't want to talk when you get home? And I'd tell her,

Speaker 2:

My wife says that to me

Speaker 1:

sometimes I've 104 calls on my phone today, you know? And so all my visiting was pretty much used up by the time I got home.

Speaker 2:

Make make sure my wife listens to this.

Speaker 3:

I'm I'm just kinda wanna sit there

Speaker 2:

and chill.

Speaker 4:

Yeah. That's a head on. We live it. The live ag podcast. Quality cattle deserve premium prices.

Speaker 4:

Consigned to a live egg video auction and capitalize on today's strong market demand. Our upcoming auctions are on your screen and available online at live-ag.com. Contact your local rep to get started. Now here are your hosts, Ty De Cordova and Casey Mabry.

Speaker 3:

Welcome everybody to the We Live It podcast. Thank you all for joining us today. We have special guest here. Casey Mabry is here with me as co host, and then we have a special guest, Richard Stober. And he's been a longtime family friend of my family that we've known quite a long time, and we just kinda wanted to get him on here and share his expertise and all the different things he's knowledgeable in.

Speaker 3:

And Casey and myself are going to sit here and drill you with questions. You're sitting underneath the spotlight, Richard, like we're going to interrogate you.

Speaker 1:

Well, I'll tell it like I remember it. How's that?

Speaker 3:

There you go.

Speaker 1:

Not necessarily 100% accurate.

Speaker 3:

Probably need to leave some of it out.

Speaker 1:

Well, that's another life.

Speaker 3:

Oh, okay. Okay. So because I remember some of it with me, I wish you wouldn't talk about some

Speaker 1:

of that.

Speaker 3:

But no, thanks again for joining us. It's good to see you. It's good to catch up. Kind of give us a background, where you were where you lived, where you were where you come from, where you grew up, talk about your awesome wife. Don't forget that.

Speaker 3:

I'm just gonna try to help you there so you don't forget that part. But, no, let's kind of go into some of your history and some of your back history, then we'll kind of go into some of the things you've learned and goods and bads and all that.

Speaker 1:

Okay. First of all, Ty, your family, you and your dad particularly, have been what I consider good friends of mine in business. And to a certain extent on a personal level too, because I've known you for so long. I met Casey a couple years ago and sounds like a cliche but pretty impressive. And I know a little bit about where he came from and even less about what he does.

Speaker 2:

I think everybody struggles there.

Speaker 3:

Me too.

Speaker 1:

You know, he offered us some wisdom at that time I still remember those conversations that we had at that point. As far as I'm concerned, my dad was a packer buyer and he had five children and I went with him ever since diapers. And I would go to the stockyard and travel with him in the summer and just out of the five I was always with him. And so you kinda, I got a little bit of it just from osmosis and kind of soaks in and you know, growing up always had a lot of questions and my dad was not good about giving answers. He would create more questions and I would go with him and, you know, what will they yield?

Speaker 1:

And he'd tell me, well, you write it down what you think they'll yield and then we'll check. So, I spent a lot of time doing that sort of thing. In high school, at that time, they were harvesting baby Holstein calves, bull calves particularly. So I had a little route and I'd go pick up baby calves and turn them into veal after school and on weekends. So I got started on the slaughter side.

Speaker 1:

Also as I got a little bit older I worked in a packing house pushing cattle sheep and goats up a kill ramp to the Second Floor kill floor. So a lot of experience on that side growing up and got interested wanted to be in the cattle business and turned in a pretty good sized pasture operation. Would myself and some partners would run 12 to 15,000 stocker cattle a year. Did that for a number of years. I've fed cattle ever since I can remember.

Speaker 1:

As soon as I could finance them why I started feeding cattle and limited success from time to time and have things turn on me and I've managed to survive my career and it's a business that I've been in all my life and that I really love, the people. I'm not very active now, I still have cattle on feed, but I'm not covering the country or doing any things that I've done for most of my life. So it's quite an accomplishment for me to be able to stay in business this long if I want to. So that's kind of where I'm at there. I still like to be a student of the market and learn as much as I can from any place that's somewhat creditable.

Speaker 1:

And so I do that pretty much on a daily basis. I watch the markets. I watch the auctions. I don't go set in them anymore. You know, I scratch around trying to figure out a break even on something that's $200 head higher than what I feel comfortable with.

Speaker 1:

So, but I still think of myself as a student. And it's a good part of my focus mentally. I got involved in video marketing early on. In 1979, myself and a partner had about 2,100 heifers turned out and it didn't look very good and we were trying to think of a way that we could optimize our position. And there had been some contract auctions, I think two of them that I recall.

Speaker 1:

One was from a company up in Oregon that was just bought some cattle and on a trade deal was trying to figure a way to get out from under them and that didn't work. And then another one, Ellicott Peak had had a contract auction where they actually advertised it, put the buyers on a bus, hauled them around the Klamath Basin. Okay, let's let's sell this set right there on. So about he sold about 10,000 that way or well, didn't he offered 10,000 and he ended up selling about 2,500. So video technology had just come out and we went and bought a video camera and recorder and the recording box weighed 25 pounds and it had a big old strap on it and some batteries and we had a camera that the second person had to hold and it had a big old cable on it and we went around and we filmed 15,000 cattle is what we had in our first sale and that was in April 1980.

Speaker 1:

We started filming and putting this all together in '79. So in April 1980 we had a video auction at the Madonna Inn in San Luis Obispo and we had 15,000 cattle in that sale And one of the prerequisites was that you had to sell them. You couldn't no sale them. And the other prerequisite was that they had to be in first hands. There were no trader cattle.

Speaker 1:

And the futures limit at that time was a dollar a 100 and so seven days before our sale it had gone down to $1 a 100, which was the limit. And you had to sell them and it was pretty well attended and pretty well irrigated after the sale. Everybody stood around there and started drinking and we had wrecked the market with these 15,000 cattle. Anyway, we offered our 2,100 heifers. You can take 700 or you can take 1,400 or you could take 2,100.

Speaker 1:

And this well known trader is at the bar while the sales going on and he's had a few drinks and he starts bidding on the cattle. And I'm selling, I'm standing next to the auctioneer and I said, Don't sell them to him. Don't sell them to him. He's been drinking. Well, stops and gives a speech.

Speaker 1:

After a while, he's got to sell the cattle and he's the last bidder. At the same time, Jack Harris was sitting in the crowd and he's seen who it was and Jack just sat back and didn't bid anymore. And so, Jack was a big feedlot operator in California at that time and kind of a hip shooter from time to time. Anyway, so we sell them to him and he stumbles through the crowd and paws his way to the front. How many do you want?

Speaker 1:

How many are there? Well, you take seven, fourteen, or 2,100. And the guy says, What are they? I said, What do you mean what are they? Are they steers?

Speaker 1:

No, they're heifers. I'll take them all. So anyway, our requirement was that, you know, you give us $50 a head down in the morning, which never happened. And at 04:00 the next afternoon, which was a Friday, I called Jack Harris and I said, We never got our down money. Would you honor your last bid?

Speaker 1:

And he says, Sure. So I sold them to him. So anyway, that's the way that went. And so anyway, rolls around the next year. And in the meantime, my partner got killed in an airplane wreck.

Speaker 1:

And we had a lot of debt, and he had two little kids and a young wife, and I had a lot of things going on. And so I I end up having to pay for his part of the loss because he's not here and she didn't have it. And that took me a while. So one of my partners in the video auction, Skinner Hardy, who was the auctioneer, said he wanted he would go on with it. Well, I didn't wanna go on with it because I had all these other things going on.

Speaker 4:

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Speaker 4:

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Speaker 1:

So ultimately, they had two more and that evolved into Western video, is going now. So anyway, that was how all that started and I went on to selling three sales a week and I had an angel financer, a fellow by the name of Bob Fulton, and he financed me on 7,500 head of cattle on my own with his money. And that worked out. And after five years, I got the partnership's debt paid off and I was up and running again. And I spent the next fifteen years running 12 to 15,000 cattle on grass and going to auctions.

Speaker 1:

The year before I met Ty, I had handled 120,000 cattle and it had been that way for four or five years and I had four or five guys working for me. So had a lot of balls in the air and that was kind of my life. And you said to mention something about my wife and so we've been together for a long time, four to fifty years. She's done everything but castrate 800 pound bulls. She'd done that too, I guess, if I ask her.

Speaker 1:

So we're at that stage of life now where we can enjoy some of the things that we've earned, and she's pretty good at that too. Yeah. Anyway, So in I had a career change in 2010, and I was working out of Fort Worth, Texas and Rush, Colorado, and I got to come home to California. I just in fact, I was on my way back to California and Dave Wood called me. And Dave was the CEO and COO of Harris Farms and Harris Feeding Company.

Speaker 1:

Harris Farms was a 30,000 acre row crop, 30 crops blueberries, asparagus, limes, oranges, about anything they can grow in California and 120,000 head feed yard. And Mr. Harris was the sole owner and operator of the whole thing and Dave was the manager and COO of the whole thing, CEO as well. And we fed 120,000 cattle. We harvested eleven fifty a day.

Speaker 1:

They all come out of Harris Feeding Company and John Harris owned probably 85% of them. And I did that for fourteen years. I was the head of procurement. I had an 80 year old helper by the name of Don Flanagan. And between the two of us we managed to buy twelve fifty cattle a day for Harris and at the same time Dave Wood had a huge pasture operation and feeding entities and Dave would feed about 30,000 cattle and he ran anywhere from 40 to 60,000 calves, stocker cattle on grass in California.

Speaker 1:

He also had a 3,500 head cow operation in partners with John Lacey. So I bought all the cattle for Harris and I bought all the cattle for Dave Wood. And my wife used to say, How come you don't want to talk when you get home? And I'd tell her.

Speaker 2:

My wife says that to me sometimes.

Speaker 1:

104 calls on my phone today, you know? And so all my visiting was pretty much used up by the time I got home.

Speaker 2:

I need to make sure my wife listens to this.

Speaker 3:

Yeah, just kind of want to sit there

Speaker 1:

and check

Speaker 3:

on that.

Speaker 1:

Yeah, I kind of see her point of view, but you know, I've just emptied out.

Speaker 2:

Oh, trust me.

Speaker 1:

Yeah. And so anyway, had to have a certain amount of reach to come up with that many cattle in a seasonal territory like California. Always I always managed to make it work Dave Wood and John Harris were very good to me, and particularly Dave because he ran the whole show. And up until Mr. Harris's death continued to do that.

Speaker 1:

So that was an opportunity that I never felt like I needed the job and I told him that when we talked about it, going to work for him. But it was one of those aspirational things that I kind of always wanted to do because for a long time they were the biggest user in the West. And the fact that it was so contained, you know, we never bought fat cattle. They all come out of Mr. Harris's yard.

Speaker 1:

And Dave and my feedlot manager had say over the whole thing as to how it operated. And Dave made a huge success out of it. And at the same time, he developed a hugely successful operation of his own and still has it.

Speaker 3:

So

Speaker 1:

that was kind of that part of it all.

Speaker 3:

We was glad you took it. Me and my dad was really and my brother was really glad you took it because he he was he he helped us out when we yeah, it was good. Yeah. Really good. Well

Speaker 1:

Yeah. You buy a lot

Speaker 3:

of cattle there for a while.

Speaker 2:

Yeah. It's a pretty sizable stick right there, isn't it?

Speaker 3:

We buy a lot of cattle for a couple of years there for them. It was it was good. I

Speaker 2:

think So $11.50 a day, what is that like, $3.50?

Speaker 1:

Well, I was gonna say, and always preface this, it sounds like BS, but it's not. I had one 80 year old man that went to three sales a week for four hours at each one. He didn't stay till the end. And, you know, I bought 350,000 to 380,000 cattle a year. And in the fall of the year, I would go to the border for Dave.

Speaker 1:

Mr. Harris didn't run any pasture cattle, but Dave ran a lot of cattle. And I would go down every week to Nogales or El Paso or Douglas and stay down there two or three days and turn around come back. For the most part, Dave was good about sending me down in his airplane. And so I did that October to December.

Speaker 1:

In the meantime, you know, sit alongside the road in Bum Jump Arizona and buy 6,000 cattle on the video in your car on a cell phone. And it's a head scratcher, you know. So, you know, I From a professional standpoint, I've got to meet so many good people and do it with so many good people. And, you know, it's I've lived every dream I ever had. I started off with a pickup and racks.

Speaker 1:

And so I'm very grateful. And this year I was inducted into the cattle marketing hall of fame, which was a total surprise. You know, know, you get this going along and you get older and you think you're clandestine and all of a sudden somebody jumps up and hangs that one on you and you go, what'd I do? And I like to say that just getting to stick around, you know, because you get to see a lot of people come and go. And I've had, I don't know, a dozen proteges.

Speaker 1:

And I tell them the same thing. If you work hard and you're a student of what you do and you're honest, no matter what happens you'll make it. And even in my part of our experience in this business is, you know, at the lowest point, there's always somebody stuck their arm out to help you. And so that's happened.

Speaker 3:

Well, you were sure enough a mentor of mine and someone I looked up to and I learned a tremendous amount from doing what we do. I mean, I can't thank you enough for all the knowledge that you shared with us and continue to share with us. I mean, I know that I could pick up the phone today and call you and say, hey, Richard, I'm in this situation and value your opinion and trust it, knowing that you're gonna give me the best advice you can. And there's very few people that you can trust and do that with. I mean, I can count the ones on one hand that I would do it with.

Speaker 3:

And just for me to you, thanks for that. Mean

Speaker 1:

Well, thank you for saying that. That I appreciate means a lot to me too. So one of the things, and we talked about this briefly before we sat down, is I have business friends that I've talked to over the years forever. And mentioned the fact in that earlier conversation that I told my friend who wanted to take some of the risk out of what he was doing about he called me and said that they want 135 a head to do an LRP and I said, Boy, that's pretty hard to swallow. Yeah, so I what I suggested to him was that he try some option strategy that would leave the top open and see what that would cost.

Speaker 1:

Well instead of $135 he gave $80 he still had his upside open. The reason that cost him 80 for that was he wanted to ensure that he wasn't going to be getting margin calls and have to re up on the options. And I hadn't presence of mind enough that when he called the first time to say you know a perfect hedge is a sale. And I think that's where live ag has an opportunity to simplify the risk because they can can sell the cattle on your next video for next spring or whenever they're gonna want to eliminate those cattle. They can offer them through your venue.

Speaker 1:

You're gonna sell them somewhere I would guess and this is totally a guess, $5 behind what something in the nearby would bring and that may or may not be true. There might be a guy out there that thinks it's going to be a lot better down the road. So that's subjective. The other thing is and you know they're gonna say well I don't know what they're gonna weigh. Well I think most of us know what our cattle have gained on this ranch or that ranch for the last five years and you use an average in the slide.

Speaker 1:

And it's a perfect hedge and there are no margin calls. You'll some down money maybe. I think that's the way it works.

Speaker 3:

And

Speaker 1:

you're set and you have a bit of weather riskgain, but you can take care of part of that or all of it with a slide and a decent estimate. So, I guess if that same guy called me again, that's what I'd say in place of the option strategy.

Speaker 5:

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Speaker 5:

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Speaker 1:

There's not a lot of cattle around for spring other than, you know, your wheat grazing areas. Out that way, where he's at in California, there's not very many adults and there's less this year than there's been in a long time. And I know talking to Casey, he's got other ideas that you know may be viable. But to me the perfect hedge is a sale where somebody's going to take them and be there when you get ready to send them. And it's another option.

Speaker 1:

It's not one size fits all.

Speaker 3:

Mean, it's just like you said, not one size fits all. It's whatever is best for your program. If you understand the option stuff and the the three part protocol or are there LRPs, or if you just want to keep it basic and say, want a contract. Yeah. I want sell these cattle out front.

Speaker 3:

Let's put them on the next sale. Let's sell them. If you want to do something else, contact Casey or one of them guys that does that for a living that can walk you through it. I mean, there's one size don't fit all. It's whatever is best for your outfit.

Speaker 3:

But the simplest and most understandable, in my opinion, is is a contract. Yeah. Let's get them sold. Yeah. Let's get them forward sold, and let's you know?

Speaker 2:

Yeah. It all it depends on a guy's size and what their risk tolerance is. Yeah. And the other thing is, like we talked about this right before, this is the seasonality to it. Like in the spring, as we talk about, like, wheat pasture cattle, a lot of the time, know, guy buys wheat, he's kind of starting to gather those cattle now.

Speaker 2:

He's going to kick them out here, you know, in a couple months or so or a month, depending on different locations on when they're going to go. We like using some, whether it's put options or LRPs. Now the crazy thing is, Richard, you kind of touched on it, is all these options premiums have gotten much higher than what they were before. I was looking back even a year ago, we thought they were high on feeder cattle, and it was $8 put option and a $7 LRP per hundredweight. And then now we're looking at $12.13 dollars a hundredweight because the values have gotten so high and the exposure and the risk is so high.

Speaker 2:

So then it starts to get people backed off on it. It concerns me. I mean, it concerns me because as the market's gone up, the options premiums have gone up, the risk has gone up. And I think people have backed off on what they wanna do because they listen to all of their, whatever it is. And everybody's talking about this, how the cattle have just continued to push higher.

Speaker 1:

Yeah.

Speaker 2:

And everybody thinks that we're not gonna have another animal out there. And so the market's gonna go up forever. And so again, I mean, a lot of guys have backed off their positions. And so one of the things we push a lot is in certain situations, whether it's fat cattle basis contracting those to a packer and trying to eliminate some of the margin risk and margin exposure you got, if guys can do it. And then also forward contracting the cattle through the video auctions and trying to get the best bid there.

Speaker 2:

You know, you touched on it a second ago about selling them at a discount out front. And I think a lot of times it's because we have a discounted futures market out front. We're starting to build a big carry in this market today. I mean, we sit here today at the October, and then you look out front, it's one of the first times in a long time that the futures market is allowing that person that's gonna buy the cattle to offset that exposure on their side. So we're starting to build a carry out there.

Speaker 2:

So, right now probably is the best time, in my opinion, to forward contract something because the market's probably higher later than what it is today. From a fed cattle standpoint here recently, there's been a little bit of pressure because we took the cattle from July and August and overfed those things into September and October. So there's a little bit of a northern pressure, I'd say, right now. And so that's reflected in the futures market as that's the cheapest contract month we got. Then you go out there to the spring months and they're starting to get, you know, a $10 $12 carry out there in some of those months.

Speaker 2:

But I do really, really, really think that your wisdom around utilizing the video auctions out front is something that people really need to listen to. I mean, you're a guy that's been in this business for we talked about it right before this, three or four cattle cycles.

Speaker 1:

Yeah.

Speaker 2:

Most of us have been through one or two that are 45 years old or whatever, you know? I was gonna say this, and I don't wanna shock you when you say this. Your video auction was two months before I was born. Your first video auction. So as I I was listening to you talk, it it and and listening to your your background, it really gave me chills to think about it because I love this business.

Speaker 2:

I didn't grow up in it. My dad trained racehorses. But I love the cattle business, and I've loved to mentor, be a mentee, I guess, of guys like you over that time period. And to listen to you talk about how the things that you really respected from your dad and learned from your dad and sitting there, this is in your blood. And it's, you know, and you've had the opportunity throughout your life to make it a livelihood and probably a very fruitful livelihood on occasion.

Speaker 2:

Depends on what day

Speaker 1:

it is, Yeah. I

Speaker 2:

To be able to, like, circle your career back to the packing side of it. I think it's I think it's awesome. And I I like I said, I want people to listen to your wisdom that you had there, your background, and the history that you talked about. The the the the history in this business will tell us what the future's gonna look like.

Speaker 1:

Every time.

Speaker 2:

And I'm a huge believer in that. And I think a lot of times we lose sight of that. So I appreciate you. I didn't get to say this a second ago. I appreciate you get coming on here and talking to us about it for sure.

Speaker 2:

And then I think back to the first time I'd heard your name in my circle, you know, three or four years ago. And then immediately you came to my office in Weatherford. You drove down and it took you probably three hours to get down there. I remember you leaving my office that day going, man, I just learned more from this guy in an hour and a half or two hours than did for, you know, probably a couple of years when I was at Cargill, you know. But I think that, again, like I said, I think people need to really listen in on what you have to say.

Speaker 2:

Because again, what you've experienced probably gives a little bit of intel on, because none of us know where those things go on as And we move forward there's so much uncertainty, and there's so much excitement, and there's so much, you know, people out there that just think this thing's gonna go on forever. And it could. Well, we know that forever is forever, right? So it won't. But what we wanna make sure of is people don't get stuck in the situations that kind of create, you know, whether it's career ending scenarios, right?

Speaker 2:

So I think it's something that people need to listen to for sure. Yeah.

Speaker 1:

Well, it'll always do the same thing. And black swans, unforeseen circumstances, whatever it is that causes it. And, you know, that's the greatest gift I've gotten is longevity. So I get to choose when I don't want to anymore. And that's, you know, wasn't always that way.

Speaker 1:

There are a lot of things that can happen that I guess we need to go over, but you just have to watch the news and try to inflect that into what somebody else is thinking might do to your operation. Which is just a calling to cover some of the risk And if you're not always going to knock it out of the park, you're not always going to get a double or a triple, sometimes just a base hit and getting around the bases. And know and I've heard it said I've spent more time digging out of bad markets than you know than I ever will trying to enjoy a good one. And it you know it's just fundamentals ultimately kick in and I think you have to watch that. So again, I've been blessed that I got to stay and experience things that, you know, I relish now.

Speaker 1:

So glad to be here. I wish live ag the best. I think an interesting comment that I have is that of all the cattle that are sold in The United States every year, less than 2% of them go to a video market. And that's a big question to me. Why?

Speaker 1:

Why? And there's, you know, there's a lot of viability in it and they're selling a lot of cattle. But if you add it all up, still they're still going through markets, cash markets, weekly markets, and you just wonder why it doesn't. And I wanted to make one more point about getting out in front on a video sale. If you've got X number of calves, can always hold one load back to give yourself a little cushion on the weight or the head count.

Speaker 1:

You know, you don't have to sell every one of them all at once.

Speaker 2:

That makes sense.

Speaker 3:

Yeah, sell 80% or Yeah, 75

Speaker 1:

and that way if it doesn't look like you're going to make the weight, you're going to make the weight on the early calvers, the ones you calve early. But you got a little cushion there and you know if they're coming in light you can can take a few more off and get your weight or get closer to it. So you know it's pretty hard for me to come up with an excuse not to do something when the prophets look like they are, especially on a cow calf guy. I mean, it's just phenomenal what they're bringing.

Speaker 2:

Well, it's like, I always talk about this, Richard. I mean, you've been in this business way longer than I have, but you watch people's demeanor change and you watch their personalities change. And it's like, okay, so a year ago, feeder markets two fifty. I remember the futures market hitting two twenty seven. Let's just say the feeder index probably got down to two thirty five or 40 or something like that.

Speaker 2:

So think about that, two thirty five, two forty ish. So then, you know, we had gone up in a from a futures market at two eighty, but the market never really got there. It got to about $2.60. It set back, and then we come back roaring right after that. Guys that their number used to be like $2.75, $2.80, which they thought we would never be able to achieve again, sold at those levels.

Speaker 2:

So then when they got the next turn of cattle, which is these right now, they're scared to sell them. They were still profitable on the set before. And then now they're sitting here with lots of profit in their hands, but then they say I'm scared to sell. And you're like, the question I always ask them is like, why? Like, what are you what are you scared of?

Speaker 2:

Are you scared somebody else is gonna get more? They're more fearful. Guys, when the market was during COVID, whenever the thing wrecked out, everybody was scared the market was gonna go down. And we were selling cattle for wheat pasture cattle for a buck or a buck 10 or something. Right?

Speaker 2:

And they were still scared the market was gonna go down. And now they're scared the market's gonna go up. It's the weirdest thing. Right? It it conversations with guys are like the fear of the market dropping isn't there anymore for a lot of people.

Speaker 2:

I mean, they just don't think about it. And I think they should more. You made a comment a minute ago, and it just really I can't remember exactly how you said it. But you talk about the tough times in the market. And you said there's always somebody that's like stick their hand out and help you, you know?

Speaker 2:

Or tough times in the business. And I'll tell you personally, this has probably been one of the tougher times that I've had because I'm a market caller. I mean, a guy that kinda educates guys on the market and tries to, you know, help them to understand what their exposure is. And everybody I know in my circle is, I'm gonna say, quote unquote, wrong. Right?

Speaker 2:

So market got to $2.2 or got to $2 that was high fats. They sell it, market gets $2 it's never gonna go any higher than that. They sell it again, dollars 2.2, dollars 2.3, dollars 2.4. And then now even what I gotta make sure of is making sure that I continue to have a very diligent plan around not getting shaky on where that's at. But I think a lot of people have got to make sure that they're not losing sight of what the dynamics and really the velocity of what the market can do.

Speaker 1:

I think another way to say that, and this is what I use, and during all my time at Harris and with Mr. Wood and is Are

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Speaker 1:

One of the things that when you're buying cattle that you need to establish is what's your profit objective? That brings a point of clarity that all of the subjective what ifs and you know, no, you don't want to be wrong, nobody wants to be wrong. But what is your profit objective? And if you're buying cattle that make X and they get to X,

Speaker 2:

sell them.

Speaker 1:

And you'll be there for the last of the market. You're gonna and it's just that simple. It's the profit objective, you know. And I think if I'm a stocker operator and I have this profit objective, the thing that I can do is buy cattle that outperform my expectation, which goes right back to the videos. You can buy and I watch auctions on and they've got it all.

Speaker 1:

They've had it all. Know one of the markets that's kind of leading the front is at least 70% of the calves have had one round of shots. Really? That run Richard I ain't going there. I don't want no part of that.

Speaker 1:

In October you know they're advertising 4,500 calves and 2,800 of them have had a shot and the rest of them you're on your own. That's what I want to optimize and not be wrong on. And the best place to have that happen as a stocker operator is buy them off of a video, direct off a ranch where you got some control over the shipping conditions, okay, and you have an expectation. And we always talk about the premiums and you know these are reputation cattle. Well if I buy Thais cattle and they perform up to my expectation, I'm gonna bid on them again.

Speaker 1:

If they exceed my expectation, I'm gonna try my hardest to buy them. And that's part of the success of the videos. You're buying a known commodity with expectations being met. So if you can exceed those expectations and you have a goal and your profit objective is met, so if I do a good job of buying them, I'm going to increase that automatically. So that's the way I would like to think about it.

Speaker 1:

And, you know, I've bought and fed a lot of these F1 Crosses and they just exceed every expectation from front to back, you know. Lock a pin down for three hundred plus days at whatever you charge yourself or somebody else charges you. Three hundred and some days, know, less than two percent death loss, including suicides, you know.

Speaker 2:

There's of a predictability in there.

Speaker 1:

Yeah, it's there from a labor standpoint in the yard, from the expectation at the bunk to the grade. You know, we we killed a small pin of heifers last week, 93 head. I get 27% prime.

Speaker 3:

Well, have I got a deal for you? Just happen to have auctions.

Speaker 1:

I need I need financing. I'm not

Speaker 3:

gonna I'm just kidding. I might have I got another deal.

Speaker 1:

No. No. No. I'm I'm just kidding.

Speaker 3:

To know a guy.

Speaker 1:

You can you can can build a case for a profit objective that is offsetting to something about being wrong. And if that doesn't get you, why then concentrate on what it is you're buying and help yourself.

Speaker 3:

I bet if we look back and and see all the wrecks that have happened, I I wanna say 80% of them are due to greed.

Speaker 1:

Well,

Speaker 3:

sure. Yeah. They ran past that profit objective. They they didn't they didn't they wanted that home run, not that base hit.

Speaker 1:

Yeah.

Speaker 3:

And we're all guilty of it. All of us. Oh, yeah. I mean, I know I am anyways. And so if you can just tell yourself base hit at a time and do that base hit every day, when the years old was, you're doing pretty good.

Speaker 1:

Or years. Or years, yeah. Years. Yeah. I think that's good thinking.

Speaker 1:

And the whole thing about it is you just have to be consistent and try to improve the buy side and establish what it is you're willing to take or make And when it gets to that, sell it. And a lot of my friends out West sold 900 pound steers at $2.60 this last spring delivery. And then I had one friend that got $2.65 at 9 and a quarter. And I, oh my gosh, they were It's crazy. Could you not?

Speaker 1:

Well, they exceeded their profit expectation, but then they go on and bring $3 or $3.60. What is the difference? So I mean, you're still in business and anyway.

Speaker 3:

I think I'm gonna circle back around and talk to a partner of mine and tell him we're gonna implement this deal. Well I mean, really, I've never looked at it that way, of the profit objective. For what we're wanting to do now, that's sound planning. That's a sound structure.

Speaker 1:

It's just a simplified truth is And, what it you know, like in Casey, he's got people of all sizes. There's probably a certain amount of risk that they can stand and then there's a certain amount they don't want to stand. And, you know, it's kind of gotten to the point now where you buy them and you don't want to stand it. And then that's another set of that's another set of considerations. But

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Speaker 1:

And if you're gonna do if you're gonna do that sort of thinking, why then you need to have somebody like Casey that's pretty up on it.

Speaker 3:

Yeah. Wouldn't want Casey's job right now. No. We we're doing we've we got it easy. And I look over across the street and talk to Casey some days.

Speaker 3:

I'm like, okay, Casey, come off the ledge. Let's go. Let's talk let's talk for a little while.

Speaker 2:

No. It's it's Breathe. Well, it's a it's a weird situation in the market because I'm always been a guy that's been I wanted the market to go up. Even when I was at Cargill. I like being bullish and being excited and the market going higher is it's more fun.

Speaker 2:

Right? And I saw somebody write something down that this is the most hated cattle market rally in history. It's because everybody's already sold. And if you sold already, I mean, feeder cattle are in an all time new highs right now. So anybody that sold it before today is wrong.

Speaker 2:

Wrong, right? If you wanna say that the question or the statement's But they're still right for implementing their plan. That's the one thing we push a whole lot. But the thing that I'm, I mean, I'm telling you, I say this every day to all of my clients every day, is we want to be more covered on the way down than we were on the way up. And my fear is that nothing today tells me that this thing's going lower.

Speaker 2:

No analyst out there is willing to step up on the stage and say, you know what, we're gonna over expand this herd. There's lots of unknowns and uncertainties. You talked about buying cattle on the border. Today, wouldn't be able to buy those cattle on the border. They're not coming across.

Speaker 2:

That's probably been the biggest lift to this market, not having those million head come across the border. We're one policy change away from that changing.

Speaker 1:

Exactly. And

Speaker 2:

so I don't know if they're gonna open that thing up. It doesn't look like it, but who knows? It's a big guess. And there's lots of unknowns. But now we're gambling, right?

Speaker 2:

We're spending a lot of money on these cattle. And we're in this weird predicament of we gotta have the cattle to continue to run our operations. The reason why it's hated, nobody likes, The only guy that really likes the market where it's at is the one selling, right, that day. And then he's mad the next day because it went higher and his neighbor got more.

Speaker 3:

I shipped some cattle last week, and I've shipped quite a few cattle up there with this gentleman. Every time we've sold one, we're excited until the next day.

Speaker 2:

Yeah. High fiving.

Speaker 3:

And he's calling me like, what did we do? I'm like, hey. No. No. And then we we go we the next sale next sale we sell higher.

Speaker 3:

And we're like, man, that's awesome. There's only been one time for three days that we were happy. I mean, we were happy for all of them. Don't get me wrong. But three days, we thought, boy, we did the right thing.

Speaker 3:

Did that fourth day, and there it went again. And you're like Well Whatever. But they made money all the way up. So it's

Speaker 1:

just And that's the that's the point. That's the whole point. If you have a profit objective, it simplifies everything about selling. That's It's

Speaker 2:

kind of like the story we were all taught as a little kid when we were growing up, the tortoise and the hare, you know? And so, if you want to be the guy that's with Stanzas and you're around for a long time, your approach has been like more diligent and more planning. And even your demeanor, like, I'm way more high strung than you are, so

Speaker 1:

is Ty.

Speaker 2:

Your demeanor alludes that Well,

Speaker 3:

let's hold up now. Let's talk through this a little bit. I've known him a while.

Speaker 2:

Oh, you're saying he can get ramped up. Yeah. Well, that's somebody that's whenever his plan's going to arrive. Right?

Speaker 3:

When I

Speaker 1:

don't get my objective.

Speaker 3:

When that drop objective in there, that's when he kinda gets fired up. Well, guys, man, Richard, I can't thank you enough for for coming down and agreeing to sit down and visit. I mean, your story, we can sit here and talk for hours on things that you've done. And and I would love to sit here and talk for hours and and and learn more about it and pick your brain and get educated because that's pretty much what me and Casey are doing here is learning. And the best way to do that is to be quiet and let people like yourself talk.

Speaker 3:

We soak it in, like you said with your dad by osmosis. Mean, you just go around with him and you just stay in the background and learn. And that's what I've loved to do from you guys. And I can't thank you enough again for letting us do that. Just appreciate you coming down.

Speaker 3:

Is there anything else you want to kind of cover before we wrap

Speaker 1:

No, up I just like to thank you for the opportunity and thank Casey for being here. I always enjoy his comments. And when I watch a live ag live it, I always get to listen to his. His old boss used to call me on Sundays and I told that story I think to you. And so anyway, I had some cattle on feed at shifts and I thought, well, I'll just call my pal Steve.

Speaker 1:

You're breaking up. Yeah. So this is the guy, you know, I'd be driving my feed wagon on Sunday and he'd call, you know, and primarily at that point he was asking me about these Angus cross scans, unless you're going to see a lot more of them. Yeah. And anyway, all that.

Speaker 2:

It's amazing. And not to like make this a whole lot longer, but to your point a minute ago, the cattle were 27% prime, the cattle have been the same.

Speaker 1:

Yeah.

Speaker 2:

They've improved to some small degree. But Richard, you remember like three or four years ago, we couldn't even sell these things.

Speaker 1:

That was my reason for calling Steve.

Speaker 2:

It a struggle.

Speaker 1:

Because I was

Speaker 3:

And he was in bad area.

Speaker 1:

Yeah, I was getting hit over the head.

Speaker 2:

Yeah, they were treating him like a Holstein steer.

Speaker 1:

Yeah. And there's still some of that up in the northern auctions, know. They'll sell an Angus dairy cross and hell he's $7 back and he's $15 ahead of him in the cooler, you know. Oh, that's not real. It's not honest.

Speaker 1:

It's just not honest.

Speaker 2:

Well, it's all perception of value. And then like, we let human interaction involve, you know, too much bias into that,

Speaker 1:

you know? Well, those cattle are the most uniform, packer accepted and you know, I've said this enough, they're the white hog, you know, they're the leg horn chicken. They're the ideal packer animal because when they get them in the cooler, they're easy to sell piece at a time. That's what they want, you know. I had I want to say 47% CAD, you know.

Speaker 2:

Oh, it's okay.

Speaker 1:

Upper third of choice grade. And it's that way consistently. And we were talking about some of these calf razors that are using specific genetics and they're beating that all the heck, as you know. They're beating those numbers all the heck. And they're just a phenomenal animal.

Speaker 3:

I've seen the results of what we call the cuts. I mean, what we call the cut. We sort them off, they're non loadable Yeah. And they feed

Speaker 1:

them. It's amazing.

Speaker 3:

There's no difference.

Speaker 1:

Yeah.

Speaker 3:

I mean, it's when you look at them, you're like, well, this is gonna hurt. No. You get the sheet back and they're like

Speaker 1:

Yeah.

Speaker 3:

It's it's wild.

Speaker 2:

The craziest thing is we determine value based off of a person's visual appraisal of animals and then bias in history, right?

Speaker 1:

I gotta tell you about one. We're standing in front of a set of cattle and it was a Cargill buyer.

Speaker 2:

Hopefully it was me.

Speaker 1:

No, wasn't you. We're standing there by this pen of cattle and he comes driving up, gets out and I said, What do you think of our F1s? They're fat, you know, they're standing there, just beautiful. And he starts looking around all over and there's a pen, the smaller ones down there. And he says, Well, I guess they'll be all right.

Speaker 1:

He had no idea what he was looking at. And, you know, the uniformity, the age is they're young cattle. They got a greater propensity to be tender. Just a lot of things. And I know Dave Wood's model, we were $50,000 $60,000 ahead on purchases of those things.

Speaker 1:

We just they just performed up and passed every expectation. And the one place they do fall down is on carcass yield, I mean live yield. So, you know, and so what they've done now is they've set the bar higher where they got a yield 63.5, which they'll never do. And they've moved that grade requirement up to 65 and they've moved the prime price, you know, 3 or $4 a 100 just just because they can. So just, you know anyway, all that.

Speaker 1:

Well. Just glad to be here. Like we

Speaker 2:

can get a lot deeper right here.

Speaker 1:

Yeah. It's just it looked

Speaker 3:

like it's pretty good deep,

Speaker 1:

so Yeah. We better quit.

Speaker 3:

We better step in here. Thank you once again. Casey, thank you. Richard, appreciate you joining us. Thanks to everybody out there in social media and YouTube land.

Speaker 3:

We appreciate you joining us with the We Live It podcast. Don't forget to hit subscribe and like. Also, if you are interested in, any advertisement or joining or being on the show, reach out to Katie at live dash ag dot com, or just go to the website at live-ag.com and, send us a message through there. We will get back to you and reach out to you. So once again, and God bless.