Slide 1

Practice, Makes Preconditioning Pay

Today, I am going to talk about preconditioning. The old adage of practice makes perfect holds true for working cattle, just as it does for most of the things we do in life.

1TODAYS GOALLay the foundation to develop a management plan aimed at increasing herd profitability with a preconditioning program.

I recognize that conditions and circumstances vary with geography, weather, finances, personalities, objectives and on and on. I will focus on flexibility and innovation, not cookie cutter solutions.

I do not have a magical template for success that will automatically get you the highest prices for your cattle. Ill present to you some basic principles and ideas that you can work on and adapt to your business.

Like everything else in life, the amount of time, practice and effort you invest will determine your level of success.2TODAYS REALITYCalves are sold, but not really marketed for sale.

Planning and management with a team of advisors is not prioritized or practiced.

Unloading the gooseneck at the local auction is not a marketing plan! Selling to the same order buyer year after year with no competing bids is not a marketing plan either.

Ranchers by nature are independent and self-sufficient. It is time to recognize that the next level, higher than independence, is interdependence. Interdependence is where we grow and expand our circle of influence; where we make things happen versus reacting to what happens to us.

3OUR AGENDABuilding An Advisory Team

Preconditioning Practices

Marketing

Team Building develop a beef management team of advisors in health, nutrition, finances, range management, genetics and marketing. Team building will be our foundation for developing relationships, a positive reputation and credibility in the marketplace.

Preconditioning Practices develop plans, execute plans, evaluate results, adapt changes as needed and update practices. Management practices are our tools to create desirable products that customers want to buy.

Marketing We want to assume a pro-active role in marketing; step outside our comfort zone and promote our product to competing buyers. Marketing is our tool to differentiate our cattle from others, create demand for our cattle and close the sale for the best possible price. 4BENEFITSIncreased Profitability.

Greater Flexibility In Marketing.

Strip away all the fancy terminology and you have just this: more money! More money to expand the business, to leave a legacy for our children, to expand our education, to support charities dear to us and to explore new opportunities.5TEAM BUILDINGKey Resource AdvisorsHerd Health VeterinarianExtension EducatorOther Advisers:HealthRange ManagementNutritionGeneticsFinancesMarketing

Beef production is becoming increasingly complex, so relying on advisers to help guide you will yield the best results. Successfully incorporating managerial skills and practices into your business will take time and practice. Accordingly, your team will grow stronger and more proficient over time as well.

Develop an atmosphere of synergy, not compromise. Your advisors should compliment and compensate for each others strengths and weaknesses. In compromise, 1 + 1 = 1.5. But with synergy 1 + 1 = 3 or 5 or 15!

Keep in mind that you may need to alter the make-up of your team if the chemistry just isnt there. Just like a pro sports team, you may need to trade some players or hire a new coach. Dont just give up when you dont achieve perfection on your first attempt. Adapt and move on!6TEAM BUILDINGSet attainable goals.

Plan and execute strategies.

Evaluate results and adapt accordingly.

Use your advisor team to set realistic goals and plan practices to meet those goals. Maybe those practices are baby steps over several years, but the key is to always move a little closer to your goal.7PRECONDITIONING PRACTICESPurdue Extension summary of 11 years of data from an Indiana beef herd, 1999-2009.

(W. Mark Hilton, DVM, Diplomate ABVP-beef cattle, Veterinary Clinical Services; Nicole Olynk, PhD, Agricultural Economics; Purdue University, Managing Your Beef Herd: Highlighting Key Determinants of Success in Preconditioning.)

Nearly all studies show an advantage for the buyer purchasing preconditioned calves: reduced morbidity and mortality; as well as improved gain and feed efficiency compared to non-preconditioned cattle. The question has been if the producer of preconditioned calves receives equal financial benefits.

Im going to grant you that our conditions in the Southwest vary greatly from the conditions in this Purdue study, our input costs and cattle markets are not going to be the same. However, the principles of four key factors still hold true even if our numbers here dont match up exactly.

The four key factors are: Team Building, Weight Gain, Herd Health & Nutrition and Marketing Preconditioned Calves.8PRECONDITIONING PRACTICESTeam Building

Practice makes perfect.Average $37.28/calf 1999-2001 Average $91.41/ calf 2007-2009

This herd averaged a return above the non-preconditioned calf price of $37.28/calf during the first three years and $91.41/calf in years 9-11. The owner and his advisor team evaluated their results, adapted changes and improved over time with practice.

9PRECONDITIONING PRACTICESWeight Gain

Pounds pay.1-1.5 lbs./day versus 2.5-3 lbs./day gain

Efficiency pays.

Calves gaining only 1-1.5 pounds/day have the majority of their nutrition going to maintenance functions, while calves gaining 2.5-3 pounds/day have the majority going toward weight gain. You get paid for gain, not maintenance. Develop a ration where 2.5-3 pounds/day gain is possible.

Newly weaned calves are very efficient in converting feedstuffs to beef. The cost per pound of gain generally increases as calves get heavier, so adding these cheapest pounds is very cost effective and best done on the ranch of origin.10PRECONDITIONING PRACTICESWeight GainMore days equals more profit. Negative or zero gain the first week after stress is:25% of 30 days or 10% of 70 days

Newly weaned calves are stressed and the weight gain the first week postweaning can be negative to miniscule. If we have a 30-day preconditioning program, the first week of around zero gain is about 25% of our total time. If we precondition for 70 days, the first week becomes an almost insignificant 10% of the overall preconditioning period.

11PRECONDITIONING PRACTICESHerd Health & Nutrition

NutritionBalanced ration for growth, muscle.HealthTheres no place like home!

Work with your nutritionist to provide your calves with a balanced ration that optimizes growth rate: adding muscle, not fat.

Calves weaned in a low-stress manner on the ranch of origin experience minimal health concerns. Morbidity rates under 2% and mortality rates under 0.5% are common. With a solid vaccination, weaning, nutrition and environmental plan, health problems should be nearly non-existent.

12PRECONDITIONING PRACTICESMarketing and Bonus

Focus on the first 3 Key FactorsTeam BuildingWeight GainHerd Health & Nutrition

The data in the Purdue study showed that 63% of the profit for preconditioning was because of added weight sold, and only 37% because of the bonus. Focusing on management practices, weight gain, health and nutrition provide the best opportunity to make preconditioning pay.

To obtain a bonus for preconditioning or anything else related to our cattle, we need to take an active role in marketing.13MARKETINGTrain yourself to exceed expectations

FranklinCovey www.franklincovey.comFirst ask yourself, am I doing the right thing, before asking, am I doing things right. Stephen Covey

Jeffrey Gitomerwww.gitomer.comPeople dont like to be sold, but they love to buy! Jeffrey Gitomer

Scott Deming www.scottdemingesp.com

The key aspect to any sales and marketing endeavor is building strong, lasting relationships based on trust and respect. And like anything else in life that is worthwhile, it takes effort, diligence and a little elbow grease. Invest some time in yourself to learn from the best.

FranklinCovey is not merely a scheduling tool. Stephen Coveys books guide you in developing your own strengths in relationships, setting priorities, leadership and expanding your circle of influence.

Jeffrey Gitomer is a dynamic individual with helpful tools in his books, on his website, in his weekly Sales Caffeine e-mail and brief Sales Rant videos. Jeffreys material is fresh, fun and thought provoking.

Scott Deming discusses emotional branding and going beyond developing customer loyalty to create evangelists; customers so satisfied that they praise you and your product.

Nothing in their material is specific to cattle marketing, but as you dive into their work I think youll find that the natural laws of the principles they discuss are universal.14MARKETINGKnow potential buyers and the current market.

CattleFax, NCBA, NMCGA, etc.

Online and print publications

Smart phone apps

To effectively use your time and resources marketing your cattle, you have to know potential buyers and current market conditions.

There are a multitude of information sources available; some require a subscription while others are free. Choose what works best for you.15MARKETINGContact potential buyers, follow-up.

Face-to-face contactsElectronic contactsSocial Media contactsAuctions, Video AuctionsIndustry networking

Personal contact is at the top of the list because it trumps all other forms of communication. We all know that instinctively, but we also instinctively look for the easiest way to get the job done.

All other forms of communication need to enhance personal contacts or facilitate face-to-face meetings. 16ConclusionAgendaBuild Advisory Team

Preconditioning Practices

Marketing

BenefitsIncreased Profitability.

Greater Flexibility in marketing.

Lets review: We looked at selecting an advisory team of experts to formulate a plan, execute and evaluate management practices and finally adapt changes as needed.

We looked at four factors that are key to success and profitability in preconditioning calves.

Finally, we touched on some marketing tips to push your sales to the next level. Remember, the larger your network; the more widely your name, reputation and product are known, the greater your potential for marketing success.

And why did we cover this topic today? Simple, to reap the benefits, to make more money!17ACTION STEPSForm beef management team of advisers to utilize expertise.

Plan, execute, evaluate, adapt and move on.

Develop marketing skills and grow relationships.Practice makes perfect!

What now? Make a commitment to help yourself and your business. Start today and tomorrow putting together your dream team of beef management advisors. Order a book or audio book on marketing now. Step outside your comfort zone and take a chance on you! 18MY CONTACT INFORMATIONJim Loughead

(480) 235-3551

jkloughead@gmail.com

Thank you for your attention. Please phone or e-mail me any time; I am always happy to hear from you.

You can also find me on Facebook, LinkedIn and Twitter. Again, thank you and Good $elling!19