Practically Ranching

#8 - Shawn Tiffany, Marketing Quality

July 13, 2022 Matt Perrier Season 1 Episode 8
Practically Ranching
#8 - Shawn Tiffany, Marketing Quality
Show Notes Transcript

Shawn Tiffany and his brother, Shane, own and manage Tiffany Cattle Company, Inc, a complete cattle feeding and marketing service in eastern Kansas. Tiffany Cattle Co. has a one-time capacity of 35,000 head in their three feedyards. Shawn’s primary duties are the farming and grain inventory side of their business, as well as assisting in cattle health, feeding management, marketing and financial aspects of Tiffany Cattle Co. 

Shawn currently serves as President-Elect of the Kansas Livestock Association. In addition, Shawn is part of Elevate Ag, a company that offers products, services and knowledge for regenerative agriculture.

Shawn and his wife, Nicky, spend countless hours educating their family, their community and the world about agriculture and the values that rural America holds dear.

Links:
www.tiffanycattle.com
www.elevateag.com
www.Wingit.us
Twitter: @Shawn_Tiffany

Market to Market Podcast: www.iowapbs.org/shows/mtom/mtom-podcast/podcast/7827/taking-hat-congress-talk-cattle-shawn-tiffany

Matt:

Welcome to practically ranching. I'm your host, Matt Perrier. Each episode, we'll deliver a mixed ration of tradition, business philosophy, and the emotions evoked when these principles collide. We won't try to make you the world's smartest rancher. That's not our goal. But each week we will hold a discussion that will stimulate critical thought, broaden our perspective and help determine practical solutions for the challenges facing ranchers today. And in the process, we may even offer some worthwhile wisdom while we are practically ranching. This week's guest on practically ranching is Shawn Tiffany, Sean hails from the greater council Grove- Herington, Kansas areas. Where he is a little bit of everything, depending on, what day you catch him. Sean's a cattle feeder. He is a farmer. He's an entrepreneur. He's a pilot. He is a leader in countless organizations on the local, state and even national levels. He and his wife, Nikki have restored an old building on the main drag of council Grove called the Territory Ballroom. He is a Christian. He is a father. And a family man and one that doesn't do anything halfway. And I think you'll find out as we visit in this conversation, we're going to cover a lot of topics, but, um, Sean's pretty well versed in all of them. We're going to touch on regenerative agriculture, cover crops and some new methods to do farming the old way you might say. We're going to talk about some history of, of. Beef cattle production and especially marketing. We're going to talk about a family, starting a business from scratch. Another one of those great All-American stories about Shawn and his brother, Shane and their families taking a, a feed yard, purchasing that from someone that had been a special part of their family for a couple of generations, but them taking ownership and growing that business. And then we're going to talk about some issues that our beef community has been dealing with in terms of fed cattle marketing, and, and, working with different segments in the one beef concept. And this topic that we finally get to on this episode... this is the topic that I had in mind when I created practically ranching and this whole concept of a podcast. This is the topic that I have wrassled with for my entire professional life in beef cattle production. This marketing topic that we're still dealing with today for at least two or three decades of my life has been the one that divides the beef community. Depending on what segment of the industry that you're in, depending on what association you may belong to or what coffee shop you most recently attended. This is the one that pits neighbor against neighbor. And segment against segment. And association against association. And yet this is the one in my opinion that probably needs the most thought. And the most interaction amongst all of us. and so I'm, I'm tickled. Yes, Sean. And I see things fairly similarly, and I'm going to have, if I can get it done, I'm going to have some folks on this podcast to talk about this same issue that may not see things exactly like I do. Uh, but thus far, Shawn has been the only one that I have been able to get on here and talk with me about this. And I think it's a good a good jumping off spot as we discuss these issues. And, hopefully helps get us on the right track of thinking and learning and, and dealing with, the, the pieces of the marketing issue. And I think it's one that we're going to continue to discuss and, and hopefully arrive at some answers as we go forward. But, um, I really enjoyed this, this recording. I really enjoyed getting to catch up with my friend, Shawn Tiffany, and I hope you enjoy the end result as well. Tell us a little bit, Shawn Tiffany, about Tiffany cattle company and everything connected.

Shawn:

Well, Tiffany cattle company, has been in business almost 15 years. When we were growing up, our dad managed a feed yard here in the Flint Hills of Kansas named black diamond feeders. And he did that from two or sorry, 1988 to oh two Shane and I grew up in the feed yard industry in that yard, uh, went to college, were out pursuing careers and in oh seven, we had the opportunity to buy the yard... A very unique business transition. I was 30. Shane was 28. We had young families and, uh, a lot of blessings, but zero money. And we managed to buy our first feed yard with a handshake as our down payment collateral and Doug Laue, the owner of that facility, uh, was also a, one of the originators of us premium beef. And he was our partner for the first four years and, and taught us the ropes and helped us understand that there's a difference between running a feed yard and working in a feed yard. And that's a, a difficult transition for a lot of people, but, uh, he was there side by side with us and helped us through that. Today, tiffany cattle company is three different facilities. That first facility is now, uh, 19,000 head feed yard in Morris county, Kansas. Uh, five years ago, this month we purchased a 13,000 head feed yard in McPherson county, Kansas. Those are both finishing operations and then just last fall, 2021. We purchased a 3,500 head grow yard in ly county, Kansas. We do considerable farming operations along with that, and then have extensive plant Hills grazing, uh, double stock season. So spring and summer, we'll be starting to gather grass cattle here later this month in July. And so we were blessed with a great team. When we started, we had 2,500 head of cattle on feed, six employees and 10 customers. Today. We are still almost exclusively custom and we have about 40 employees. We'll finish 80, 70 to 80,000 head of cattle a year, and we'll feed for about 200 different entities. One thing that we're super proud of and, and that we love working with our retained ownership customers, probably half of our customer base is gonna be retained ownership. So. Uh, you can expand on what that is, but, you know, we get to work with families just like the pars. And that's a, that's a real pleasure.

Matt:

Well, we enjoy working with, with you all as well and, and good people in the industry. You mentioned something that Doug taught you and Shane... the difference between working in a feed yard and running a feed yard. What's, what's the main, main difference.

Shawn:

Well, I think that's true of every segment of agriculture. You know, Most of us that are in agriculture, started in it because we enjoy working outside. We enjoy working with livestock or plants in some cases, and we're not afraid of hard work and some blood, sweat, and tears, but then transitioning to running a feed yard or ranch or a farm is considerably different in this day and age. I mean, there's a lot of technology. There's a lot of regulation, uh, a lot of paperwork. And so a lot of what I do today are not the things that as a boy, I grew up dreaming of doing or sitting in a classroom at Kansas state university that I was just excited about dealing with taxes and government environmental regulations and, and human resources and, and all that. But as an owner, you know, My time and my skillset is way better served to be at a desk or looking at things from that 30,000 foot view, ensuring that things are done from an owner's perspective with those expectations. And so, you know, I, I get my cowboy in time when the evenings and the weekends, matter of fact, ransom and I are heading into a practice roping this evening. And, but I, I don't, I'm not out in the trenches day in and day out like I used to be. That's a good thing from a business perspective, but, uh, there's days it'd be nice to just go get dirty and, and work all day. But, you know, and I get to do that some, but, you know, I have to focus on big picture and, you know, we'll go through, we'll go through a million pounds of feed a day at our facilities, three and a half million bushels of corn a year. Uh, lots of hay, lots of silage and everything else that goes into feed lot cattle rations. And so that's one of my responsibilities and that alone, just staying in front of that logistic of getting feed to the bunk every day takes a lot of my time as well. I don't know what your, what your audience is comprised of, but I think I've listened to almost all of your podcasts. And I'm probably the first feedlot guy that's been on here. And, you know, those numbers, I just threw out probably sound like big numbers, but in the whole scheme of the Kansas feedlot industry and, and really the United States feedlot industry, we're still one of the smaller yards, uh, in our region. We're, we're one of the larger ones, but, uh, our size, we're happy with our size, from the standpoint that we're large enough to be able to provide our customers with great relationships with Packers that, uh, want the type of cattle that we're feeding, but we're still small enough that we can do a lot of program cattle. So natural programs, NHTC programs, uh, we feed some Wagyus and just really be able to tailor feeding programs to what our customer's needs are. And that, that takes a lot more management than just running a feed yard that everything's getting fed the same diets and being marketed the same way.

Matt:

No, no doubt about it. It's um, that end point, and we'll talk a little bit more at length, but, um, marketing cattle, the way that gets those owners, the most value back isn't easy. Um, and, and having those options, I. Is why a lot of customers come your way for sure. Um, let's talk a little bit about the feed and the, crops that go into that feed. You all raise a good percentage of that yourselves, do you not?

Shawn:

Yeah. We raise, uh, a hundred percent of our silage, a good percentage of our dry roughage input. So the haze and the straws that go into our diets, and then, you know, a lot of our acres are devoted to corn production because we can, we can retail that through the feed yard. But when you put that into perspective, you know, three and a half million bushels of corn a year, I can raise depending on the year, you know, 150,000 bushels. And so the corn component. It's, you know, we just, it would be a ridiculous amount of acres that we would have to farm. That said, though, a lot of our corn, we buy direct from our neighbors, uh, whether they have on farm storage, uh, that they store that corn into the winter months. But we also have a pretty robust high moisture corn program at our two finishing facilities. And that has really worked out well for our regional farm economy to have a different option to market grains, primarily because where we're located, Matt, if they don't, if their corn doesn't come to us, whether that's direct or through a local co-op that corn's gotta move at least a hundred miles to get to another sizeable feed yard or an ethanol plant, or an end user where they're gonna see the full value of that. So having, having that endpoint locally is a pretty important thing for our local farm economy.

Matt:

Yeah, as you were talking about that and, and, um, buying buying local, uh, buying feed locally, the raising it yourself and, or buying it from some of the local farmers. It reminded me of a, a speech that I heard a little over a year ago with beef improvement Federation. And it was actually from a hog guy by the name of Jim Pillen. I believe that was his name. He was running for governor, I believe up in Nebraska. Anyway, he runs a sizable pure line seed, stock, hog operation up there. And he talked about the reason or one of the reasons that they've grown this hog operation as much as they had was to provide an outlet for both their own corn and that of their neighbors. Because as he quoted there, every bushel of corn we sell out of our county or out of our state. I'm giving away our top soil. And I thought that was really, really interesting because he recognized that the nutrients, the energy, everything else that, that corn had to offer the livestock industry could be recycled and readministered and put right back onto those fields. As long as they fed it close. But if they shipped a bushel of corn out, they were shipping more than just number two yellow. 60 pounds. They were sending out phosphorous sulf for nitrogen, everything else, and basically exporting top soil from that region in Nebraska. And I know you've worked a lot with regenerative agriculture and, and I can't tell you how many conferences I've seen you at about cover crops and no-till and you name it. Um, talk a little bit about that on the farm side of getting those, crops and those feed stuffs, not just to the cattle, but in a way that is as close to mimicking mother nature as, as

Shawn:

possible. Well, so, uh, neither my brother or I. Grew up farming to speak of. We were, we grew up in a cattle family and when we bought black diamond feeders, all of a sudden we were farming 1200 acres. And, and I became the farm manager when we were divvying up responsibilities because my resume said that I had grown a garden for three years and years. And that's, that's not much of a qualification to, to manage a 1200 acre farm. And, and our farming operations have grown considerably since then, but that lack of experience and frankly, that paradigm foundation didn't exist. And so what that allowed us to do was look at farming from a, a very unique perspective and frankly, as a blank slate. So we were one of the first in our area to start planting cover crops and grazing them. And, and I can't sit here and say that there was Altru altruistic motives behind that, that we were gonna impact the environment. I mean, frankly just didn't know enough about it to have that goal. We were just trying to create another line of business for our customers that would benefit them, but also add to our bottom line. And we were already grazing Flint Hill's grass in the summertime in the spring. So it made pretty, pretty good sense to plant cover crops in the off season and graze cattle in the fall, in the winter for our customers. And, and it's been a really great fit. Uh, but I do remember the old timers talking about us, uh, through the grapevine, finding out that what are these two young Cowboys doing raising turn ups in Morris county, Kansas, but, uh, I believe it's a good thing that cover crops have have caught on. I think it's great for the environment. I think it's really important to be cycling nutrients outta the atmosphere and into the soil and sequestering carbon 12 months out of the year. And, our cover crop program has actually grown to cover crops on every acre, 12 months out of the year. So we're in a continuous cover cropping system. Now since 2019, uh, there's been, there's been a learning process in that, you know, when you innovate or you're the first in your region to attempt something, uh, oftentimes that comes with some learning curves. But, but we're passionate about that. We're passionate about our environment. We're certainly passionate about the Flint Hills of Kansas, a very unique ecosystem that you and I both get to live in and wake up to every day. And so that, that comes with a great deal of responsibility to steward whatever we've been entrusted with for a time.

Matt:

Yeah. I don't think I realized, but I believe we started our cover crops at the exact same time. And I'll take you a step further when we planted them for the first three years that we tried it, I didn't even know what a cover crop was. We called it a grazing crop and like yourself, that's all it was, was a way for us to cut down feeding days for a cow herd in an area of the country that is as good as it gets from may until September-ish. And outside of that, those cows go awfully hungry if you're not hauling feed to 'em. And so we took our little bit of farmed acres here at Dell banks and, and the first year we spread aerial or not Ariel, we with a fertilizer spreader spread turnips and a little bit of nitrogen fertilizer to, to carry it on a field of chopped silage corn. And we got a two inch rain about a week later in about an hour and a half. And we've washed every one of those seeds down into furrows and had Jills of little baby six inch turnips. And I thought, well, this is a wreck should have never tried it. Well, the next year we mixed it in with some other wheat and barley and, and other mix and no-till drilled it. And the next thing I knew, we were like yourself, we set a goal of, of planting every single field that we raise a cash crop from back to cover crops within 48 hours. And, and, um, like you said, have something green and grow in 12 months of the year is, is the goal. But, uh, uh, yeah, it's, it's pretty, pretty wild what those cover crops can do and the nutrients they can provide and then let those animals urinate and defecate and fertilize the. The ground themselves. One thing that you have done over and above, well, over and above what I have done thus far on, on, uh, cover cropping and no-till and all that good stuff is your work with elevate ag and, and more what I'd call regenerative agriculture. Tell us a little bit about what you're seeing and learning and, and, doing there.

Shawn:

So. Elevate ag. Actually, when I started working with them, they went by a different name and we had been working with this company since 2017, started using some of their products and replacement of fungicides, particularly in our wheat crop. Uh, and in 2019, that company was going through some restructuring and it gave us an opportunity to buy in as partners. And we rebranded did a lot of different things, added a lot of, uh, products. And so today the only fungicides I use, are a little bit for research purposes and that's motivated purely as an owner, but for the most part, we've gone away from fungicides and started using biologicals and feel like we're seeing similar, if not better results, both in yield, but plant health and, uh, actually even our protein content on our wheat. So, so no different than a rancher or cattleman expects to get paid more if they have a prime Carcas versus a choice or select Carcas I approach farming the same way. And so, you know, if my protein on my wheat's 13.5%, but our regions bringing in 10 or 11% wheat, I expect to get paid for that. And so I raise wheat with that goal in mind but then I market it that way as well. And, and we've, we've been seeing that. And I think it's partly because of our elevated a products, our reduced dependency on synthetics, but then also our focus on soil health. I think when we have a healthier medium to grow plants in it, it correlates to healthier plants and not just healthier plants for the consumer, whether that consumer be a human being, buying a loaf of bread or a steer or heifer the feed, lot eating corn of the bunk. But I also think that, uh, what we're doing with that healthier plant is it can resist things like a fungicide pressure or an insect pressure, uh, because just like, if you and I have a healthy immune system, we may not be as concerned or susceptible to, an immunological challenge. Those plants, uh, can thrive in their environment as well and naturally resist those, pressures that come on them in, in nature.

Matt:

Yeah. It's um, I think that would fit pretty well with today's consumer interests of, you know, the least inputs, the least technologies, the least everything. I mean, I, I will argue that we still, obviously farmers and ranchers, regardless of whether they're conventional farming, whether they're, uh, tilling or no, till doesn't matter what practices we use, we're still doing everything we can to raise the most wholesome, healthy, safest food supply in the world. But I think we're seeing within agriculture, beef industry, farming, you name it, some opportunities to not only get closer to way mother nature was doing it without us. Um, but also maybe as we look at fertilizer, fuel, everything else, prices that we've seen, maybe lower our input costs and, um, maintain, or even reduce outputs a little bit, and yet still have more profit at the end. And, and that's where I think some of these, these tools that you're looking at, uh, on the farming side of things and agronomy side of things are, are pretty interesting.

Shawn:

I couldn't agree more, Matt. I mean, I get to travel the country. Uh, matter of fact, I've got an opportunity to go speak in Canada, this winter about what people see as new technology, but in reality, it's very old technology that we just abandoned because of cheap fertility inputs, uh, herbicide inputs. And, and I don't think those things are necessarily bad in and of themselves. I still use Roundup at times and GMOs at times, but I'm also working with non GMOs and lessening our dependency on, chemistry. And the simple way to put it is in our farming operation. I am approaching it more from a biological standpoint than a, than a chemical standpoint. And that's partly because I think that's where we need to head, but frankly in college I hated chemistry and I, I loved biology. So it makes way more sense to me, and I think a lot of the things that we put in our farming operations are maybe not unnecessary, but we overuse those. I'm not gonna name names, but you know, I think a lot of the big seed companies I'm, I'm a bit jaded, Matt. And I think a lot of the, the big seed companies are no longer seed companies, they're chemical companies. The seed is just the vehicle that they get their chemistry in our operations. And so I've taken a little bit different approach and, and found some other companies that they don't market chemicals. And so I can get non GMO corn, uh, from them much cheaper than I can, maybe the major seed companies. And it's because they don't care. They're not trying to sell me chemicals. And so they don't care what I put out there and we're seeing. Uh, on my crop tour this morning, some of the finest corn I saw today was non GMO corn. Now that doesn't fit in every situation. You know, there's a time I need that Roundup because there's a, a particular weed pressure, or I may need, you know, corn bore technology because I've raised corn on that piece of ground for several years. But I don't think we need that high dollar seed that high dollar chemical in every circumstance. And I also think a lot of times in terms of fertility that we're putting on way more than perhaps what is necessary and perhaps what even the plant can, can take up. Uh, you talked about our, our manure and we're producing compost. Now we use that for fertility in our own operations. That is organic nitrogen. So the plant doesn't have to convert it from inorganic to organic to use it. It's just immediately available for the plant, but we market that to a lot of, uh, like-minded farmers and individuals throughout, uh, Eastern Kansas. And, you know, right now we're in a very inflationary environment throughout our culture, but especially in farming input. So fertilizer and a lot of this chemistry is higher than it's ever been in my career. But in some ways I think that's a good thing because that financial pain is making people think a little bit different. Well, do I need that extra nitrogen out there that I used to put on just because it was cheap? you know, and, and people are looking at getting by with less, like you said, maybe giving up a little bit of yield, but focusing more on dollars per acre than bushels per acre. And. I don't think that's all bad. I, I think painful periods can be a good thing. That's, that's where we really move the needle.

Matt:

Okay. That's what it takes to grow, whether it be in our personal lives or in an industry or a business, we rarely make the hard decisions and make the growth decisions when times are really good. Um, costs are low. Revenues are high, whatever the case may be. It's when times get tough that we sit down and, and say, okay, what do we need to do to make this work? And, um, that leads me into another topic that, uh, I think would be pretty good for you to weigh in on, and you'll have to take your seed corn cap off and, and put your cowboy hat on. Um, you are currently president elect of the Kansas livestock association. And with that position, I saw that you got to go out to Washington DC and testify in front of the Senate ag committee. Is that correct? About some different bills that are out there talking about marketing in the beef cattle area, fed cattle market, to be specific? Um, you know, you talked about different options that you think that farmers should have, whether they want to use GMO or non GMO seed, whether they want to use chemistry or biologicals, whether they want to, you know, do conventional till, or no-till all these different options. Let's figure out what works best for that farm or that field. And let's have the opportunity to use it. I listened to your, uh, interview and I would encourage anybody that's listened to the pit, this podcast to either hit pause or after we're done here, go over to the market to market podcast, which I believe is the Iowa PBS station. Was that right?

Shawn:

That's correct.

Matt:

And listen in to about a 30 minute podcast you did with them. We're not going to rework that ground, um, because he did a great job. I thought of asking you why you felt the way you did about, some of the bills that are going out there and, and telling us in the beef industry, how the government feels like we should market fed cattle. But give me, I guess first give me the Sean Tiffany opinion of, why you feel the way you do about some of the, the congressional bills out there that they're being talked about in the catalog industry. And then let's talk a little bit about what got us to this point and why it is that the government's trying to get involved in, into our business.

Shawn:

Man, I think I'll start with what got us to this point and you can weigh in and piece in, but, you know, I, uh, was a high schooler and, and went through college in the 1990s. I actually graduated K state 2000. And during that decade, we were really transitioning as an industry, at least with the better cattle in our industry, away from cash, cattle, trade to formula trade, and no different than the way I think I should get paid more if my wheat's better than my neighbors. Cattlemen that had a superior product were saying, you know what? I should get paid more than just getting the average of all the cattle price to the feedlot. And so the difference between cash trade cash trade are they're negotiated on the hoof formula trade or, uh, grid trade is actually, once that animal's been harvested, the hides been peeled off and you can look at the quality of the individual animal. And so that was a slow transition in the 1990s. You know, it was a, a small percentage of the cattle marketed that way. And, and what that did was it, it rapidly increased the quality of the cowherd throughout the United States. And perhaps more importantly, the dining experience of our consumers in, in the cattle industry, you know, people eating at restaurants and buying beef at the grocery store. And, and it really increased the demand for our product because of consistency and palatability and just overall eating experience to where today, uh, you know, a higher percentage of cattle are sold on the grid than a much higher percentage than, than when that program first started in the 1990s. my customer base, like I alluded to earlier, is largely retained ownership customers. The reason that they retain ownership on those calves is because they do have a superior product. They want to be paid for it, and they want to know how every individual cap performed on feed and, uh, at harvest through Carcas quality. And the only way to get that information back to their ranches, to where they can make breeding decisions and genetic improvements is to sell them on a formula situation. The Packer's under zero obligation to share Carcas data back to the rancher if it's a cash trade. We at Tiffany cattle company, or, and frankly throughout the industry are doing more and more negotiated grid trade, which is a good thing. Uh, I think that that helps maybe solidify price discovery, but you know, when I was testifying in DC, Dr. Steven Koontz from Colorado state university, he's an economist with some very solid and sound numbers and analysis of this issue, the numbers that he put forward to where if this bill were to get passed, it suggests that it could take a lot of profitability out of the entire beef complex, not just feed lots, but all the way back down to the cow calf sector. The other problem with this bill, and then I'll let you kind of weigh into Matt, but it does not require that cattle producers or cattle feeders market, a percentage of cattle on the grid or through negotiated trade. What it does do is it requires that the Packers purchase a percentage through cash trade, uh, 50% actually. And that's problematic, because it takes even more control away from the producer and customers like mine who want to get that Carcas data and sell on the grid, they may or may, may not get that chance because the Packers already bought that 50% from a larger facility or, you know, somebody else. And then all of a sudden, the way that I use the marketing means that I use to make our customers profitable is no longer at my disposal. And then they're back just in a commodity system trying to sell a superior product for an average price. And that, that could be extremely detrimental.

Matt:

Yeah. There'd be a lot of people that are hearing us talk about this right now saying, yeah, you're talking about taking profitability out of the system and stealing that away from every margin producer and, and then in the end, the cow calf producer... there's not a lot of profit profitability left to steal out of there. And I, I know I can hear some folks saying that to themselves as we speak. Um, I think that's one reason why we've got people talking about this. and when I say this the way we, I'm gonna say price discovery of fed cattle. And, and that to me is the issue. And I'll, I'll back up in just a second of how I feel like we got here, but my opinion is very similar to what you said, but to me, that's the issue. It's not do we, or don't we ask the government for help. Um, I know there are people who feel like that's the only way out. I'm not one of those. I have as Dr. Fields said, and in the previous podcast, I have yet to see an instance when the government comes into a business and makes things better than they were before their intervention, um, backing up a step. So I, I I'm a few years older than you. I think we figured out four. Um, I was a senior in college in 96 and when I was getting ready to graduate, I've told this story before, but when I was getting ready to graduate, I was trying to figure out what I was gonna do. Am I gonna go home? Am I gonna get a real job? Whatever. Um, I went down to the DTN machine in the lobby or that open area of Weber hall. Calvin Drake always said, if you're gonna be a student of the industry, you better know what the markets are. So I went down to the DTN machine, figured out how to get up to cash trade in Western, Kansas. And we were selling. Fed cattle for 64 cents a pound. 96 was not a fun time to be in the industry. I think caves actually, as I've said this before were a couple cents behind that even per pound, it was a mess. It was an absolute disaster and people were POed. And that's why folks got together and created some models like us premium beef, uh, like future beef operations, which is no more, but came up with some ideas and some technologies that have been used and a plant that has been, that is being used today. Um, GeneNet, ranchers Renaissance, the, you know, beef marketing group, there, there, the list is, is lengthy of all of the different capitalistic notions, of folks saying, how do we do a better job of getting the consumer's dollar on back through the beef industry to send the right signals for us to produce the right cattle and to raise them the way that the consumer wants, and to deliver what it is that consumer says they'll pay more money for. Because up to that point, I remember riding with a pretty sizable cattle feeder in the panhandle of Texas and Penn after Penn, after Penn was this hodgepodge of color of horns and poles of humps and no humps of whole, a few Holsteins. I mean, there were just enough in each pen good ones to get that pen traded. And then you had to take the bad ones as well. And then they all went down the rail and they all went into the same box. And we wondered why we had a consistency and quality issue when it came time to send 'em to the retail case. So some of these companies that we just mentioned that started there in that quality revolution in the mid nineties, they came about and... I mean, I will never forget having this conversation with some of the style wars in the industry. And here I am 22 years old, graduating from K state and talking about what a great company and I'll use us premium beef. You all are members. My folks own a few units as well. Us premium beef to me was the answer to all of the issues that we had with the beef industry, and these big feed yards chuckled and said, how in the world are you gonna get a packer to buy a cattle like that? It's either cash or grade and yield or grade and steal as we called it back, then they're not gonna go for these grids. You seed stock guys can talk quality and consumer demand and everything else, all you want. They don't wanna do it that way and turns out they didn't. And until a couple of these either built their own plant, future beef or bought into an existing company, us premium beef, they couldn't get the Packers to even consider buying them on these formulas and grids. Um, now there were some feeding entities that went together, made some long term contracts and, and, and those were probably a little bit different than what these value-based marketing arrangements were. But I guess that long Diri is, is to say that this is not, this is not an issue that the packer was at fault of creating. ,We, as producers asked for this, and I think it worked, it worked so well that now we have unintended consequences of that in that we have moved so many cattle to these value based grids formulas, aMAs, whatever you wanna lump 'em all into... that there may ...not some would say there are, but there may not be quite enough cattle in the negotiated cash trade to set the base. My opinion is that we need to address the problem and not the symptom. The problem is we need a better way to price the base for these grids and formulas and, and AMAs to be either premiums or discounts from there than negotiated cash cattle. Um, I think that the, the thin cash market is a symptom of the overlying problem, and that is that we created a good value based marketing system. What we now need to create since it's worked so well is a good price discovery system for the base. Whether we base that off of a, a box beef or off of a retail price or whatever the case may be. Um, I think there's a better mouse trap out there than going back to the way we sold them in 1985 on cash. Um, you can agree or disagree, but, but that's where I feel like we're at

Shawn:

I actually com completely agree. Uh, Texas a and M's data, Dr. KO's data suggests that the, the volume of cash cattle trade needed to have effective price discovery is shockingly small, but, uh, I've also said, why would we continue to do something the way we did it 30 years ago for an industry that has advanced far beyond those pricing me mechanisms and, I think there's potentially some problems in what I'm gonna suggest right now. Some people that are smarter than me say, well, you know, we gotta be careful in crafting that too, but I would argue the American consumer does not buy cattle, never has bought cattle and they will not buy cattle. They buy beef and you alluded to this, but I think box beef price should be at least a portion of that foundation price. Because ultimately, I, I think a lot of cattle producers that don't finish, they just sell their calves at winning at the sale barn or direct to a feed lot... I think there's this mindset. That're cattle, producers, and really cattle don't have any value. If they can't be turned into beef, there is zero value in raisin cattle. And so for that reason, I feel like box beef price should be at least a component of it because ultimately that's where our product is ending up. Uh, and no different than, you know, selling alternators doesn't have much value unless there's a vehicle to put 'em in, and all of that end sale flows back down to every supplier in that supply chain, and it's gotta be divvied up. And I, I think part of the reason that this is so emotional right now is that divvying up has been very inequitable in the last few years. And there's a lot of reasons for that... supply and demand, uh, logistical reasons COVID uh, but I think why this has gotten to be such a hot topic right now is because a motion has entered in, particularly in the early stages of the beef supply chain and folks are tired of looking at Packers, making tremendous profits, but barely scraping by at the ranch level. And, and, uh, I don't disagree with that sentiment, but I disagree with the solution. And the fact of the matter is the Packers are not our enemy. We cannot do this without them, but the same is true of them. They can't do it without us. And so you alluded or spoke of a better mouse trap. I think we need a better mouse trap. Yeah. And I think, I think our industry needs to figure out that out, not our government.

Matt:

Yeah. And that, and that's where I'm at. Um, back to the box beef index. I have, I have felt for years that that had to be a component of it. Now I have been told by plenty of people, if you don't like the volatility that we've seen in the beef price, live cattle prices up and down. And every which way, since 2000 10, 11, 12, um, don't tie yourself to the box beef index because it'll get even Wilder. But I think that it's still with a little math, with a little weighting with a little averaging, I think that it can be at least an indicator of, of getting us. We ,we've gotten so much closer to responding to the consumer's demand and the signals that they're sending to tell us what and how much they want. Um, it just makes sense to me to, um, to work that into it. So I, I think to me that that has to be a part of it. Um, question for you. I've got lots of them, but today's feed yard manager, owner, both. I, if, if. If Senator Grassley waived the wa the mag bond, and tomorrow we were selling 50% of the cattle across the us in a negotiated manner. And we didn't get time to go back and learn from the feed yard managers of the 1970s, eighties, early nineties... can today's ...and I'm not asking you to throw any people under the bus, but can today's feed yard manager who has kind of made negotiating those sales of fed cattle every Thursday or Friday afternoon, um, a small part, if at all of their daily task list, would we not implode the industry because we've got a skillset that thanks to formula and contract pricing has kind of gone away out of our, our toolbox in the feed yard manager's offices.

Shawn:

Listen, we're cattlemen. We'll figure it out. Okay. Uh, we always do, but that's my brother's area of responsibility and I'm glad it's his, because he never gets away from it. Yeah. If cash cattle trade develops on a Monday and he was at a kid's event, guess what he's doing? Uh, he happens to be on vacation this week and I guarantee you he's somewhere in the mountains of New Mexico with his family and they're probably out hiking. And when cash trade develops this week, he's gonna have to park it and he's gonna start trading cattle. Now I have a good friend, actually, you and I both have a good friend that manages and is a partner in a yard out by garden city, Kansas. And he's feeding largely the same type of cattle that I'm feeding, but his marketing plan is he does more cash trade than grid trade. He uses both. uh, my job as a feed yard operator, my brother and nice job. Our sole responsibility. If you wanted to boil it down into one little nutshell is to make our customers as much money as we possibly can. Now there's a lot of things that orb around that take as good of care as their cattle, animal wellbeing, all of that, taking care of our employees, our, our people, but ultimately I'm a service provider, and my job is to make ranchers and farmers money. And, uh, they work too hard to expect anything less. And based off of our relationships, we use AMAs and grids on a high percentage of those cattle, not all of them, but a high percentage. We are doing more and more negotiated cash trade, which falls under that 50%. I think that's certainly an answer. To be honest with you, Matt, I think we're going to get to that 50% of negotiated trade, whether that be cash on the ho or negotiated grid trade. Of our own accord, uh, without a government mandate, you know, there's more to this than just the, the Senate bill 40 30, that does the mandate. There's also expanded LMR reporting regions that, that, much of the industry is supporting. And then, uh, this cattle contract library, my concern is that we do too much at once and we don't know what was effective. Yeah. And so I feel like we need to give the contract or the cattle contract library and the expanded reporting areas, time to work and analyze that data before we try going and fixing so many things and throwing so much stuff against the wall to see what sticks that we don't know what was effective and what wasn't.

Matt:

Yeah, that's a good point. That's a good point. And I mean, all the while we're hearing about the need for more packing capacity, which. I don't disagree with, I don't know how that works. When the 10 year cattle cycle and drought and everything else that's affecting, that cattle cycle from the supply side, I don't know how we get a bunch of small and mid-sized regional Packers built in time when we need 'em and not have those things go dark or get owned by the folks that we think are, are, uh, robbing us blind already, uh, for 10 cents on the dollar. And so there's just, like you said, there's so many different things at work here, um, besides just one segment of our industry that is making a much, much larger percentage of the profit, uh, than anybody else right now that, I, I, I think it's additive. I think it all goes into it. Um, it is the leverage and it is cattle numbers and it is the market dynamics. And you know, all these events that have, um, have been another, roadblock at, at finally getting some or gaining some of that leverage back to the production side. Um, but then you throw in the labor issues, the trucking issues, the, the fact that some of the same discussions we're having about trying to market our product-- cattle --to our customer-- The packing plants-- they're having the same thing with marketing to an ever consolidating retail industry and ever changing consumer. And the, the way that they buy that beef, um, you know, more specialty beef lines and more mail order beef and, and all these things. So there's just a lot of change that's already happening, throwing 16 other things into the mix. Uh, plus uncle Sam probably, um, we need to be careful what we wish for, I guess. Well, Matt, I see myself as a realist and I, I try to look at the big picture and put myself in other shoes. Uh, you know, the span of your in my career, everybody's talking about packer concentration now. Well, that hasn't changed since you and I graduated college. Now they have closed some plants that maybe were antiquated or had some problems with them, maybe weren't profitable. And frankly, that's what a good businessman does is he stops the bleeding where he can, but there's been so much government regulation and so many government burdens that there's been zero incentive for them to build on additional packing capacity. Uh, the other thing that I would add in this conversation, speaking of trying to look at the whole big picture. I mean, if we feel like there's too much concentration in the packing industry, uh, where do we stop as a government and as a nation? Right.

Shawn:

Are we gonna, are we gonna go after Ford and general motors next? Uh, what about Walmart and target? You know, this is a product of capitalism, capitalism drives concentration. And I don't know whether that's a good thing or a bad thing, but I would really like to ask our politicians at what point do we quit? Who are we going after next?

Matt:

Yeah. The efficiencies of production and scale and just flat out barriers to entry in a lot of these capital intensive segments of our industry. One being the, the packer processor level. Um, there have been plenty of people within our industry, producers who have said there is a need for more packing capacity and have tried to address that need by either partnering or working together and, and, and build their own or expand a small facility and, um, quite frankly, yeah, it takes a lot of money, but issues such as government regulation and finding labor are probably even bigger stumbling blocks to those than the obvious ones of, of multi-billion dollar, uh, renovations or, or construction tabs. Um, and then you have got to recognize the cattle cycle, whether we like it or not, but by the time those plants get built in three to five years, where are we? We're right back in a short supply, especially as many cows as we've sold in the last eight to 12 months. And they're having to fight over those cattle, which is great for the producer, but for the producers that own those plants or whomever, uh, maybe not so much. I think everybody that's listening to this probably has a pretty decent handle on how cattle are traded today, but let's give a really, really brief simplistic, description of what negotiated cash cattle are, what value based grid, cattle, how that transaction occurs, uh, maybe the difference between formula and grid cattle, and then one that's probably a little newer development and, and some people might not be as familiar with a negotiated grid.

Shawn:

Well, so negotiated cash trades, what our industry did for decades, uh, clear back to when every cattleman finished out his own cattle on his operation, up until the nineties. And then even until today, you know, a cattle buyer that represents one of the Packers shows up once a week, we, as a feed yard, give him the show list. What the show list is, is we may have 10 pens that are on the show list, that means we're willing to show them to the cattle buyer. And he goes out and looks at 'em evaluates them for quality. What he, and that guy's gotta be a pretty talented individual. He's gotta be a live Stockman that knows cattle can kind of predict how those cattle are gonna do on, you know, not on a grid, but how that carcass is gonna quality grade yield grade. And then based off of market factors, demand, supply, and what he thinks the quality of that animal is, or how bad they need cattle to run through the plant that week he makes a offer. And then as a feed lot, we work with, we say you know, the Packer's bidding 1 38, are you willing to take that? And they say, no, I'm holding out for one 40. Well, then the, we say no, and this is back and forth. Uh, But then the one weakness or shortcoming to that is how those cattle actually quality graded that data never gets back to the ranch level. On a cash trade deal, the minute those cattle get weighed up... So on one side of the scale, they belong to the feed lot or to the, the cattle feeder. And on the other side of the scale, they belong to the packer. A grid, a formula program. Uh, those cattle belong to the cattle feeder all the way up until they're harvested. The hides pulled off a U S D a GRA is gonna factor in back fat, ribeye area, several different markers and determine this, animal's a yield grade three, and he's a low prime and the grids are negotiated amongst the board annually, maybe biannually, and those benchmarks determine what that animal's worth. And the foundation currently is usually in, in the state of Kansas. It's the Kansas average. Uh, that's one of the other fallacies with this Senate bill is how do I put this? Uh, the authors are trying to imply that, that, what goes on in Kansas impacts other states and it doesn't. Kansas average sets the Kansas foundation, just like other regions do the same for that region. Uh, but, but then that's how that price discovery occurs. Now a negotiated grid is much the same from a yield grade and a quality grade standpoint, but that foundation price is negotiated. So before those cattle leave the feed lot, the packer says we're gonna do a grid and we'll use 1 38 as the average. And then the cattle owner can say, well, yeah, I'm happy with that. Or no, I want a dollar 39 or a dollar 40. So that's how those different things work. Negotiated grid is a fairly new marketing concept. I shouldn't say it may not be a new concept, but it's, it's gaining traction in the industry and more and more cattle or, um, are, uh, being marketed that way. And frankly, that's in an attempt to take control of this situation as an industry and not be told how to do it.

Matt:

How much does today as we talk about just the cash negotiated cash trade, how much does hedging and these wildly swinging basis, um, that we have to deal with, that we get to deal with. However, we wanna talk about it. I can't tell you the number of times, whether it be cattle that we have fed or folks that I have talked with, say, you know, on bid, as you said, a buck 38 this week, um, I think we can get another dollar or $2 by next week because the market's moving, but we've got a two and a half dollars basis and we're gonna make more off the hedge if we sell 'em this week than if we probably wait till next and they do it. And so from a profit and loss standpoint, that makes sense to the guy who owns the cattle, makes happy customer for the guy feeding the cattle and yet from a market and a leverage standpoint, we just shrugged our shoulders and said, it's not worth it to us to try to play hardball knowing that we can get two more outta the cash market next week is, is that, is that a, is that a thing or am I just dreaming

Shawn:

so hedging plays a big role in all of this and especially in the larger yards, you know, where they own all the cattle and they're working with multiple hedges at the same time. You know, that's a big part of that risk management strategy. And frankly, one that I probably don't understand as well as those guys do, but that's because that's not how we manage risk in Tiffany cattle company. Now, if my customers want to hedge those cattle, you know, they'll do that through their own broker that they're used to working with, or we can team 'em up with a broker, but Shane and I do not take positions on behalf of our customers, just because there's so much risk there. Um, so that's, that's a real thing, cuz like you said, they can make money on the hedge. So they don't really care what they get for the cash price and that can influence some of those decisions to sell. But you know, in that negotiated deal, we tell customers that if you choose to not sell your cattle this week, there's a whole lot of bad things that could happen. The cattle market could go down. The cattle market could stay the same. Or you could have an animal die. I mean, the older those animals get the heavier, they get, the more susceptible to, uh, you know, slipping and falling, whatever is, but a lot of people don't understand that the cattle market's staying the same from this week to Dax, well, you lost money because that can animal at that point is costing more than he's ever cost to maintain his body weight. And you got more feet in him. And the only good thing that can happen with waiting is that the market goes up. And I think that's probably another part of this narrative is... a lot of people don't understand how intricate all of this marketing is. For example, Senator Bozeman out of Arkansas, And the written questions that he submitted to me, one of 'em was if a marketing mandate was in place prior to your brother and you going into business, would that have prevented you from starting your company? And my joking, kind of flippant, response was no, because nothing would've ever stopped us from trying to attempt our dream. And that's true of most livestock, man. We're not in this profession to get rich we're in it because we're passionate about it. And we love working with livestock and with, with God's creation. But the real answer to that too, and, and my response has said, when we were entering into this industry, we didn't understand how marketing worked well enough to even have an opinion. And at that point in our careers, I had been managing a purebred Angus ranch for six years. And Shane had been a corporate feeder cattle buyer for seven years. And even with that industry experience, we still didn't understand how intricate cattle marketing and fed cattle trade is. And I think that's true of most people in the cattle industry, unless they've retained ownership on their cattle or have fed cattle before. It's just most, most farmers and ranchers don't participate in that part of the process. And so they don't understand it.

Matt:

You talk about the intricacies of this market and they get to be more with, with every passing year, I think. And it doesn't matter which industry we're in. I think that life just gets a little more complicated. I always try to simplify a decision as best I can and try to boil it down and, and as you said, get, take the emotion out of it. Um, good friend of ours, David Clawson's wife Jeanie is the first one who I ever heard used this quote, but I still use it today. Emotions have an IQ of zero. And so I try to take the emotions out of it. I try to get all the noise. I try to get the symptoms set off to the side and say, what is the actual problem? I think that's why this whole price discovery and marketing issue has become, has been so difficult. I mean, we've been wrestling with this and when I say we, I mean the industry, including our organizations and the ones that you and I are the most familiar with and are members of are Kansas livestock association, national Cattleman's beef association... we were going to these committee meetings when I was president elect in your shoes. And that was in 2015 and they were happening before that. So seven or eight years. Now in 13, 14, early 15 things were good enough that we could hardly even get anybody to really say there was an issue today. I don't know anybody who doesn't agree that there's an issue. Now it is let's, let's figure out what the issue is and not all these symptoms, not all these intricacies. Uh, well, we have to take 'em all into account, but it's more than one thing. This is one of those issues that I don't know if it can be simplified. And I, I think that sometimes as I hear from my neighbors, and as I see some things on social media, we oversimplify this one and say, it's all one segment's fault. And I hope that we can recognize that. I mean, I'm not gonna disagree that it's, as you said, it's doggone difficult to see one segment of our industry, the packer processors making 500 to 800 or whatever the, the level may be, or may have been per head and everybody else being at zero we in the red. But I don't know that that's because they're the problem or we've just got a system in transition that we, as an industry, them included-- quite possibly-- need to figure out a solution for, because as you said, we need them, they need us. And, and I hope that in the future near future, I'm working on it already, but I can have somebody from that segment on here to talk to them. And they recognize, I think if they don't, they're not very long term businessmen, but they recognize that if, if we sell 10% of these cow, We shrink the industry that much, who knows when we quit, we go the way of the sheep industry and things get awfully bleak for them and us. And so that's why I think that it's up to all of us to figure out solutions from within our industry and figure out things that are workable and recognize where the capital comes into the beef industry. If we talk about true investment into the beef industry, it comes from the consumer. I've heard John Stika say it time, and again, at certified Angus beef, "the only source of new value and new revenue and new capital into the beef industry is the consumer." If we keep doing things right, and we win more and more people back to eating beef and large quantities of it, then there's more to spread around. We've just gotta figure out how to get that dollar past the first and second handlers of the money. And I think that's up to us and I think it can be done. We did it with, with value-based marketing 30 years ago. Now, I think in my opinion, we're, we're living with an unintended consequence of moving so many cattle to that way of, of marketing that we probably have to figure out the next great thing. I don't think it's getting away or throwing the grids away, but it may be augmenting them or at least augmenting the way we price those bases. And, and I think that's what we have to realize. This is one of those issues that as much as I would like to, as much as the industry would like to simplify this and just boil it down to one person being the bad guy and one person being the good guy and figure out how to make the good guys win. I don't think it's that easy.

Shawn:

Well, a couple comments, number one, if you're, uh, taking notes from genie Clauson, uh, uh, I wouldn't mind looking at that notepad. but you know, After I testified, Senator Moran made the comment that, that his entire time in DC, which is lengthy, this, this issue comes around all the time. And that's because of that cattle cycle that, you know, times are good so we expand our herds, and then all of a sudden we're overproducing. And so we gotta set, you know, whether it's a drought or low prices, we end up selling part of that herd off. And then, you know, the demand outstrip supply and prices get good again. But that's what the American farmer and rancher is really good at is, is ruining a bull market very quickly. Um, you know, if wheat prices get really high, we all go out and plant wheat, and next year we produce so much that we crash the market, but you know, the other thing, and I'm, I, I hate to even tell you this, but, uh, so you can imagine Matt that at my household, we do not hardly eat any chicken. and I imagine I understand, but I have a wife and three daughters that occasionally wanted a little bit of chicken. And a couple weeks ago, my wife on a Friday night had stopped at the grocery store and brought home some chicken legs and thigh quarters. And that's what she wanted me to grill for Friday night meal. And as I was opening up the packaging, I was throwing it away and I happened to just outta the corner of my eye, catch the price. And I literally pulled that, that packaging back out of the trash to see what the price per pound on that was. And you mentioned, you know, fighting for that dollar, that consumer's dollar and with beef, the way we fight for that is purely through quality and dining experience and being that center of the plate protein, because our competition... just chicken's cheap. And so that's how we have to beat them is purely through our quality and our consistency. But if we're going back to pricing mechanisms that hindered that quality and that consistency that's, that's an even scarier part of this conversation to me, especially as our economy looks like it could get tough for a while. And those consumers really think about the decisions they're making with each dollar they spend.

Matt:

Dr. Larry Cora, former K-Stater, um, former CAB employee. Yep. Um, he used to say that the minute we decide to try to compete head to head on protein yield and efficiencies of production with pork and poultry, we're done in the beef industry. If we can't raise our game and provide a higher quality, much higher quality, better tasting, eating experience than we need to hang it up because they're mono gastric we're ruminant, and we will never compete head to head in terms of feed efficiency. Um, now can we convert forage into protein that they can't do? Yes. But if we continue on the path that we've been on for however many decades and deliver a higher quality, higher marbling, corn fatten kind of, of product, then we'd better make it taste. Dogone good. And we better figure out how to capture enough value all the way through the segment that rewards us for offering that higher priced, protein, because they'll buy it. I, I grew up until, until the late nineties. I really wasn't sure if they would, because every single time through the cattle cycle, that beef prices got a little high consumers traded down to pork and poultry every single time until about 15 years ago, when we underwent what a lot called the quality revolution in the beef industry. And thanks to value-based marketing, thanks to some branded beef programs, thanks to a lot of dollars spent from our checkoff, making sure we found ways to offer better cuts, more consistent beef, et cetera, et cetera, through a team effort was the first time that it was proven to me that we really can pro charge what I would call exorbitant prices. I mean, there's a reason that Nikki, Tiffany probably bought chicken at the grocery store. because you may not have had any beef in the freezer. And she refu. If she's like me or my wife, she refused to pay pay what beef was.

Shawn:

There was beef in the freezer, but

Matt:

okay, well, she, she just wanted to mix it up a little bit, but honestly, as we spend some time in front of that meat case, we have two, we have two options. We can either be wildly proud of ourselves that we are producing a product that people think is worth what it is they're spending on it. Or we can be scared to death that we're really not offering that much value, and at some point in time, they're gonna say, forget you I'm buying the 99 cent chicken leg quarters or whatever they have been priced at.

Shawn:

Well, coach Snyder, I think is noted as saying some people eat to live and some live to eat. Right. And. if you're eating to live, then it's all about how many calories can I buy with my dollar? Yeah. But if you're living to eat, then it's, how much can I enjoy each dollar? And, and that's where we, as cattle producers have to, to thrive. And, and you said you were shocked at what prices people are willing to pay. I think that's true globally, matt. I have literally been walking through the Tel Aviv airport in Israel and because I was wearing a Tiffany cow company hat and stopped by a guy and he said, are you an American beat producer? And I said, yeah, I am. And he said, I run the premier restaurant in Jerusalem. And he said, I can't get American beef in here. And he said, I want it. And so that's the kind of demand that exists globally for our products. And that's, that is just radically rewarding to hear that, but it's also frustrating to hear that there's a restaurant tour in another country that can't put my product in front of its consumers as well.

Matt:

Yep. Yep. And I think that those are the, those are the discussions, the industry discussions that I want to have on here, at the sale barn cafe, wherever let's figure out, how do we do an even better job of producing high quality beef, and as much of it as the consumer will pay high prices for, and then how do we capture those consumer dollars and get them all through our beef industry chain so that we can respond to it?

Shawn:

That's the key, that's the key is getting those dollars distributed back through the supply chain. And another thing that I'd like to point out on that is, you know, well, I'll ask you a question, Matt, based off of cattle facts, numbers, and profitability in each sector, the beef supply. Do you wish that back in 1996, when you graduated K state that you would've invested in a packing plant and done that for the next 20 years, as opposed to being in the cow calf sector? Well, maybe not in 96, but I should have about four years ago. No, that's my point though. Exactly. For those 20 years that preceded the last six, they were bleeding. Yeah. They were not making money, which is why they closed some plants and made some decisions to, to stay in business. And that's what a good businessman does. And that's what their segment of the industry did. And I don't think those guys are sitting in their boardroom saying, wow, we, we should have done things differently because now they are profitable. Uh, some would argue maybe too profitable, but once again, that's capitalism, if the shoe was on the other foot and it was those of us feeding and we're rearing these calves, you know, producing them, if we were the ones making the high prices, would, what would our argument be then? And that's a tough that's a tough question to ask yourself.

Matt:

Yep. It is. It is. And, and, um, everybody has their own ways of, of, um, reinvesting. And I guess my hope is that that segment of our industry is going to reinvest in, in, in technology and in. Uh, efficiencies of production and in ways to get that beef through in the most efficient manner possible to get to that guy, that restaurant tour in Jerusalem, to get to whatever shells they are so we can offer that beef to the consumer, as you said, they don't buy cattle, they buy beef. And so, um, I, I, I think that, um, I knew that we weren't gonna solve anything. I'm hoping to have two or three more of these episodes in the next month or two with different, different folks that may have a different perspective than you may have a different perspective than me. Uh, but hopefully with enough conversation, we may not find the answer here on practically ranching, but I hope that it inspires people through capitalism, through their own investment, through their own partnerships, through their own creative energies, to come to the table with solutions. I was talking to a guy about being on a similar podcast and, uh, I don't think we're gonna be able to get it done, but one of the things he said that stuck with me, he said, if any employee comes to me, if any family member comes to me with a concern, my door is always open and I am all ears, but I have a rule. If you're gonna gripe about anything that's going on in your life that involves me or my company, you better have a potential solution. And I think that's what I want to achieve here after this discussion and the ones that are going to ensue. I don't mind griping. I, I have some gripes too. That's the way we raise just enough emotion and just enough passion to get people engaged and thinking, but let's follow that concern, let's follow that emotion, with a, at least an idea, at least a possibility, at least a, a piece of that puzzle that hopefully we can put together and figure out how to make this beef industry better for everybody involved.

Shawn:

Well, and I think you're on the right track from getting people from different sides of the conversation involved, because like you said, did you and I solve anything today? But if we can get some different perspectives and some different conversations, that's probably one of the most rewarding things. Uh, that's happened since I had the opportunity. And the privilege to testify in DC was I've had a lot of people call and say, really I'm surprised you're opposed to this, but as we talked about it and, and had a conversation much like you and I have had today, uh, many of those people were like, oh wow, there's more to this than I realized. And this is not just some easy solution. This is complicated and we better get it right, because it could do a lot of damage if we don't.

Matt:

Yeah. I, I would say we're dealing with an unintended consequence or two of having a thinner cash market to base all these formulas off of that would pale in comparison, in my opinion, to the unintended consequences that we could cause when we ask uncle Sam to come in and tell us how we ought to be marketing cattle. And so hopefully hopefully we as an industry can continue this conversation, continue these strides and, and figure out, uh, figure out that better mouse trap. Well, Sean, thank you very much. I appreciate your time. I appreciate all your thoughts and your dedication to the, to the industry, not just through. KLA, but with customers at Tiffany cattle company and elevate ag and, and everything else, we didn't even get to talk about two or three of your, uh, your ventures. So I guess, uh, there may have to be a part two down the road, but, uh, really appreciate your time and, and all that you do for us.

Shawn:

Well, it's my pleasure, Matt. It's always, uh, iron sharpens iron situation when I get to visit with you and, and folks in our industry, you named some of them. And so I I'm honored that you felt it would be worthwhile to have me on today.

Matt:

Great. Well, thanks for being here and, uh, will be visiting again soon.

Shawn:

Sounds good, matt. Thanks.

Matt:

Thanks for joining us for practically ranching, brought to you by Dalebanks Angus. We hope we made you think. Or chuckle or even yell a little, if you enjoyed the podcast. Heck even if you didn't, help us improve by leaving a comment with your review wherever you heard us. And if you want to listen again, click subscribe and catch us next week. God bless, and we look forward to visiting again soon.