HP Ranch Praticum

Welcome to the NewAg.Net Web Site.
Many of you are taking the HP-RP class to look for a way to better your lives through your operation. This site is dedicated in part to follow up on our teachings and ad some provocative information so that you will continue to "Free Your Mind" and look outside the box.
Our ag business has matured to a point where most everything we have learned in the past about ag will become outdated. It took a long time for the ag industry to get to this point. The ag industry is one of the oldest industries in the US but we have been the slowest to mature. This measns that we have a lot of catching up to do.
Most of the comments and articles here are from personal and or other experiences I have seen and been associated with. I have a head full plus I am witness to more and more everyday.
So RSS this site or check back on a regular basis. Your comments and/or personal expericense are very wellcome.

Take Care
The NewAg is Here.

Assume = ASS+U+ME

Need I say more.
Bad habit.
Human nature finds that it is much easier to assume something then it is to actually have a conversation and find out what the person is meaning & thinking.
Kick the Assume habit.

Take Care
The New Ag is Here

Open & Objective

Your Mind.
We all have something to offer. There is something good and right in everyone and everything.

• The ideas we have may not be perfect but there is always something perfect in every idea. Finding that perfect something is the challenge.

Making that commitment everyday to find something good in the ideas of those around you is a great place to start. As you sharpen your skills to find the good in everyone's ideas you will be able to find the good in yourself. By doing this you will be able to build your self confidence and become more secure in your abilities to do what ever you want. By building your own self confidence you will be able to help build the self confidence of others around you. It will become an epidemic.

Take Care
The NewAg is Here

Catch 21 The Next Generation

Scenario-
• The ranch has been in the family for the last 20-50 years.
• The person/s that are owners of the operation are reaching what most people would think as retirement age. 65-70
• The ranch has struggled through most of the 70s 80s 90s & 2000s.
• It has been on the edge of “losing the ranch” for most of its life.
• It has a land & operating debt that for some reason it just can’t shake.
• It has kids who have been working on the ranch for 10 plus years and would like to take over the operation as owners.
• The kids have ideas for the ranch that are new and somewhat radical to the ranchers who have struggled just to make it to this point.
• The owners see these ideas as overwhelming and are very skeptical about if it will work or not.
• Communication is not at its best
• Assumptions and expectations of feelings and thoughts of each other take the place of communication.
• Words are shared tensions are high accusations are made.

Sound Familiar?

You are trapped in a Catch 21 where the answer is yet to be found. How many ranches are there that are in this same scenario? 10%-20% would be a good guess.

The problem is that the current owners and the up and coming kids both want the same thing

Peace Of Mind & Security.

But only one can have what they both need.
The owners want security in their retirement years. They want to know that they will have equity to fall back on. Their 401K plan if you will.
The kids want security in their prime money making years.
The kids see what the current owners have gone and/or are going through and say to themselves “We can stop this from happening to us. We can be prepared for our retirement as well as our kids taking over the business.”

What’s the first step in solving this problem?

1. Catching it before it happens. If you can see this coming then it would be great to deal with it then and prepare yourselves for decisions that need to be made.
2. Acknowledgment of the problem.
3. Accepting that it is not the faults of either party. This can be tough especially if the tensions have been high and words have been said that have hurt of devastated the relationships.
4. Heal the wounds.
5. Come to a general agreement.

This all sounds real simple, but there are always a number of variables that make it much more complicated. Each situation has to be handled on a case by case basis.

My advice to anyone in this situation is:
Keep the communications open. Assumptions and Expectations of each other’s feelings & thought is very dangerous to the relationships and should be avoided at all costs.

Take Care
The "NewAg" Is Here

What happened to the U.S.cattle cycle?

Chart Look Familiar?
Peaked in 1935 – 45 – 55 – 65 – 75 – 83 – 95 – 06
Question: What happened in each of the peaks and valleys?
Answer: Investors, ranchers, speculators drove the price up and down looking for that happy medium between demand and production. Demand and production caused major swings in inventory/price which attracted investors and speculators which in turn caused more peaks and valleys.
Look at every other evolving industry and I believe you will find the same thing, Peaks & Valleys.
The only difference is that the livestock industry is very unique in that the turnaround time for inventory reduction to expansion back to reduction is 10 years. Most other evolving industries can usually do a turnaround in 365 days or less.
Overview of the Cycle:
From the 1930s to the 1970s there were wild swings in each of the cycles.
From 1975 to 1995 those swings were just about as wild but they lasted 2-3 years longer.
From 1995 to 2008 the wild swings are no longer there and we have begun to flatten out the inventory. Demand has been on the rise and is now flattening out. Demand and Production are coming together. Once these 2 components come together there is less market volatility which in turn causes the speculators and investors to exit the business.


Where are we now?
The livestock industry is coming of age. It is finding its happy medium where demand & production are coming together. The industry economics is no longer driven by speculators and investors but rather by the production and demand components coming together.
This was inevitable. This would have happened sooner or later. It just so happened that it occurred now probably due to several circumstances like Ethanol, Global economics and US Dollar. Otherwise we may have gone through one more cycle before everything leveled out.
We are still going to have market volatility through the course of each fiscal year, yet our economics are going to be more in line with tradition maturing industries. The livestock industry is going to become more subject to global economics, US dollar, inflation, demand, imports, and exports.
Speculators and Investors will cause the markets to fluctuate through the fiscal year, but we will not have anymore 10 year cattle cycles.


What do we do now?
Management practices, on the ranch, are going to have to play catch up to our new market drivers. Traditional ways of how we look at our business are no longer useful and we must accept this as fact.
Acceptance is the hardest part.
Change is good, but now change is inevitable.
Those who have experience in the traditional business sector are going to be ahead of the game.
Those that are willing to look way outside their box will do well.
The things that have been taught in the traditional business schools can now be applied to the livestock industry.

The "NewAg" is here.

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