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What do you want your seedstock producer to do to help you?

Things that come up in the daily operation of a ranch.
BRG
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What do you want your seedstock producer to do to help you?

Postby BRG » Wed Jun 01, 2005 7:03 pm

We have been bidding on everyone of our customers feeder cattle when they sell them through the barn or off the ranch. We do this for 2 reasons. The most important one is to help them get what they are worth that day and the second is to get data back so we know what we need to do to improve our cattle. Anyway, I was just wandering if their is any other kind of customer service that the commercial rancher would like or need.

Thanks for the help.

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Aaron
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Postby Aaron » Wed Jun 01, 2005 10:28 pm

As a fellow seedstock producer, one thing I have found that the commercial guys seem to like is a payment option. Let them have the choice of paying everything out for their purchases versus over a period of time with the importance being on NO INTEREST. Here in Canada, I think payment plans are what could save some of the seedstock guys at this point in the game. Most guys still want their cash totally up-front, or 50/50 over a couple months. I say, if you want me to buy a $3000 bull, at the most, I pay you 50% now and 50% when the first calves come. I would more likely prefer it if I could pay for the bull over 4 installments or such.

Even in these poor times up North, I could probably offer $1200 bred pairs and offer a 4 installment payment plan over 1 year with many takers. The key to the purebred business is to pay attention to all the little things.

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Postby Northern Rancher » Thu Jun 02, 2005 11:15 pm

I just sold some commercial pairs for 1200 in the yard-they go out on Saturday-they went to neighbor of one of my customers. Both guys let me sort them and were happy with the cattle so that was o'k. I find with selling commercial females if you represent the cattle honestly and make things right if there is a problem things go pretty good.

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Postby DOC HARRIS » Sat Jun 04, 2005 12:23 pm

Aaron wrote:As a fellow seedstock producer, one thing I have found that the commercial guys seem to like is a payment option. Let them have the choice of paying everything out for their purchases versus over a period of time with the importance being on NO INTEREST. Here in Canada, I think payment plans are what could save some of the seedstock guys at this point in the game. Most guys still want their cash totally up-front, or 50/50 over a couple months. I say, if you want me to buy a $3000 bull, at the most, I pay you 50% now and 50% when the first calves come. I would more likely prefer it if I could pay for the bull over 4 installments or such.

Even in these poor times up North, I could probably offer $1200 bred pairs and offer a 4 installment payment plan over 1 year with many takers. The key to the purebred business is to pay attention to all the little things.
Good afternoon, Aaron -
It seems that these days everything is geared to s-t-r-e-t-c-h-i-n-g payments and expenses over as long a period of time as is practical. I have done that very thing a few times! :shock: I also fully understand the seller of a product desiring their cash totally up-front! :nod:
However - let's view this situation from another point of view: in the scenario above, you said, "- - -if you want me to buy a $3000 bull, at the most, I pay you 50% now and 50% when the first calves come". As a rough estimate, this could be a year or more after the original purchase, in which case I, as the seller, have lost a year's Interest on that $3000, or at 6% - - $180.00. ( $90.00 if you paid 50% up-front). In effect, you are putting me in a position of coming to you - hat in hand - and pleading with you to buy my bull for less money than I could get from someone else who would pay the full amount - CASH. :roll: Hello :? You would have to be a pretty good friend of mine for me to do that. If I am going to "pay attention to all the little things" I am going to have to get more than the original $3000 for that bull to justify my acceding to your desires for payments over time. Just a thought. :wink:

Nevertheless, I AM in the business of selling seedstock, and would like to CONTINUE to sell you seedstock in the future - so - - :( do I bite the bullet - -or- - bow my neck? It really is the little things, isn't it?

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Postby Aaron » Sat Jun 04, 2005 4:38 pm

Doc, I see your point. I could see that a seller would probably expect money up front when selling at an auction/show&sale...but with a private treaty sale, I would expect that most guys should be willing to offer a payment plan that is workable for both them and the buyer. I tend to think it is better to sell 50 bulls with a variety of payment options than 35 at $3000. I guess it all depends on how much the seller needs the money. I would rather have buyers that purchase animals from me when they want too and not because they have too.

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Postby Soapweed » Sat Jun 04, 2005 7:04 pm

In late December of last year, my bull supplier sold me 35 bulls for $1200 each, to be delivered May 1st. I wrote him out a check for $200 per bull at the time of purchase, and considered it "feed" for tax purposes. Just after January 1st, I wrote out another check for $400 per bull, and the two payments totaled half the value of the bulls. At the time of delivery, I paid the second half. This system works good for both of us.

If I was a seedstock supplier, I would want and expect full payment at the time the livestock actually left my ranch. A down payment could hold the cattle until they were delivered. As far as I'm concerned, banks are in business to loan money. I'm not. Several years ago, I sold cows on a five year plan, 20% down, and 20% each year plus interest. The nice guy reputable rancher that bought them has since had financial woes, and it is taking me much longer than the original deal to get the money. I'm not "out of the woods" yet, but think it will work out. It has been an eye-opening learning experience, and one I'd not care to repeat.

If I ran a Main Street business, I would sell merchandise as cheap as possible but operate more or less on a cash and carry basis. This easy money, easy credit stuff just gets a lot of well-meaning people in trouble.

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Postby Soapweed » Sat Jun 04, 2005 7:24 pm

Further thoughts. If a rancher is a good risk to sell cattle to "on time", he should also be a good enough risk that a bank would loan him the money to pay cash. Banks have more enforceable means of collecting on bad loans that do seedstock producers. As far as seedstock producers having a multitude of different loans outstanding on many different cattle sales, it looks to me to just be a bookkeeping headache.

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Postby Aaron » Sat Jun 04, 2005 8:49 pm

Very true on everything you say Soapweed. I guess my thinking offers more of a option to many Canadian purebred guys who are whining that the commercial guys don't have $3000 on the spot to buy a bull in the spring.

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Postby Faster horses » Sat Jun 04, 2005 8:49 pm

I'm in Soapweed's camp on this one, totally.

I never heard of selling bulls over an extended period of time, other than how Soap explained it. There is just too much chance of something going wrong; due to no one's fault or maybe due to someone's fault. Sometimes it is hard to collect on a dead animal. It looks to me like extending money on a bull could acclerate the problem of being able to pay for the bulls in the future. (Spent the money on something else, etc.) Just a thought. And I fully agree that the banks are in the business of loaning money.

As for selling cows on a long-term contract, that makes me nervous as well. Our neighbor sold his nephew cows on a 4-year contract and already there is some rumblings. I hope it all turns out okay.

Our banker has always given us good advice, though he is not around any more~(he passed away suddenely at 54 years of age; we lost a very good friend and advisor). He always said, "Keep it clean. Keep it simple as possible. Don't borrow money you don't need." Buying a bull on time, is really borrowing money from the seller~sometimes things are made so easy, it's too easy to spend the money elsewhere. FWIW~

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Postby Northern Rancher » Sat Jun 04, 2005 11:05 pm

When I started out I used to get three year term loans from the bank to buy bulls with-seemed to work out all right. There's enough worries in the cattle business right now without having to bankroll some people-I have carried some big amounts for my heifer customers for a month or so.

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Postby Denny » Sun Jun 05, 2005 7:59 am

HONEST CATTLE thats what they can do for me if they hide the feed tanks over the hill then say they dont grain the cows or hide the creep feeders.To me thats not honest.

If your cattle are the right kind they will sell themselves but you need to offer the type of bulls that will garner top money with no strings always remember your a rancher not a banker.Usally the payment plans are hard to collect on and will wreck friendships faster than anything.

Also how sharp are their knives do they cut any calves there are some out there that think every bull calf is a herd bull just because he looks good on paper doesnt make em good..

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Postby Mike » Sun Jun 05, 2005 8:41 am

Denny wrote:HONEST CATTLE thats what they can do for me if they hide the feed tanks over the hill then say they dont grain the cows or hide the creep feeders.To me thats not honest.

If your cattle are the right kind they will sell themselves but you need to offer the type of bulls that will garner top money with no strings always remember your a rancher not a banker.Usally the payment plans are hard to collect on and will wreck friendships faster than anything.

Also how sharp are their knives do they cut any calves there are some out there that think every bull calf is a herd bull just because he looks good on paper doesnt make em good..


Denny, I agree with you for the most part. There is a trade-off between developing good pasture-hard bulls and developing them to their top genetic potential. There is usually some point in the development stage that the seedstock producer has to put 'em on some feed, might be due to seasonal changes, drought periods, etc. Feeding is not always dishonest.

What I wish the commercial bull buyer would do is get more interested in watching the bulls as they develop. How can anyone POSSIBLY pick a bull as a 2-year old and tell what the calves will look like? Most of the bull buyers down here market calves as weaned or pre-conditioned. Yet they only see the bulls they buy as 2-year olds.

I have kept a couple of calves that I probably should'nt have at weaning, put them on feed in the fall when there is no grazing yet and they turned out to be the best looking of the bunch. When the buyer mentioned that the calves weren't what he expected, I reminded him that when he bought them I explained to him that those bulls would have made him more money if he had fed the calves vs. selling as weanlings.

Point is; many bull buyers go to a sale an hour beforehand, pick out the biggest, thickest ones in the sale, pay too much, and then complain.
No one bull can be "all things to all people", but if he is the best looking at 2 years, they think he is.

My most satisfied customers have been the one's that give me a call and ask me to deliver them a bull without ever seeing him. It takes some homework on my part, but no one knows a bull better than the man that raised him. Being honest doesn't hurt either.
I'd rather have a bottle in front of me than a frontal lobotomy.


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