Should I Sell All of My Cattle?

It is interesting how people find my blog. Various search engines bring in a lot of traffic. Someone was searching the internets for an answer to the title question. That has inspired me to write a little bit.

Should I sell all of my cattle in 2014?

There are a lot of variables in that. It’s like asking if you should go ahead and buy that Plymouth DeSoto.

I’m not interested in owning a Plymouth DeSoto at any price. But they do have value…which means they are valued. Should you buy one? I dunno. Do you want one? Do you have the money? Where are you going to park it? What will your spouse say? What is the plan?

But there is so much more to it than that. In essence the reader is asking, “Is it better to have cash or cows right now?”

I’m going to switch gears and talk about eggs and dollars briefly. Dollars are a product. Eggs are a product. But dollars are infinitely liquid, eggs are less so. For example, anybody can give me $4 and I’ll give them a dozen eggs. But not everybody will accept a dozen eggs in exchange for $4.

Dollars are infinitely liquid, cows are less so. It is unlikely that I could trade my cows for a Plymouth DeSoto. But you can’t eat dollars. So the question becomes, after you sell your cows, what will you do with the dollars? Do you just want to stack them up in your house? Maybe build a couch out of $100 bills? That wouldn’t be very comfy. And I doubt there are any real women in red dresses that would lounge seductively on a stack of paper.

100Couch

Click image for source. No, really. It’s worth your time.

So what do you do with the money? I mean, before you do something you should decide what it is you are actually going to do. You probably don’t want the dollars. You want the convenience of the dollars…their near-universal acceptance. You might hold dollars for a period of time but you aren’t going to make a couch with dollar bills. You are eventually going to buy something with them…and probably not a brunette in a red dress. Cows? Grass? Pasture? Dollars? Plymouth DeSoto? The idea is to put your resources to their best and highest use. If not cows, then what? Could make for a fun night at the casino but is that what you want? Because if you swap out the cows for cash and don’t have a plan…well, you may as well have a good time. What is the marginal utility of a hangover?

Rather than focus on getting out of the cattle business you need a plan for getting into the next thing. Trading cows for cash may accelerate your efforts…if you are going somewhere. If he/she has some culls to spare, this is a chance to get a great price on sub-par genetics! Maybe A. Person meant to type, “Should I sell all of my cattle and buy cattle of a higher quality.” OK. I have heard of a number of ranchers who have sold out of the cow/calf business because they believed calf prices were abnormally low (so calves produced were not covering costs). They sold family herds that had taken generations to build to buy heavily into cheap stockers. Then when the market skewed the other direction they quit raising stockers and bought a nicer herd of cows than they had owned previously…making money on every trade…always looking for the class of cattle that were relatively undervalued. Not just selling the cattle, trading one appreciating asset for another with dollars in the middle.

But let’s assume A. Person doesn’t want to sell out completely. As I mentioned earlier, high cattle prices are the time to cull out the worst of your herd. When prices go down again (and they will…and maybe by a lot…and maybe for a long time since this cycle has been up for a long time), buy in quality again. If that’s the plan, sell some cows now.

Or maybe none of his cows bred this year. Sell them.

Or maybe he has noticed his cows can’t perform in the absence of corn, Ivermectin and alfalfa cubes. Sell them.

Or maybe he is just looking for a new opportunity. Sell them.

In fact, if you are asking the question at all…the answer is yes. Do it. You obviously want to sell them. Go. Carpe some diem. Don’t look back. Embrace a brighter tomorrow for you. Just get the cows out of your way. There is no obligation with cows. It’s not a marriage. They aren’t children. There is no business contract. Do what you need to do to move onward and upward. Devise your plan, make it happen and cherish the consequences!

Maybe that’s just me though. That’s kinda how I tend to run. Always looking for deep water to jump into and dealing with the results.

Should I sell my own cattle? Nope. They are part of the plan. Should I train up my son to take over control of the cow herd when he turns 15? Sounds great to me. I’ll move onward and upward to the next thing. He will be the “Head Farm Steward” and I will move into an advisory role. Awesome. I have a plan for that…should it come to fruition.

Should you sell your cattle? The better question to ask is, “What am I going to do next?” because my response is, “What’s the plan?”

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