Speer: Cutting Edge of Change
Readers: I’m always appreciative of readers making time / effort to reach out. Some columns elicit more feedback than others; the Blogger/ Texas Cattle Feeder column was one of those. More important, the feedback provided a good opportunity to review the importance of how we think about business.
Quick Review: First, though, some background. The column was intended to counter some of the noise and misinformation coming through the internet. It specifically highlighted the Texas / Iowa price differential. Through July, Texas negotiated cattle are running $57/head behind Iowa (basis 1400-lb steer). That’s a $25/head discount versus the carcass value difference between the regions ($32/head). However, Texas cattle feeders largely close that gap via formula premiums. In the end, the settlement sheets closely match value differences in the sales cooler.
One industry professional responded this way: “The efficiency of the marketplace never fails to amaze me.”
Email #1 vs. Email #2: That brings us to some of the other responses. I received two emails, back-to-back, they were in sharp contrast to one another (and especially insightful):
- Market priority: the first focused externally on the market; critical of how feedyards and packers do business in Texas.
- Business priority: the second, right on the heels of the first, remarked too many people waste time worrying about markets and packers – and consequently lose sight of emphasizing profitability of their own operations.
Mindset: That one-two punch prompted me to reflect on several columns highlighting the importance of our thinking. Respective excerpts from those discussions are detailed below:
- Business First, Market Second: …“what’s the market?” reflects a commodity, one-size-fits-all, doing-what-we’ve-always-done approach. Conversely, leading with “what’s the business doing?” suggests intentionality and transformation and innovation. For any industry, and its participants, to remain competitive and create opportunity, it’s the latter question that matters.
- The Cattle Producer in 2043: The highlighted phrases (e.g. growth mindset, unique solutions, innovative, open to change and confident) are key differentiators. They’re indicative of how successful producers think about – and subsequently act upon – future goals and plans. In aggregate, they reveal discipline towards shutting out noise and focusing on the business…success will come to those less focused on uncontrollable variables outside – and increasingly driven by what’s occurring inside - the boat.
- Markets, Money and Emotion: [Working with producers following BSE in Canada], Dr. [Harlan] Hughes drew attention to [producers desiring to have everything back to “the way it was before”]; their perspective was inherently self-defeating. The right approach is to remain disciplined and versatile – embracing the mindset of change being the only constant. Accordingly, Dr. Hughes’ first group [producers who set their sights on factors within their control] was inherently more empowered and felt more hopeful about the future.
- Where’s Your Thermostat?: Successful people never waste time or energy on “they”. Any such claim is disempowering; it’s the equivalent of putting your thermostat in someone else’s house.
Cutting Edge of Change: Agriculture is changing rapidly; that inherently creates tension. However, producers who operate believing “success is within my control” are the ones most likely to succeed amidst the turbulence (see Aimpoint Farmer of the Future).
Nathan Furr emphasizes that same principle and the importance of embracing change in his book, The Upside of Uncertainty. It enables advancement no matter the external business environment: “…some people have become so skilled at this that they have learned to see uncertainty as a good thing, even choosing to create more of it on purpose because they realize it helps them access new possibilities.”
As mentioned, readers provide great insight. Several days after emails #1 and #2, I subsequently received some communication from another industry veteran who shared this observation: “You always want to be on the cutting edge of change because that is where the best producers in the industry live every day.”
Nevil Speer is an independent consultant based in Bowling Green, KY. The views and opinions expressed herein do not reflect, nor are associated with in any manner, any client or business relationship. He can be reached at nevil.speer@turkeytrack.biz.
