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THERE IS NO INTRINSIC VALUE IN SEED STOCK

Jay Nixon

Over the past 35 years or so, I have marketed for myself and for clients, just about every kind of cattle in most cattle breeds in this country, commercial cattle, commercial seed stock, registered seed stock to commercial producers and high-dollar, silk stocking seed stock to the players in breeds new and old.

I've seen breeds billed as the solution to the cattlemen's prayer come and go, and I've seen cattle with no visible value to anyone sell at prices I couldn't believe. I've seen breeders new and old become so enamored of a particular animal that did well at shows that they'd pay six figure money just to be one of the seven or eight people in a syndicate to own a piece of it.

I've seen really good cattle, fine cattle that could really make people money, sell for little or nothing, and I've seen grand champions at some of the country's most prestigious shows mature into animals so sorry they were never allowed to breed a cow.

I've seen people by the hundreds embark seed stock operations and never sell an animal at more than market price, even though they bought for big dollars what were billed as the best cattle in a particular breed as the basis of their herds. In four or five years, most of them sold out, disillusioned and bitter at an industry they believe bilked them of their hard-earned capital.

We, in this business, are only too glad to sell these folks the fine animals we have at prices that are often staggering, yet fail to offer them the help and the knowledge it takes to make those cattle into investments that will bring them a return. Ours, is and perhaps always will be, a case of caveat emptor, let the buyer beware.

I've seen it and you have, too. A prospective buyer -- either a neophyte in the business or even a good solid commercial producer meaning to upgrade into the seed stock business -- comes to the ranch, looking to buy cattle he is convinced are the best in a breed that is the top breed available in the business. These people honestly believe that all they have to do in order to make their fledgling seed stock operation pay, is to have the best cattle available.

They buy the hottest bloodline, sons of the old bull, the one that won at Denver or Jackson or Houston. They buy females out of the top donor cows on the place, cows that everyone says are the breed's top producing females. They take them back to their spit-shined farms and ranches, the ones with the white fences and the landing strips and the red barns and the manor houses. They turn them out and they get the calves and breed others either AI or through carefully selected embryos. Their herds grow, under the hand of some of the top herdsmen they've been able to find. They drive out in the evenings and look at what they and God have wrought and are proud.

Then they wait for customers, and wait and wait and wait. Maybe they even send an animal to a fitter and show it, and they may buy an ad in the breed journal offering sons of the old bull, one of which was third in his class at Tremonium. But nobody answers their ads and nobody comes to look.

One day they wake up and decide they've been pumping money into this operation to the point that it takes another entire business to pay the bills, and have yet to see a return. Of course, they are too proud to ask why. That would indicate they don't know what the hell they've been doing. All they want is for the place to break even, but it just won't. It has become the most expensive hobby they ever had and they grow bitter.

Soon they are gone, and the big producers are out there selling another one who will go the same way, and another and another. This is the nature of the business. The new ones come and they go, and we, who are in it for the long haul, are always looking around for new customers because the old customers are no longer around.

Some of these people -- not all, but some -- can be helped. There are always those who buy a cow and immediately know all there is to know about the business. A wise old cattleman once told me that there is no one smarter about the business than a doctor who has owned a few cows for a year. Those folks we can't help, because they will not admit they don't know it all. They will do it their way until the grass retakes their runways, the barns and fences collapse, and their names on the mailbox by the fancy gate fade to illegibility.

But there are those who can be helped, those who will listen to good advice if it is offered, those who want to understand the business and what makes it go. These we should salvage. These we should encourage and help and teach and explain how to make their operations succeed.

We should tell these people that just because they own sons of the old bull, doesn't mean they are worth more than market price unless they are marketed and marketed creatively and aggressively. We should warn them that there is no intrinsic value in seed stock, nothing that will automatically increase their value above straight over-the-scale prices but the ability of the owner to market them. As the owner/operator they must sell themselves, their own breeding programs and, finally, their own cattle.

They should be taught that they must start with good cattle and then, market those good cattle, add value to those good cattle, build respect for those good cattle through their own efforts. And we should give them sound advice and counsel as to how to do that.

In doing so, we would not be building competitors. We would be adding to our on-going market base through repeat customers. It is in our own best interest to do this.

This isn't a new idea. It is has been done in the past by some of the acknowledged master breeders in several breeds of cattle, notably, Brinks Brangus, Litton Charolais, Harrell Cattle Company Beefmasters, and others, some of whom even held seminars for their good customers, shared marketing networks with them and were always available to give sound advice on particular problems.

These breeders maintained their customer bases by keeping their good customers active and profitable, and the heart of their successes were these repeat customers. In today's market, Leachman Cattle Company is about the only one doing this to any extent.

I recommend the practice to all my purebred seedstock clients because it is sound and because it will help to make the seedstock business of the future more legitimate as an investment.

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