If you haven't read the "debriefing" posts over at www.Barnhardt.biz from guys who attended the NCBA convention in San Antonio, click over and read those as backgrounder before proceeding with this post. 

The comments from the President of the NCBA (don't know his name - sorry) to the "young man" about consumer demand being the end-all, be-all of profitablility got me thinking.  I wonder if the President would like to either retract or defend that comment given the following LOGICAL argument:

Two feedyard managers go to the sale at North Platte yesterday.  Feed yard manager number 1 is not very bright but holds numerous college degrees so everyone thinks he is very smart.  His feedlot is deeply in the red, and it is only getting worse.  He has to borrow money every month just to keep afloat.  He thinks he is the smartest man in the cattle industry and blames his difficulties on the packers and the "messed-up markets".  He is a socialist (he learned that in college) and is therefore a member of R-CALF and the National Farmers Union.  Let's call him . . . Barack Obama.

Feedyard manager number 2 has a high school diploma and has been working since he was 8 years old, beginning at his father's side.  He started with 2 cows and has built his business into a very successful 5000 head feedlot.  He owns the feedlot and the cattle in it outright with no debt.  He is humble and quiet, belongs to no organizations and drives an 18 year old truck.  He, his wife and their 6 children (with another on the way - praise God) live in a modest home.  They paid the mortgage off three years ago.  Everyone in town thinks that he is a "dumb redneck".  Let's call him . . .  John Smith.

Barack Obama sold fat heifers out of his yard last week at $85.00  John Smith likewise sold fat heifers last week, but his only brought $84.00.  Barack Obama's cost of gain on his heifers was $0.80.  John Smith's cost of gain was $0.85.

Barack Obama, after consulting with several consultants and commodity brokers (one of which actually trades in the pit in Chicago) about their forecasts, retail demand and the upcoming export picture did the following:

SELL 1250# fat heifers out of the Obama yard @ $85.00
BUY 615# top-quality heifers at North Platte $100.50
Return on the Gain = $0.70 per pound
LOSS per head with an $0.80 cost of gain = ($63.50)

Sitting a few feet away was John Smith.  This is what he did, after consulting no one except himself and simply scratching out a few simple figures on the back of an envelope that was laying on the floor of his 18 year old truck: 

SELL 1250# fat heifers out of the Smith yard @ $84.00
BUY 961# top-quality heifers at North Platte @ $76.50
Return on the gain = $1.09 per pound
PROFIT per head with an $0.85 cost of gain = $69.36

So, Barack Obama locked-in a $63 per head LOSS, which he will have to borrow more money to cover, and John Smith bought a $69 per head profit, a portion of which he will use to buy more ammunition, fuel, a generator and some more silver coins later this week.  That is a P&L swing between the two men of $132 per head.

Here is the question for the NCBA president:  If consumer demand is the factor that drives profitability, how do you explain the $132 per head P&L differential between Barack Obama and John Smith yesterday?  Doesn't consumer demand affect these two men equally?  If not, please explain what the difference in consumer demand between the two men is.  Also explain what needs to happen with respect to consumer demand for Barack Obama to become profitable.  Please be specific and show your work.  Your answer should include specific mathematical calculations that add up to $132 per head, thus explaining the differential.

We all know that the president of the NCBA is NOT going to be able to answer my questions.  Why?  Because the notion that any cattleman's profitability is tied to consumer demand is a FALSE PREMISE.  False premises do not hold up under any rigorous, logical thought.  In fact, most don't even hold up under simple common sense.  Here comes the big call-out.  The NCBA president told my friend, the "young man", that comsumer demand is paramount because the NCBA president is completely, totally incompetent when it comes to marketing and generating profit.  He doesn't know how to generate profit himself (by his own admission), so he can not possibly help anyone else generate profit.  Being that he is the NCBA president, he has to have SOMETHING to say, so he runs his mouth, spouting off about concepts that are completely irrelevant because that is all he can do.  He has to hide behind complexities and meaningless talk.  I assume that his motives are NOT malevolent.  The NCBA president has attended many meetings and seminars over the years with Cattle-Fax, university economists, brokers and the like, and has only ever heard about these meaningless concepts, so he actually believes that demand, cattle on feed numbers and exports are actually important.  This is because he has not and does not think for himself.  He relies on these other "smart" people to think for him, and ultimately tell him what to say.  This is truly odd for a "President", who is supposed to be a leader.  Hmmm.

So, if any of you know who this chap is, you might forward this to him.  A man of character will realize his shortcomings and work to correct them - post haste.  A man lacking in character will attempt to hide, avoid or explain away his deficiencies.  Just like Barack Obama the feedyard manager.  As it turns out, I am highly skilled at helping men correct their deficiencies when it comes to cattle marketing, and would be genuinely delighted to help the NCBA president to correct his massive deficiencies on that topic whenever he is ready.  See my tower ad to the right.

Forecasters are killing the North American Cattle Industry.
"Global warming" is a complete fraud designed to advance the cause of socialism and enslave humanity.
Abortion is the murder of an innocent human being and is never justified under any circumstance whatsoever.
Every human being is a question, to which the ONLY answer is Jesus Christ.