Good Saturday evening!  Another round of thundershowers is blowing into Lone Tree, CO this evening.  What a cool, wet summer we're having so far.  I can't say as I mind.  The old energy bill stays mighty low when one need not turn on the AC.  But don't get me wrong - I LOVE MY CARBON FOOTPRINT.  And so should you!

In case you're keeping track, there have been no comers yet on my challenge to defend "economies of scale" from Thursday's post.  I predict those crickets will continue to chirp for a very long time.

Let's do a little Saturday Night FUN WITH MATH, shall we?  Was anyone out there at Ogallala on Wednesday?  Here's a little magic from that sale:

719# top-quality steers went for $111.72 or $803.27 gross

815# top-quality steers went for $97.00 or $790.55 gross

There are many angles of attack here, but let's spotlight just two of those angles.  First, the stocker man.  Picture it, you're a hard-core, Western Nebraska steer jock.  You have seven-weight steers in inventory.  What should you do?  Most would say, "Put more weight on them!  The big shots in Denver say that weight gain is the path to profitability!  Take 'em to nine!"  Bull poop.  The big shots in Denver don't know what they're talking about.  It is obvious, irrefutable and unimpeachable that the seven-weight should be sold IMMEDIATELY.  Just look at the two numbers above.  Does anything strike you?  Do you feel as though you are being beaten over the head with the sweet tire iron of arithmetic?  You should.  The 815# steers went for FEWER DOLLARS PER HEAD than the 719# steers.  This is the market SCREAMING at you that the seven-weights need to be sold NOW. 

Contrary to the popular propaganda, you don't make money in this business by putting weight on cattle.  You make money in this business by knowing when NOT to put weight on cattle.  Feel free to quote me on that.  The proof is staring you in the face about four inches above your current line of sight. 

Next angle of attack:  the Feedyard.  If Floyd Feedyard has a gun to his head and absolutely HAS to buy either the 719# steers or the 815# steers above, which should he buy?  The answer is the 815# steers, without any question.  He will come out $12.72 to the good just on a pure cash flow basis ($803.27 - $790.55 = $12.72).  But that isn't the most important factor.  We mustn't forget that Floyd Feedyard would save a PILE of money in gain costs.  Let's say Floyd is running a cost of gain of $0.80 per pound.  By choosing the 815# steers, he is bypassing the 96 pounds of gain that would be required to take the 719# steers up to 815#.  Multiply the 96# by Floyd's $0.80 cost of gain and you get a savings of $76.80 per head.  Now, add the two together.  Floyd would be $12.72 to the good on an immediate cash flow basis, and SAVE $76.80 per head in gain costs.  That is a grand total of $89.52 per head. 

Now here's where I get mouthy.  There are guys reading this post who are making up all sorts of excuses as to why the seven-weights are justifiable.  It probably has something to do with an out-date, where the futures are trading, placement projections, or some mouth-breathing stupidity like that.  I know, I know.  I used to live in that crack-smoking world, remember?  If you're fighting me, I just want to ask you one question:  How's that forecasting macro-economic stuff working for you, buddy?  Has it "saved" you from having a feedyard full of $100+ per head losers for the last two-plus years?  You can keep fighting me if you want.  In fact, you can fight me right into Chapter 7, if it really makes you feel good.  And after your feedyard has been auctioned off by your bank, $790.55 will still be less than $803.27.

Remember, y'all, I pull no punches because I LOVE YOU.  Nicey-nice and $4.50 will get you a cup of coffee at Starbucks.  It won't save your operation, and that is my SOLE concern.