Some ABC's for U and I

A is for Ability.
"Ability is a poor man's wealth." Matthew Wren
B is for Business.
"Always tell yourself: The difference between running a business and ruining a business is i." Frank Tyger
C is for Chance.
"There are no chances so unlucky from which clever people are not able to reap some advantage; and none so lucky that the foolish are not able to turn them to their own disadvantage." Francois De La Rochefoucauld
D is for Desire.
"We should aim rather at leveling down our desires than leveling up our means." Aristotle
E is for Effort.
"Whatever your work is, dignify it with your best thought and effort." Esther Baldwin York
F is for Freedom.
"The basic test of freedom is perhaps less in what we are free to do than in what we are free not to do." Eric Hoffer
G is for Giving.
"No one would remember the Good Samaritan if he'd only had good intentions; he had money too." Margaret Thatcher
H is for Health.
"Health is the vital principle of bliss." James Thomson
I is for Industry.
"The way to wealth is as plain as the way to market. It depends chiefly on two words: industry and frugality; that is, waste neither time nor money, but make the best use of both." Benjamin Franklin
J is for Joy.
"Real happiness is cheap enough, yet how dearly we pay for its counterfeit." Hosea Ballou
K is for Kindness.
"In nature there's no blemish but the mind; none can be called deformed but the unkind." William Shakespeare
L is for Living.
"To live is not to learn, but to apply." Legouve'
M is for Money.
"The safest way to double your money is to fold it over and put it in your pocket." Kin Hubbard
N is for Nature.
"In nature there are neither rewards nor punishments; there are consequences." Robert G. Ingersoll
O is for Opportunity.
"An optimist sees an opportunity in every calamity; a pessimist sees a calamity in every opportunity." Winston Churchill
P is for Prosperity.
"That some should be rich shows that others may become rich and, hence, is just encouragement to industry and enterprise." Abraham Lincoln
Q is for Quality.
"People forget how fast you did a job - but they remember how well you did it." Howard W. Newton
R is for Respect.
"Reverence for life demands for all that they should sacrifice a portion of their own lives for others." Albert Schweitzer
S is for Spirit.
"I am only one, but I am still one. I cannot do everything, but still I can do something. I will not refuse to do the something I can do." Helen Keller
T is for Talent.
"Shun no toil to make yourself remarkable by some one talent." Seneca
U is for Usefulness.
"The function of man is not to attain an object, but to fulfill a purpose; not to accomplish, but to be accomplished." S.E. Stanton
V is for Virtue.
"Sincerity and truth are the basis of every virtue." Confucius
W is for Wealth.
"Wealth, like happiness, is never attained when sought after directly. It comes as a by-product of providing a useful service." Henry Ford
X is for eXample.
"Few things are harder to put up with than the annoyance of a good example." Mark Twain
Y is for Yahoos.
"It is the peculiar quality of a fool to percieve the faults of others and to forget his own." Cicero
Z is for Zingers.
"In laughter there is always a kind of joyousness that is incompatible with contempt or indignation." Voltaire

A Competitive Edge

Boy, does it take a lot of effort to best the competition? Talent and hard work get pushed to extremes, just to get a small step up.  The typical difference between the best and the runner up is only ten percent.

How do you capitalize on a ten percent advantage? That takes salemanship. It's a difficult balancing act. If you overstate your ten percent advantage, there can be misunderstanding. Your honesty can come into question and you could be branded a bragger. Understating your edge will not get you noticed. You will fall into the crowd of the also ran, despite all your extra effort to achieve a higher position.

The more competitive the enviroment, the more things can get stretched to capture attention.  Authors have to be edgy, speakers have to say something controversial, entertainers must display pizazz! The audience has a short attention span.  People are busy and don't like to waste time with the trivial ordinary.  It takes something abnormal to catch their attention.

It's got to be a red hot spark to ignite the fuel in a high compression environment. If you can get their engine started, they will spend another five seconds looking closer.  You have to risk being edgy in order to publicize your edge.

There are few experts in the world. Most of us have a broad knowledge of several subjects. Not many run very deep on any particular thing. Generalists are going to have trouble differentiating ten percent in most subject matter. To the casual observer, there is no apparent difference. What incentive do they have to choose the better option, if they can't tell the difference?

I love Amazon for this reason. They have found a way to make it so easy to compare products. I feel like an informed consumer for nearly every purchase I make. They have a quick visual rating system for the busy bodies, and you can read reviews for more detailed information. I am mostly ignorant of the variety of goods that I want to purchase. They found ways to make learning easy and quick.

When learning is not so easy and quick, it takes a commitment of time to the subject. Sometimes salesmanship is best directed at that objective: getting the customer interested in learning more. If you have the superior product and your customer arrives at that conclusion on their own, it is far more impactful than giving them the raw data up front.

Salesmanship is educational. How can you help your subjects to learn? Many people are resistant to learning. They are too busy and have higher priorities. When I detect that situation, I suggest that they make the simple comparison on price.

Price is a relatively easy comparison to make. Establish an even quantifiable measure and compare how much you get for the same dollar. It could be mass, weight, or pieces that you get in return. All other factors deemed equal, why not try to stretch your dollar? We all want the most for the money.

In the case of matching prices, we have a dilemna. We have to compare the next value contributing factor: Quality. This is often a little more difficult. Sometimes it takes a little expert knowledge to discern a ten percent difference in quality.

Most people don't have the capacity to become experts in every subject that they shop. Educational salesmanship takes a lot of added effort. Is it worth it?

It took extraordinary effort, sometimes extreme effort to achieve a competitive edge. Why not make the extra effort it takes to commmunicate that?

How much Hay to feed?

"The more, the better!" My enthusiastic, capitalist spirit immediately responds. "I'll make more of it!"

But, seriously, in the small bales business, you meet a lot of new people. A few of those people are green and learning.  How much hay to feed is a very common concern.

The first consideration is the quality of hay.  It stands to reason that the better the Relative Feed Value and the higher the percentage of Total Digestive Nutrients, the lesser the quantity is needed.  Hay quality can vary widely from farmers to farmers, field to field, and cutting to cutting. There are scientific methods for measuring quality, but most people are just looking for general guidelines.  I have over a decade worth of experience feeding cattle, horses, and sheeps.

Horse nutrition is the most complex and intimidating.  There are volumes of books on the subject. Mistakes are expensive. I will only share the most basic observations of horse feeding and recommend further study on the subject.

I have more confidence with sharing tips on feeding cows, sheeps, and goats.  The starting point that I recommend is 5% of bodyweight.  It's easy math and gets you in the ballpark.  Take a 100# ewe for example. 10% is 10#, just move the decimal then split it in half.  So, 5# would be my daily ration to start with.

I recommend feeding twice a day, so you would feed half of the daily ration in the morning and the other half in the evening. The reduction of waste over feeding once a day is significant enough to warrant the extra effort.

When herbivores are fed a large quantity, they pick through it to get their full of the sweetest stuff.  When they come back later to eat again, a lot of the good feed left is soiled and they will not eat it.  In those instances, their fiber intake suffers and you have to feed more to make up for the waste.

I stress 5% as a good start, because of all the other variables.  The weather, the animal health, alternative food stuff, supplements, and hay quality are all factors.  The good news is that you can observe your animals' behaviors as indicators to offer more hay or taper back.

What is the interest at feeding time?  Are they overly enthusiastic?  Are their feeders empty?  Do they stay in one feeding spot or hunt around?  All of those observations can tell you about how much you are feeding. Horses, however, are unique in this aspect.

A horse's favorite pastime is eating.  They will eat all day, every day out of boredom.  Left alone in a sufficient pasture, they will eventually turn it into a nuclear waste land.  1) Don't mistake a horse's enthusiasm as hunger. 2) Don't judge their clean feeder as insufficient. 3) Volume by body weight and body conditioning are probably your best indicators.

Cows, sheeps, and goats won't eat all day long.  They stop when they are satiated and will lay down, chew cud, and meditate. It typically takes about four hours out of the day for them to get their full.  If you are feeding twice a day, you should see them losing interest after a couple of hours each time. If they are taking longer, that should be considered with other indicators that you may not be feeding enough.

How Debt creates a Bubble

There are plenty of big spenders out there that are dependent on creditors to live beyond their means.  Non-discetionary spending leads to enormous amounts of debt.  That behavior and all the hot air used to justify it creates abnormal financial bubbles.  Bubbles burst, eventually.  What have we learned from our past?

Remember the big real estate bubble only ten years ago?  When the big spenders were flying high there was a lot of hot air justifying the irresponsible spending and touting a "new" normal.  For a lot of political reasons, money was being lent at greater amounts and to more people than ever before.  The political correctness called them  "sub-prime" loans.  The lenders found out that they could make money off of loans that they didn't expect paid back.  They could profitably lend money to folks without the will or the ability to pay it back, so long as it didn't get out of control.

The typical bubble formation starts innocent enough.  A responsible buyer finds an interesting property and performs diligence in preparing a reasonable offer.  They weigh all the negatives against the positives and come up with a number.  But even before they can submit their offer, another buyer quickly appears without concern for the value.  With a pocket full of loaned money, they don't hesitate to make a full price offer.

The neighbors across the street take notice of how fast and how much the property sold for.  They decide to list their property with comparable amenities for ten percent higher.  It sells immediately.  The escalation continues and the bubble is formed.  Extra money in loose hands perverts the natural worth of everything.

Eventually, the loose money runs out.  The early careless buyers use all of their available credit and get to the point where they need to sell their house to continue their lavish lifestyle or avoid bankruptcy.  They are shocked and dismayed when they realize that nobody wants to buy it for what they paid for it.  Nevertheless, it becomes increasingly important to sell, so they drop the price.  When their neighbors get in the same boat, they lower their price too.  Almost as quickly as the bubble was formed, it begins to break.

Before everybody realizes what is happening, their property values have dropped significantly.  They don't want to continue paying on a property worth so much less than what they are paying!  Daunted, they just stop making payments and the foreclosure process begins.  The foreclosure system is designed so that the lenders still come out ahead, but only for a normal amount of defaults.  When the rate of defaults exceeds the designed system, the lenders find themselves in financial trouble! 

The business investors are among the first to see the significance.  They don't want their money invested in firms that will not be able to earn a profit in the fore-seeable future.  The mass hysteria from the total collapse of one sector, bleeds off into another sector.  The whole "house of cards" comes crashing down.

That was all ten years ago; so what?  History doesn't repeat itself, exactly.  We have a lot of smart people whom instituted changes and laws so that can't happen again.  Perhaps the most significant of those are contained in the Dodd-Frank bill?  Aren't they currently in the process of dismantling that bill?

What is a bubble anyway?  How can we recognize it?  A bubble occurs whenever loose money and the hot-air accompanying it increase the value of property.

So what are some property values at today?  In many of our prospering cities, the median property value is at 16 times the average local wage.  If the average wage earner had the ability to pay half of their income on a mortgage, it would take about 32 years to pay it off.  The average wage earner can not do that due to interest, taxes, cost of living and OTHER debts!  The top three OTHER debts are classified as student loans, consumer debt and automobile debt.

Student loan debt can not be defaulted under current law.  However, legislation can be created by swaying public opinion and that has been in motion for over a decade.  I expect we will see some form of "foregiveness" at tax payers' expense in the next four years.

Consumer debt and credit card spending is volatile.  It is currently very high and that is never a good thing.  Often times, the higher levels of credit are anchored by home ownership.  That indirect relationship creates a covert property value bubble.

Automobile debt has grown to second place in the typical American household.  Not only is it high, but it has exceeded record levels.  This is alarming in itself, but the hot air from the "experts" are quelling concern because "things are different".

Loose money for auto loans has created an obvious bubble in vehicle valuations.  Consumers are borrowing more than ever for the vehicle they commute in to their underpaid jobs from their overpriced homes! 

Things are different.  How are these things related to the crash of ten years ago?  The warning signs are more covert.  The loose money is from other sources than the government subsidized sub-prime mortgages, yet the real estate bubble is still forming.  The loose money is perverting valuation and that is very similar to the circumstances that led to the last financial collapse.

Thinking like an Immigrant

What makes America so appealing that would encourage an individual to pull up roots, leave their home country, friends, and most of their family?  They are putting so much at risk: their livelihood, their relationships, and ultimately their lives.

Free Enterprise.

For most of the immigrants that I know the best personally, the chances offered by free enterprise are the highest motivation.  Most of us home grown Americans take free enterprise for granted.  There's a whole lot of other places in the world that inhibit opportunity with laws, culture, and corruption.

Just being born in the USA is like winning the lottery of life.  You are born into millions of opportunities for a better life.  Many immigrants arrive looking for employment, but are destined for self employment.  Free enterprise offers the best chance of success towards that goal.

Why do so many immigrants realize so much success in the USA?  Despite so many barriers - not the least of which being the language, they are able to surpass many homegrown Americans toward economic prosperity.  My observation is cliche', but it is because they work harder and smarter.

Work ethic is a requisite.  Nothing moves without being pushed or pulled.  I don't know of a single successful immigrant that is not a hard worker. 

Duty is held in high regards.  Duty of 365 days a year.  Duty doesn't take a holiday off, it doesn't call in sick, it doesn't offer excuses.  It is a complete dedicated effort.  No sandbagging allowed!

So many homegrown Americans are lacking that motivation.  Many are complacent underachievers.  Some are self defeating pessimists and others are malcontents.  A few spoiled children that never grow up and a few are overly ego-tistical.

A had a friend who was a talented bike racer.  He would train very hard for a race only to go out the night before and get drunk?  Some people have such big egos that they sabotage their own efforts so they have a ready excuse for failure.  They never have to look close and serious at themselves because of the obvious reason for failure that they provide.

There is no sandbagging among successful immigrants.  They don't play that way.  They were held back in their homelands.  Remove the reasons of failure that were beyond their control and LOOK OUT!

Although, hard work is essential, we all know that it is not the only ingredient.  You can work very hard on a treadmill without getting anywhere.  Successful immigrants don't confuse action with progress.  They are adept at working smarter.

They see hidden opportunities, they establish a goal, and then they go after it.  They are inherintly risk takers and don't fear failure.  But they do not expect immediate gratification.  They are measured optimistic and certainly not self defeating.

Many of them suffered defeat in their homeland.  Usually the fault was none of their own.  They were working hard and smart, but somebody changed the rules!  That kind of thing can happen in America too, but it is far less common.

Americans hate corruption.  We also hate anything less than fair play.  But we LOVE a figher and a winner!  Just ask General Patton.  A fighter, a winner, a smart, hard worker thrives in the free enterprise of the USA.

Shopping Locally - for Sagacity

Financial success is aplenty if you look for it.  From an early age, I have been cognizant of learning from seemingly unlikely sources.  Business philoshophies and strategies have always peaked my interest.  So with my parabolic reciever aimed in that direction,  I have gotten a lot of repeat strong signals leading me to believe there is some truth to the matters.

"First, we find a way to make money, and then we just do that over and over again."  It is a local rancher's recipe for good business.  Seemingly simple, the first part can prove a lot more difficult than it sounds.  Especially in agriculture when it can be like hitting a moving target.

You can be profitable one year, do the same thing and lose money in consecutive years.  The lesson in that realization is to expand the definition by finding something that works more often than not. 

The second part of that strategy is just as challenging.  Controlling all of the variables to ensure a repeat performance can be very difficult if not impossible.  I think the key is in stocking away a surplus to help you make it through times when forces out of your control are against you. 

It might be stated in other more modern words: "Follow the money."  If you have found a profitable business, say in selling beef, don't modify your whole operation to start selling hay.  It sounds like simple common sense, but this mistake is made in all levels.

Remeber when Coke changed their original recipe?  They had an established winner, but thought they could do better with "New Coke".  The resulting fiasco caused a significant loss in market share and a prompt retreat back to what was working.

"First we ask how can we make it better.  Second, is how can we make it cheaper."  This was the simple guiding principle of a NW food manufacturing equipment manufacturer.  I fell in love with it's simplicity, but it is very difficult in application.  Especially in the high tech business they compete in.  Nevertheless, it focusses on two important business goals: quality and cost.

The competitive nature of business requires improvement.  How can you do it or make it better?  Creative thinking and engineering really pays off here.  But do not forget about the second part!

Anything in the world can be improved if money was no object.  In business, money is the objective - so making it better economically is what's important.  Making it better for less than the competition is a fundamental advantage.

"Now you boys always remember this:  It's not how hard you tamp a post, it's how many times."  That old cowboy at my very first paying job was referring to more than building fence.  Henry Ford implementing mass production as we know it comes to mind.  Quality gets so much press, but quantity is just as economically important. 

Many higher profits can be attributed to mass production.  High yields and big numbers can cover up a lot of little problems.  The bigger your production numbers the lower the cost per unit. Don't try to do things in one big effort.  It's the sustained effort that is going to add up.

"The more junk you've got, the more headaches you've got!"  I heard this repeated from the same local rancher many times.  It illustrates the importance of simplicity of design.  The fewer moving parts in your operation, the more robust it becomes. 

Accountants value this as return on assets (ROA).  The more efficient you are with utilization, the easier it is to be profitable.  It's not what you've got that counts as much as what you do with what you've got.  Make the most of what you have before you go out to upgrade your "assets".

"Grease is still cheaper than metal, last time I checked."  I saved this bit of wisdom spoken by another local rancher as my favorite for last.  My whole professional career was based on this premise.

The more sophisticated and better that I became at preventing problems, the greater my worth was realized.  "An ounce of prevention is worth a pound of cure."  is another way of saying it.  It's about working pro-actively to attend to small details before they multiply or grow into major events.

Grease is cheaper than metal and so is paint.  Wax is cheaper than paint.  Armor-all is cheaper than vinyl and molded plastic.  Do you feel like you are vainly wasting your time  by waxing paint or armor-alling seats and dashboards?

Why not change a hydraulic hose before it blows?  Waiting for failure is going to still cost the hose plus the oil spewed at $12/ gallon and worse it could cost you a new hydraulic pump if it runs dry long enough!

To summarize all these tidbits: Attend to details so you can fully utilize a few assets to mass produce a better product or service at a competitive price that you can usually make money at.  That's all you need to know to make a living in the intermountain northwest!

Mined Over Matter

There are numerous studies about the reduction of food value in our modern fruits and vegetables.  It seems that the carrot you eat today is not as packed full of our bodys' essentials as it was years ago.

Modern ag practices have shouldered much of the blame.  The trend has been bigger and bigger and quanity over quality.  Yield is the primary concern and minute compromises of quality are ignored.  If the customer can not see the difference then it is not a significant difference?

Ever increasing yields by means of genetic manipulation, high rates of synthetic fertilizers, and high rates of herbicides and pesticides are all commonplace.  But the often overlooked result of those practices can be the root cause of substance depletion in our food supply - the resulting depletion of soil organic matter (SOM).

SOM has been mined out of our soils for decades.  That practice has necessitated replacing those nutrients with high levels of fertilizer to maintain economical yields.  The trend for big ag and everything getting larger and more expensive creates the demand for evolving crops with higher yields.

Yield is king!  To make margins profitable in the modern ag economy, you must continually improve yield.  There is zero tolerance for imperfections that would compromise yields.  High rates of herbicides and pesticides to the rescue!

All of those practices destroy the biology at work in the soil.  Improving the soil has not been a concern of big ag.  Could that be the reason for the decline in nutrition of our food supply?

I have been taking steps and making decisions to improve the soil on my farm for five years now.  I started out with an average SOM of less than one percent.  This is typical for my area of farm ground that is continuously tilled.  Ironically, our farms was certified organic for six years and that contributed to the destruction of organic matter.  Organic farmers have few options for controlling pesky weeds, so they often resort to additional tillage.

Pulling iron through your top soil kills the micro organisms at work trying to reproduce and increase your SOM.  It's analogous to raking scars on your skin.  The health of your skin and body would seriously be compromised from that continual practice.

For five years I have been instituting conservation ideas and the SOM appears to be responding to those efforts.  This laboratory data that I am basing this assumption on was the source of some controversy last year.

My field man has a lot of years of experience in this valley.  He has not witnessed such improvements in SOM and immediately concluded that the laboratory erred.  I suspect that I am his first "no-till" client.  I base this assumption on looking at farmers' fields whenever I have to drive somewhere (without running off the road!).  This areas farmers are prominently traditionalist, so it wasn't a surprise when he told me that he has not seen much change from one percent in SOM.  "The ground here is not capable of that much improvement."

He went on to educate me of the massive amounts of dump truck loads of importing material that it would mathematically require just to raise a single acre by a single percentage point.  I didn't offer any argument to the contrary because you cannot be too sure about these things initially.  Time will ultimately tell the truth, but a related university study came to mind that illustrates the great mass that life can accumulate out of "nothing-ness".

This particular agricultural university study was to identify the source of the mass required to grow a massive tree.  Measures were regularly recorded of the contained soil, the water added, and the mass of any added fertilizer.  They concluded that the mass supplied to grow the massive tree came out of the air!  The masses recorded from the soil, water, and fertilizer were negligible.

This leads me to believe that the magic in nature can create tons or living matter from the air that we breathe.  Providing of course that we do our part to keep conditions favorable for life.  So that has been my fundamental guiding principle: provide favorable conditions to support life in the soil.

Food, shelter, and clothing?  Life in the soil is not all that different.  It needs food, water, and sunlight.  What it doesn't need is harmful disturbances: tilling, poisons, or pH imbalances.  It's taken a lot of patience and tolerance for less than perfection to improve conditions for the soil life.  The explosion of earth worm populations are a good indicator.

My most recent laboratory tests, along with other observations, lead me to believe that I am on the right track.  My SOM has improved from less than one percent to average about three percent.  Another macro-indicator, the Cation Exchange Capacity (CEC) has also improved from single digits to average in the middle teens.  These improved numbers along with field observations of the soil composition and our increasing yields with lower additional fertilizer inputs all point to improving conditions for the matter that really matters on our farm.