Master Feeder Cattle and Sheet a

see some of you that don't know me I'm Gary Ellis and I'm working as the assistant director of the feeder cattle department under Walt Hackney I came in in March of this year so there is a few of the things that I'm not that familiar with in the feeder cattle Department I worked fat cattle for the organization for about four years and I was gone two years and then I come back this year in March and started working feeder cattle again some of the things I want to talk about is some of the different ways that we do go about moving cattle through the organization and I'd say probably the number one way is future contracting cattle I want to go into that in a little more detail so I'm going to start off with regular pricing meetings or ratification meetings and regular weigh ups and some of their advantages to the smaller producers we work these way ups a lot in Missouri and the areas where we do have smaller cow calf herds and this enables us to be able to come up with load lots of the different grades or different sexes of cattle just as if you were one large producer out here with five six hundred head of cattle so it is a big benefit to the smaller producers in these areas where they don't have quite as large of ranches and farms or quite at large of cow herds we do a lot of shipping also in load Lots if you have a load lot of cattle or better and preferably either a straight load of stairs or a straight load of heifers it's possible to move mixed loads but you have a little more problem and you do if we've got a straight load of stairs or straight load of heifers why feel free to call them directly into the office and we'll try to move them on that basis or if you're setting in an area where you have a feat of representative that works your area get in touch with him on it I have a little bit of a problem right at the present time in the office which we're going to get corrected as far as help and it is a little bit of a problem right now if someone calls in with just a short load of cattle and wants to try to get them moved we really need to try to get a hold of our collection point on this type of a situation get a hold of your collection point tell them what you've got and see if you can get them interested and setting up a feeder way up if you have any problems if anybody tells you well you know you're the first guy it's called in or this is going to make me 30 or 40 head and it just doesn't look what look like we're going to have a feeder way up then you call me and the collection points don't work under me but they work under the volume program and I'll sure get in touch with the volume department and we'll try to get that little situation straightened out because we should be able to move any cattle any time you want to be able to move them and we sure should be getting these points put together where they can move feeder cattle through them all the time so again load Lots or better or contract cattle you can call directly into the office I want to go into this Ford contract in quite a bit of detail because we have been working on this probably for two weeks out of the office then we came down early Monday evening and met with Mr Duncan and Joyce riles and well I'm not gonna go through all the names here all of our feeder cattle representatives from across the country and we went through this thing in quite great detail and tore it all apart and put it back together and we want to show it to you today on the board here it's going to be kind of a mess because it's we tried to fix up something we could show on the overhead and some of the fine print doesn't show but we've got the major points in it and a few of the changes in it that we have made so far and the changes we have made in it are actually just to pull the buyers contract and the sellers contract together because we did have some instances last year where they just didn't quite match up and it could have been a basis for some problems whose real proud of everybody last year we did come out of the thing without any problems really so we're really proud of the kind of job everybody done so without going any further on this I'm going to start in on this floor pricing contract and if there's any questions while I'm going through the floor pricing contract I just raise your hand and we'll try to stop and answer more we're at or if you want to add something to it something you think we need in it why stop us also and we'll try to get it put in if some of you people in the back could want to you can move up this away I don't know how well you'll be able to see this from back there so right now is a good time if you want to move up this way part of this is pretty well self-explanatory this sheet that I have on here now it's going to be a little bit short I'm gonna have to add another one on for the bottom of this one because this goes on legal paper and we don't have a machine down here to put this on the legal paper to go on this machine first part of it is a safe pretty well self-explanatory your name your address telephone number membership number and you get down into your first section here that is the same thing that's been in all of the old contracts bless your brand number and then we get into section 1 here which we have pulled out the section that used to say immediate sale and immediate delivery and just left one section in there now it was we figured it was close enough if you were putting cattle down on a contract or a at a ratification meeting for a current sale it's going to be a day or two later so if you want to get right down to fine facts that's a future sale so we cut that part out of the contract to kind of shorten it up right here as far as were concerned in selling the cattle is probably the most important part of this contract as far as we the people who are supposed to sell it our concern I got a lot of contracts in on this last year that had the number of head blank blank blank blank and it makes them pretty tough to sell because you don't really know what you're talking about and that's the first thing you get asked you know I've got 428 head of cattle at Pawnee City Nebraska and we want to sell them we want 90 cents for and the first thing he says well you know so what what are they so it's important that we know what they are and we do have some problems with this being filled out as to what the cattle are the estimated grade probably isn't all that important on there as long as we have the sex I would like for the people to go to little more problem a little more problem themselves with getting the breed in there if they could mixed is great but the mix could be anything so if you go to just a little bit more problem on the part where it says breed rather than just putting mixed weather there are going to be black bullies or limousine cross or semi tall cross I don't think most the time I'd be particular what they're crossed with as I would just if they're going to be English bred cattle or if they're going to be exotic crossed cattle or what they are this is the first question we're always asked other than maybe what do you think you have to have for so that is very important that we get that down like I say the grade is not that big of a problem your estimated delivery weight whether you contracted cattle this year or last year or not I think most of you pretty well the where regardless of where your sell your cattle what they normally weigh and that's about the best thing we can go on because there's none of us know right now before these calves are born for sure what they're going to weigh next fall it's going to depend on the weather conditions but get that as close as you can is to kind of what the cattle done last year then your delivery dates I'm sure about everybody here that ever contract it is aware of what we do there will normally use a fifteen to a thirty day period the calves could be signed up from well let's say November 1st to November 15th delivery of 1980 or November the 15th to November the 30th or if you prefer a 30-day delivery period say the 1st of November to the 30th then what we do within that is when it comes a little closer time to November we will actually set the delivery day or days depending on how many cattle are on the contract if you've got two three five hundred hit probably up to seven eight hundred hit cattle can probably be delivered in one day you go to talking three or four thousand cattle through some of these collection points it's virtually impossible to deliver them all in one day so we may have a two-day delivery date set up on the cattle we've gone in down here and in the event of a proposed head count is altered by an act of God winter death loss sickness so on and so forth actual head count will be supplied to the nfo home office corning Iowa by July 1st of that production year the reason we've done that is we sold several contracts this way last year to the buyer with the understanding that these calves were being sold and they weren't even dropped on the ground yet so what we were saying was this is a tentative figure of what this producer plans to have next year should we run into an extremely severe winter or run into sickness we had one case in Montana last year were we run into a little brucellosis and a herd and the guy had to sell his whole herd so that's the reason for this in the contract as long as we let him know the exact headcount by July 1 then we can deliver on that basis instead of the original basis now that can be changed like to say only strictly due to an act of God so that Clause is in there to cover that we have that same clause as I said in the buyers contract to cover us on that end so I haven't had a lot of questions the guy has asked me well what am i I can't sign up cares for there on the ground what if they all dire you know what if half of them died or what if three or four of them died so this clause is in both the buyer and seller contract to cover us in a case such as this would be then we go on down here and the cattle described on this contract are to remain on said premises until time of delivery in the event said cattle are moved or removed from said premises the nfo feeder rep who witnessed the seller contract must be notified immediately as to the location of the contracted cattle and again the reason for that the buyer has the option at any time after he's bought your calves and give you a partial payment he has the it's up to his discretion at any time if he should wish to look at those cattle to check those cattle so it is important that we know very well for the cattle are located then we get actually into your floor price formulation and it states that these cattle will not be sold for less than will say 80 cents on choice steers weighing 400 pounds and 75 cents on choice heifers weighing 400 pounds without prior approval of member all other weights will be sold on a wait-wait break basis now I would suggest at this point and some of your feeder representatives your lockers which you should visit with all this in your own area but I would suggest if you're thinking of selling your calves are gonna weigh 500 pounds you should probably put 500 pounds in there and the price that you'd want on a 500 pound cat because I have had several of these that we went ahead and filled out at 400 pound calf at 98 cents you know and the man was pretty sure he wouldn't have any cares right at that price exact weight range anyway so I prefer if you think they weigh 6 you'll put in 6 weight cattle there and the price you prefer on a six-way cat that's the way we prefer you fill out the price breaks on the contract the weighing conditions we're leaving that blank and this is something that the feeder reps collection point people the feeder cattle blockers whoever happens to be putting it together it's very important that they work this out with the people present at the meeting because I'd say this would be probably worth 60 70 percent of your problem that come in would be that somebody didn't understand the waiting conditions so be sure at all your meetings that you've got your weighing conditions down pat on this contract before you send it out before yes somebody sign it send it back in right on down on the bottom of this contract for sale on this part we didn't do a very good job on bear with us here notification of the final sale agreement I understand and agree that I will be notified when my cattle are sold and notification of the final sale agreement will become a part of this original contract the delivery date established will not be changed for any reason other than event than an act of God 10 days prior to 30 days prior to delivery they'll be noted by 30 days prior to delivery date and you must have cattle in your ownership that will be delivered on this contract must be in your ownership for 60 days before delivery so you will be notified 30 days ahead of the day of delivery of this contract and the cattle should be in your possession 30 days that's got so erased in there I don't know anybody can read it or not okay the delivery okay okay it starts out to assure buyers a farm-fresh cattle members must have ownership of cattle at least 60 days prior to delivery date that's the way it reads okay now after your cattle are signed up on this and turned in to your feet RF or to your blocker when the cattle are sold will send one of these back to your feeder blocker this is a notification of final sale agreement and this is the instrument that we said in the other one would become a part of the first contract and what this does this gives you your breakdown just like it was on your sheet of your number ahead and your price with the following discounts and premiums then we've got to base the base price on the cattle with the following discounts and premiums then we go into the total weight breaks by pounds on probably steers on one side and hippos on the other side then we go into any cattle weighing outside this weight range will be priced day of delivery to buyer by buyer seller has the option to reject offer and retain ownership so we're saying if we've got cattle signed up to 350 to 550 pounds somebody brings in a 700 pound cat it will be priced by the buyer will negotiate with our nfo representative on the price of the calf but it doesn't fit the contract if you want it to go while we can we can negotiate the price with the buyer there that day that it will not go at a contract price because we break off the contract price at whatever weight range the calves were ready to be and accepted to be by the contract and sold to the buyer at those weights other than that they'll have to be priced day of the way up okay now what we've got in here is exactly a duplication then of what's on the other one CAD described in this contract are to remain on safe premises until this delivery in the event set cattle or move from said premises and FOP directly witnessed the seller contract must be notified immediately as to the relocation of contracted cattle now this instrument will come back with your partial payment to your feeder blocker who will deliver your partial payment to you along with this instrument and you will again sign that you had accepted your partial payment and he will witness it we have any questions on this yes yes there's a wave condition a place for weighing conditions on this contract right in the center of it there right below your pounds your weight brakes and there's also a place for it on the original contract you first sign right as I mentioned I mentioned that earlier when I showed you the first one be sure that your ratification readings on these contracts that you get these weighing conditions hashed out because it is something that's very important on the contract I said I imagine 60 to 70 percent of the problems that might arise on one of these probably would be over weighing conditions not being understood in this type of thing so keep that in mind any other questions on the contract yes to buy and buying choice cabin he got him he didn't think they were choice well we normally most of these contracts I think are written that there is a price off for goods now if it is strictly a choice contract if we had written the contract that is strictly choice yes he has a right to turn the candle down in most instances and most of our contracts are written with a clause and there's so much all for goods most of our contracts are also written any cattle that doesn't great choice if you wish to you may take them home if that's the case in Reverse in fact episode 7 choice what in regards to this gentleman and Carolyn just acceptable now my question is I understand to the content but the question what happens to the physical delivery very strong to say that to say that the seller must I as a supervisor are you are you understanding of if any of you happen to be from Missouri Kansas and South do you understand what Mr just explained because that's precisely the way it has to be handled yes sir I think okay now see this is the important thing your contracts in those areas certainly need to be written that way that your number one cattle at such-and-such a figure and your number two cattle discounted so much from that with number three cattle discounted so much from that your contract should be written on number one cattle with a discount for Less down the line in grade or you know it wouldn't matter you could write it on number two cattle with a plus and a minus but it works better just to start with the better cattle and deduct from that therefore your question you're asking then what if the contract was strictly written for number one cattle with number two cattle at a discount and no mention in number threes in that case the contract is for number one and two cattle and a number three cap would be unmerciful on the contract yeah if you had we don't right right that's correct okay back in the back anybody yes well see really there is in feeder cattle it may not be draw it out in quite the terms that it is in hogs or slaughter cattle or coal cows but there are standards for grading feeder cattle and these you know we've got to have a standard thing as far as nfo is concerned if we're going to maintain our markets this is one of the most important things we have we've had several areas go through this situation we've got one area in this situation right now and until you get a man that can do it grading several points moving cattle out of those points it gets to the point where it's impossible to sell cattle ow the points if you've got one man grading the cattle at each point so you're making loads of cattle or something out of five six four points everyone I'm graded by a different individual you go to putting all those cattle to one buyer and nothing matches they all clash and you've got problems immediately we have any more questions and we have a little time after the meeting why we'll get into a little further to it then but without going any further right now I want to let Walt Hackney come up here and say a few words to you well okay thank you Gary for your information the the feeder cattle division is at this time held together as well this fall I believe as it has conducted itself for quite a long time there's about three or four reasons for that have had happening one major reason is Joyce Ryles sitting here from Montana is the supervisor for the feeder division in that country and then around in the Colorado several states but in that direction he has a man that works with him Don him sandy they're sitting at the back of the room we've got other feeder representatives in mr Duncan in the southern area which would be Texas Arkansas Oklahoma he has a larger area than that but that's the geographic locations now these men this fall worked under no leadership whatsoever in that Dave Miller who was the director of the feeder cattle division had become so embedded in the organization that he had let some of his personal holdings and his personal business go by the wayside to the point where he absolutely had to take a grip on his own personal business and he chose to do that this fall because it was imperative that it would be taken care of when that happened Gary Ellis was in Corning and became the assistant director but Gary's primary function has been handling the collection point physical deliveries that we're referring to here which left all of that contract business in the hands of Joyce Mr Don M sandy and I'll bet you I've missed somebody and I apologize for it I can't look over the crowd and see who else is here but these men have conducted this feeder cattle program this fall almost to perfection it was a point of extreme concern to the National Board of Directors and to all of us in Corning about what physically would happen with Dave not involved but he had done his job well he had coordinated well with these three individuals I'm referring to and they conducted your business for you with these buyers in the country much much better than it has been done in the past a case in point is we have no outstanding monies now on any of our deliveries that I'm aware of we put out of the home office actually our only involvement was assisting these men on those deliveries in accounting in helping schedule in coordinating the deliveries for them if they required the help if they asked for it but the function was done by people interested in your program the problems that created or were created came from disinterested members the problems came through a certain amount of apathy on the part of some of our feeder cattle shippers all I'm getting around to saying is you have probably one of the finest crews of feeder cattle representatives working for you of any cattle company in this entire country I've said this several times but I really mean it I know several order buyers in the business today that would come into the Corning office tomorrow morning and would lay out about any price we ask in cash for our member contact list they would recover whatever they laid out on the first go around trading with you one on one and you believe that your forward contact program would not exist and if it did it would be down to where the gamble was lucrative for them and so on and so forth because you have got to have these mens involvement in properly moving these cattle that isn't to say that we are infallible it isn't to say they're infallible but it is to say that they are as astute in moving feeder cattle as any country cattle buyer or any order buyer that you admire in any of these terminal cities these men have that exact same qualification with one exception they're on your side and you're paying them they're your people to conduct that business for you rather than paying somebody to trade against you I'm having a little problem of understanding why there aren't more total committed feeder cattle delivers now you can tell me about your problem here and your problem there that created a little bit of the old feeling on certain instances but if you sit in Corning and if you watch the national program as it develops and as I have to watch it I know what you've got in this feeder cattle division I know what you've got in these people in this feeder cattle division I know that any given one of these men I've discussed could walk out of here tomorrow morning and they could go into private business and they could come out and trade again yet like they're trying to trade for you and they'd make more money and I'll guarantee you that can happen you've got to recognize that this business that we've revolved around to at this time is recognized among any order buying facilities in this country as being one of the major source of supplies of feeder cattle that every feeder order buyer in this country has they want our business not because they can shoot you in the foot like they have done in years past and get cattle cheap from you and give the higher price to your neighbor that's a non-member that isn't it they want you now because we have men like these I've described that can give them a product that they're paying for and they're willing to buy it from us because they get this consistent volume and they get that volume in a supply that they in turn can use on someone else or for themselves now all I'm asking you to do is recognize that you ran a popcorn stand years ago and it wasn't worth a damn you've got yourself a program today that is envied by a lot of people and if you look at some of your competitor farm organizations you'll find some of them trying to duplicate you they got a little problem they can't guarantee the checks they can't guarantee money there are rubber checks all over this country as a result of that this fall and if you have been or are in the feeder cattle communities you are here in those stories you find one in the national you find me one rubber check where a member did not get paid for what he produced you can't do it George Rawls made a comment this morning about that very thing Joyce Ryles total comment was he has got as many if I believe if I'm saying it right Joyce he's got as many order buyers coming to him now to put their cattle through his program and he does the members why the guarantee of the money that's the prime reason now if you're that strong and if you've got that many bucks why don't you keep them in your own pockets and participate more and get your neighbors and sell them on this program you see they're the ones that are selling to that auto buyer that's coming back to Joyce and trying to get him to market to cattle through their national farmers and that's a fact I believe Joyce I said it to me two or three times I heard him commented about it here this morning and you've got to believe that that's exactly the case there's areas that we need to do a lot of work in as as has been discussed here a while ago there's no excuse for those states that Joyce has where you have the larger cow herds and you have the consistency of quality and breeding and so forth there's no excuse that that community can't triple quadruple whatever in volume there's no excuse at all there is a problem on our part to effectively merchandise the very small producers cattle collectively put together as an example jackal axes here his national director he's from Arkansas he's involved in a point there in Arkansas and it's a problem for us it is a problem though for anyone to handle those cattle we can do it through sheer volume alone than they can do it by themselves but we have got to refine the grading program that this gentleman has been discussing we've got to refine that grading program down there to make a consistent product for the buyers so then we can get that price up for those people it isn't insurmountable it can be handled and it is going to be handled we've been talking about it as often as possible here at this convention with Jack and those people in that community and more Duncan is the supervisor in that community and he is very aware of that problem but we will handle it but we must have your total cooperation when these men go back after this convention we're going to start ratification meetings for forward contracts immediately we have got to get those cattle on paper and we've got to get that priced bid on those cattle on paper so we can base this market if we don't have this thing based by the 15th of January toward the 1st of February you're going to lose your grip the feeder market will degenerate if we don't put the base under it soon when Joyce goes by call me and I are planning to go to Colorado and conduct the ratification meetings in Colorado Don M sandy is going to handle as much of the Montana community as he can we have people in the Dakotas that will be called on to assist in these ratification meetings but they're going to be trained in this new contract they're going to know what the language has got to represent to the member and to the buyer and when that ratification meeting is conducted there's going to be a clean slate when they walk out but you people have got to set those ratification meetings for us we don't have the staff the manpower that it takes to go out to each and every collection point in this country and set those meetings up personally we've got to have your response on that when you get the community ready for the meeting will schedule the thing will come in and we will hold it but please give us that consideration you've got the motor in your car all you've got to do is push on that starter that's the position you're in I don't have much else to add except I would say this I made it I made a statement to the National Board of Directors about three months ago and I gave them my commitment that the feeder cattle division in this fiscal 1980 would develop 50% more volume than we developed this year I feel that it is very easily obtained they sold that commitment I made them to the bank in terms of working capital and so forth and the banks felt that it was obtainable and extended our credit and so forth under that kind of guideline it was a gamble that I took I took it because I've got confidence in my staff you have got to express that same confidence in his feeder program you have to you've got to give these men that cooperation they must have in that community of yours in order to make this feeder cattle lucrative I also made this statement to the Board of Directors through Devon woodland that the feeder cattle department in the next two or three years would be the highest income department that the national farmers organization have in terms of volume and I'm comfortable with that statement also but you people again have got to prove me right you've got to lend your support to this feeder cattle program if there's problems let's talk about it for heaven sakes call me or call please turn the tape over to site number two