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August 2004

"Living in dreams of yesterday, we find ourselves still dreaming of impossible future conquests." -- Charles Lindbergh

Is this the overlooked quote that causes many farmers and ranchers to live in the daddy-granddaddy world? I believe our dynamic business structure, with its solid foundation and continuing education, is critical when trying to make money within this industry where an average return on investment is three to four percent.

In Granddaddy's era, tracking cattle beyond the loading chute wasn't necessarily part of doing business. They raised beef calves, which went to the market for the best price on any given day. In today's business climate, we face a one-world economy and new niche markets, whereas having an auditable trail appears to becoming a key part of increasing our profits. Understanding these different niche markets and how to create a marketable product for a wide variety of retail shelves and consumer demands is an educational task that we are learning about for long-term goals on our ranch.

Is Certified Angus Beef the market to enter for long-term profitability? It appears they have a strong marketing campaign going on a national level. How about the new Dakota Certified program through the SD Department of Agriculture or Dakota Origin with the SD Cattlemen's Association? Both market beef products raised in South Dakota. And then, there is the Ridgefield Farm's program which requires certified Hereford beef. These are just a few of the marketing options that we are building into our business objectives, and will require a source verified and traceable product through eID tags.

Advertisement to buyers that we meet the criterion for each of these programs and possibly more, is the next step in selling our product. How do cattle buyers know about us and research this information? Are they listening to the auctioneer, do we sell direct, do we sell on the video market or internet, build a Web site, etc...? The 2004 sale doesn't necessarily need much marketing beyond local auction methods; however Dad and I have invested into purebred Angus cows and registered Hereford bulls, thus requiring a better advertisement program for our 2005 calf crop.

"Patience is the companion of wisdom." -- St. Augustine

This is my approach when dealing with the estate planning for our ranch. During this past month my parents met with an attorney they both trust and like. That is a major step in the right direction for assuring the possibility of Heidi and I continuing the family ranch.

In addition, I have been reading the book Passing Down the Farm -- The OTHER Farm Crisis. One word can describe this book, WOW! What a great book that I feel every multi-generation farm/ranch should own at least one copy of. It depicts exactly the key topics that we are dealing with and some we have yet to face. I plan to buy a copy for my parents to share with my off-farm siblings, which as a result, I hope, will help open the doors of communication more widely. They will see this isn't an abnormal challenge on family farms and ranches, we are normal.

A favorite paragraph, which I can relate to from the book states, "A farm owner in his 60's sees much less long-term benefit in risk-taking than he did 10 or more years ago in his 50's. In his 40's he was much more comfortable with risk, and in his 20's or 30's, it was probably his ultimate challenge. It might be that the successor is only expressing an attitude the owner, himself, held 20 or so years ago".

Yes, yes ... At 30 years old, I am very aggressive, while my father is in his 60's and conservative. However, in raising seven very expensive children, the fact remains that this ranch would not be in operation today if my father wasn't an aggressive rancher at necessary times in his life. Sure outside influences caused hard times, but the ranch still exists today!

Working diligently to find an equilibrium that allows for my youthful risk and Dad's conservative age, I'll leave you with two examples of what we are doing:

We are rebuilding the herd into niche markets, a sign of aggressiveness.

We work with older equipment and make due without air conditioning and radios, ultimately not increasing capital debt at this time, a sign of conservativeness.

Location: Howes, SD

Business: Cow/calf operation

Develop a business plan that includes estate planning and integrated resource management for their cow/calf operation's future.

Modify the base cow herd and move into niche markets with Scott's parents.

Design a method to continue the operation Heidi and Scott build together, upon his parents' decision to retire.

"Living in dreams of yesterday, we find ourselves still dreaming of impossible future conquests." -- Charles Lindbergh

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