Keeping Cattlemen Independent: Goggins, Perrier on Securing the Future

We have to keep independent farmers and ranchers in business. We need ag youth to come back our rural communities. How high do cattle prices have to go to accomplish this? 

Joe Goggins, Vermilon Ranch, and Matt Perrier, Dalebanks Angus, discuss what it was like to scrape by through the 1980s, share the changes they have seen in more recent decades and predict the fate of the cattle industry in the future. 

This episode is straight from Angus Convention and continues a popular conversation that was first started on the main stage.

GUESTS:
Joe Goggins, with his wife, Linda, and three children, are long-time ranchers from Billings, Mont. Joe and the Goggins family are owners of the Vermilion Ranch, where they have raised registered Angus Cattle since 1964. Annually, the Goggins family breeds 2,200 Angus cows and heifers and markets approximately 1,000 bulls each year. The Vermilion Ranch, along with Joe’s own operation, J&L Livestock, develops and breeds 10,000 of the top-performing Angus heifers in the industry. Each year, they offer a large selection of commercial and registered Angus females in their spring and fall sales.  

Following in the footsteps of his father, Pat Goggins, Joe has auctioneered many top purebred sales around America and remains directly involved in the family’s livestock auction markets: Northern Livestock Video Auction, Public Auction Yards, Billings Livestock Commission in Billings, and Western Livestock Auction in Great Falls, Montana.  

Matt Perrier is part-owner and manager of Dalebanks Angus. He and his wife, Amy, have five children and reside near Eureka, Kan. 

Matt graduated from Kansas State University in 1996 and worked for eight years in various marketing and public relations positions within the beef community, including the American Angus Association from 1997 till 2004. They returned to Eureka in 2004. 

Dalebanks was settled by Matt’s ancestors in 1867, and they have raised registered Angus since 1904. They market roughly 200 bulls annually, plus raise corn, wheat, soybeans and cover-crops for livestock feed and grazing. Matt also produces a weekly podcast, Practically Ranching. 

Matt is a past president of the Beef Improvement Federation and Kansas Livestock Association.  

Related Reading:  

Competing with Quality: http://www.angusjournal.com/ArticlePDF/CAB%20Goggins%2010_13.pdf 

They Run Deep: 

https://www.angusjournal.com/ArticlePDF/1020-CAB-SCE-Dalebanks.pdf 

The Unbreakable Chain: 

http://www.angusjournal.com/articlepdf/0822-blockchain.pdf 

Don't miss news in the Angus breed. Visit www.AngusJournal.net and subscribe to the AJ Daily e-newsletter and our monthly magazine, the Angus Journal.

Transcript

Miranda Reiman (00:00:00):

Welcome to the Angus Conversation, an Angus Journal podcast. I'm your host, Miranda Reiman. Here with my cohost Mark McCully. Mark, I've heard you say a lot of times in probably the last, I don't know, maybe even six months, that one of the roles of the association is to support our members in helping their customers be profitable or really help keep independent cattlemen. I've heard those, that specific phrase a lot, help keep independent cattlemen in business. Why is that such an important role or why are you so passionate about that?

Mark McCully (00:00:32):

Well, I think some of it just has to do what my personal beliefs, I just am so passionate about. I think most of us in this cattle industry are in it because of the ability to be independent and the ability to operate in a way that is a lifestyle and there's a lot of tradition in our business. I think it's really, really important and I think in an industry where we continue to have to get more vertically coordinated, that was a term that I know I've used and heard it used many times. Sometimes that feels like that. That's an assault on the independence of even folks thinking about vertical integration. The ability to lose control or lose access. I think about access a lot, accessing genetics, accessing markets. And so I just think it's really important and I think it's an important role of the association, is to be able to help our independent breeders, our independent cattlemen, be successful, maintain that independence and yet still utilize the best technologies, have access to the best genetics that they want and stay profitable and sustainable in their businesses.

Miranda Reiman (00:01:41):

Sure. So we're joining you here from Angus Convention today, and that was one of the topics that you covered in a main stage presentation. So why don't you just tell us who was on that and kinda what you covered?

Mark McCully (00:01:52):

Yeah, we had a great panel, five really thought leaders in the Angus business and in the cattle industry that were there to share their perspectives, their ideas, their thoughts. We had Jerry Connealy, Whitman, Nebraska, the chairman of the American Angus Association Board. We had Mark Gardiner, Gardiner Angus and Ashland, Kansas also sits as the chairman of US Premium Beef. So a unique perspective that he brings to that panel. Joe Goggins, Joe with Vermilion Ranch out in Montana, but also of sits on the LMA board and very involved in the live cattle marketing on many fronts. We had Ed Greiman, Ed is a commercial cow calf operator, also a cattle feeder, but also is the general manager of Upper Iowa Beef, which is a packing plant and he's had a lot of experience on that side of things, working with other producer owned and producer run packing facilities. And then Matt Perrier from Eureka, Kansas, Dalebanks, Angus, Matt of course a real thought leader in our business and it was just a great group. We didn't agree on everything or see everything exactly the same, which I think made the dialogue on stage really, really rich.

Miranda Reiman (00:03:01):

We'll be covering more on that panel in the Angus Journal in January so you can watch for, We had some audience participation and got to hear kind of everybody's thoughts on some issues. So be sure and watch for that in the January Angus Journal. In the meantime, we've grabbed a couple of those panelists and got a conversation. We're gonna continue right here. Well welcome to the Angus conversation. We're here live at the Angus Convention here in the trade show at the Angus Media booth. Cohost today is Mark McCully. Hey Mark.

Mark McCully (00:03:29):

Good morning Miranda.

Miranda Reiman (00:03:30):

Sure. It's fun to see all the Angus breeders here and

Mark McCully (00:03:34):

A great turnout. Yeah, everyone's loving Salt Lake City.

Miranda Reiman (00:03:36):

It's been great. And today we've got two guests on the podcast. We just had a lively discussion here on a panel that we just had earlier on the main stage and brought two of those panelists down. So we have Matt Perrier from Dalebanks Angus at Eureka, Kansas. Matt got to know your family quite a bit when you were the CAB Commitment to Excellence award winners

Matt Perrier (00:03:56):

2020.

Miranda Reiman (00:03:57):

2020.

Matt Perrier (00:03:58):

That's right. Just finally got the award a couple months ago. Thanks to COVID

Mark McCully (00:04:03):

Postpone the presentation of that

Matt Perrier (00:04:05):

Twice. But yeah, it was well worth the wait

Miranda Reiman (00:04:09):

When I see those pictures of your kids and of course I followed along on social media since, I mean those kids have grown up in those two years even. They

Matt Perrier (00:04:15):

Tend to do that. Yeah,

Miranda Reiman (00:04:16):

Absolutely. So Matt and his wife Amy, have five kids, they're on an operation working in partnership with Matt's dad and mom and what else do I need to list off here? Past recent BIF president, past KLA president, and maybe I also mention of the podcast fame of the Practically Ranching podcast. So <laugh>, thank

Matt Perrier (00:04:38):

You. Yeah, this is a lot more fun when I get to just answer the question on this side and figure out how to structure it. But yeah, thanks for having me.

Mark McCully (00:04:47):

It is truly, really when I bragged about it on the stage and it was very sincere, one of the really, really good podcasts out there. And so I would encourage all our listeners to go check it out — Practically Ranching. You do a great job with it and I know I try not to ever miss it.

Matt Perrier (00:05:00):

Well thanks. Appreciate it

Miranda Reiman (00:05:02):

It. And our second guest is another one who is no stranger to the microphone. Joe Goggins here. And Joe, I think I first got to know you also as a CAB Commitment to Excellence award winner. I should have went and looked up the year, I can remember I was pregnant with a kiddo at the time, but I can't remember which one. <laugh>. Yeah, it was

Joe Goggins (00:05:19):

Your 2000 and

Miranda Reiman (00:05:21):

Maybe 12, 12 or

Joe Goggins (00:05:22):

12 I think, is that sounds, was sounds absolutely. That's great to be here.

Miranda Reiman (00:05:26):

Got to spend some time riding around in the pasture with you and of course family operation, you guys, you have a stake in Vermilion, Angus Ranch and a legacy there in Montana. A lot of experience with auction markets, both with Northern and then of course your sale barns there or auction markets. Wait a second, your dad corrected me and I still

Joe Goggins (00:05:46):

Didn't get it right. We don't call them sale barns up there. My dad always called 'em auction markets. He said This don't look like a barn <laugh>

Matt Perrier (00:05:53):

The line between auction markets, sale barn and stockyards. You go to Southeast, you some geography things,

Joe Goggins (00:05:53):

Matt Perrier (00:05:59):

And don't mess it up. They will correct you. Yeah,

Joe Goggins (00:06:02):

Yeah,

Miranda Reiman (00:06:02):

Absolutely. So a lot of experience we have here. So I'm excited to dig into that as we talk about the future of the beef business. Yeah,

Mark McCully (00:06:11):

And we had a panel, these two guys, I mean think one of the set things I talked about at we come together on an event like this and the convention or it, it's about sometimes sharing some perspectives, broadening our perspectives, trying to hear from different people with maybe a different angle on some of these topics. And so we really kind of looked out on the horizon of the beef industry, we know there's a lot of optimism out there in terms of the market, but there's also some challenges on the horizon. And so we really just had some different perspectives and shared some different ideas and we wanted to just continue that here for our listeners because it was a really, really rich conversation and guys, it really brought some wonderful perspective to some things to think about, some things to be excited about and it was fantastic.

Miranda Reiman (00:07:04):

So let's just start at that, where we're at today. What do you think on the current, what are your, I guess, feelings on the current state of the beef industry and kind of predictions for the future

Matt Perrier (00:07:16):

<laugh>? I guess I'll start Joe cuz you're gonna have a lot better handle with as wide of a swath as you kind of touch in the beef industry. But I think overall the beef industry is in a healthy spot. We talked a little bit about history on that panel and I remember the eighties, I remember the early days of Certified Angus Beef and when the reason CAB was so successful quite frankly was because we had so little high quality protein out there and there weren't great economic signals coming from the consumer back. And so fast forward to today, even though we've got some challenges within the beef industry structure and making sure that we get the margin and get the dollars passed through to all the segments to keep cow calf producers in business for instance, even though there are some challenges there, the pie has grown so much, the beef industry, consumer demand and things that has allowed the beef industry to do in terms of growth and new product development and capital into that industry. We're in a healthy spot. We have our challenges and obviously inputs and costs and land availability and labor availability, all those things are gonna continue to be challenging. But I think we're in a healthy spot, we just need to not rest on our laurels and we need to find ways that we can better spread that margin across the entire industry.

Miranda Reiman (00:08:41):

Yeah,

Joe Goggins (00:08:43):

And I guess I said on the stage as well, I think I'm very, very bullish on beef. I think as far as, there's no question we here in the United States raise the highest quality, safest product there is in the world and the world is gonna come here and get it. And I do think we've got some margin problems. And I think somehow some way if we're gonna continue to have rural America thrive, we have to some way somehow keep these cow herds that are from a hundred to 300, 400 head, I mean, for those of us in the registered Angus business. Those are the people we thrive on. Those are the people we sell our bulls to. And it's not necessarily these people that have 4, 5, 6, 7,000 cows.

(00:09:42):

I think the ones we really need to address the ones we really need to figure out to get some margin to are these smaller hundred head to 3, 4, 500 head. I don't know where the sweet spot is, but it's there somewhere. And I just look at our auction businesses in Montana 20 years ago, I'd say half the feeder cattle that came through were black, maybe half the cows were black. Now you look at all the cattle we sell on these videos through the northern region that we represent and all of the cow herds and weigh up cows and bulls that come through these places in our part of the world, I'd say 90, 95% of them now are black. And I give a big shout out to CAB for that. I mean lots of people question are we seeing a premium from CAB? Well, we have. it has put so much demand on these Angus feeder cattle and frankly Angus weigh up cows and bulls. I mean you see all these packers putting all these cows on feed, getting their, so they've got some kill around them and anymore to the point where they only put these black cows on feed cuz they fit these Angus beef ground beef programs and so forth. And no, it's a great breed of cattle. It's a great association and I honestly think for those of us that weather the storm, our best days are ahead of us.

Mark McCully (00:11:12):

To that point, Joe, we asked and we were able to pull the audience a little bit in our session there and we asked them kind of their general thoughts around profitability. We asked that question of over the next two to three years, what's their view on profitability? Is it gonna be about the same increase, slightly increased, significantly decreased, slightly decreased significantly? And I think the general consensus in the room was pretty bullish around profitability that it would increase slightly or maybe significantly. How did you guys answer that question or what's your outlook on just profitability of the commercial producer?

Matt Perrier (00:11:46):

Well, I think it's gonna increase and I think that it's going to, and we talk about averages a lot of times, but I think even on the average cow calf producer, I think we're gonna see increased profitability. We're definitely gonna see increased revenue. The question is how much increase in expenses and costs are we gonna see over the next few years? And that's what equals profitability. But I also want to step away from this average and you showed those bars of the average profitability of every segment within the beef industry from 1980 to 2000, and then from 2000 to now, those are averages. The folks listening to this podcast, the folks that are walking the halls, this Angus convention, they've never been satisfied with average. And I think we need to make sure that those producers who want to find ways to innovate, who want to do a better job with their genetics, with their management, with their marketing, with their sales and merchandising and all these things we need make sure that we can figure out ways that those folks willing to do that have an opportunity to capitalize on better than average profits.

(00:12:55):

And that's where sometimes we still harken back to that old commodity mindset in the beef industry and that everything's worth the same. The fact of the matter is thanks to CAB, thanks to good marketing and merchandising, thanks to all these different things. Every steak, every roast, every pound of ground beef is not necessarily the same today. And we need to be able to differentiate that product in those cattle I think, and for those who are willing to, I think Joe uses the term fireworks all the time and he's right. There are fireworks out there that can be, we're gonna see in here in the next few years I make in the beef industry.

Miranda Reiman (00:13:36):

Joe, one thing that you said that I found interesting because we think we're in this time where it's doing great, you know, said a six weight animal there, $2, what was it that was gonna motivate young people to come back?

Joe Goggins (00:13:52):

And I was just thinking as Matt was making that point on averages and <affirmative>, none of us really liked the average. And sure, these ranch outfits, I mean I can go back through our tax records on our ranch for the last 30, 40, 50 years and never does it make much money, <laugh>. I mean it just doesn't, and there's not a lot of margin. There never has been a lot of margin. And obviously obviously average isn't gonna bring these young people into this thing. I mean they've got their friends. It's an issue that we're really battling with within our own family right now is keeping these young people engaged and wanting to be a part of production agriculture. And it's because of margin. It's not enough margin in comparison to what their friends are getting. I mean, they got buddies that are making a lot of money and they get the weekends off and they can go to the Lake and they can enjoy life a little.

(00:14:53):

And we're in a situation now where this next generation coming up, they're not gonna do it just for the way of life we did, our parents did, our grandparents did. But for some reason the world has changed. This next generation they want margin and I don't blame 'em. And so what is the margin? Obviously we're in a situation again where five and a half weight calf at 2 10, 20, a 600 pound steer at two bucks is obviously still not pulling these guys off the lake. And I don't know if it's $3, I don't know if it's three 50, but they're somehow some way we've gotta create margin at that grassroots level. I didn't touch upon it much on the stage, but from an auction market standpoint, I sit on the board of the Livestock Market Association. We represent 800 and some member markets across the United States. And in our mind we represent a lot of producers, I mean producers that don't belong to the Angus association, producers that don't belong to any industry association and we're kind of their voice.

(00:16:09):

And I think you could poll 50 market owners across the United States. And I think their number one concern right now without question is we have got to do something to incentivize these people with two to three, to four to 500 cows to stay in this business <affirmative>, to leave their land in production and agriculture. And because we really feel, when you look at, especially the western half of the United States and the northern tier, there's so much of this land that we're losing out of production agriculture to things like American prairie reserve, fish, wildlife and park conservation, easement type situations, urban development, recreation, these big boys coming in and they're taking 'em out of production and they're hunting on it or for recreation and we're losing these places and we're losing cow numbers and we're losing producers. And from an auction market standpoint, and really from a purebred Angus breeder standpoint, those are the people that are our bread and butter <affirmative>.

(00:17:13):

That's where we make our living. And if we don't get some young people in that realm to come back into this thing and want to thrive, I really think we'll see not maybe the true sense of vertical integration. But if you don't think some of this can't happen, just look at what happened in the pork industry 20 years ago, <affirmative>, where out of the 800 and some member markets that we had here 20 years ago, 60% of those markets would've sold hogs. Yeah. Do you know how many of them markets today sell hogs? Two. Two in the United States. And that's where we come from as a auction market owner. And for that matter, a purebred Angus breeder is I don't want to get this industry in a situation where the big continue to get bigger and then they start telling us where they're gonna go buy their bulls.

(00:18:11):

And you don't have to bring your cattle into an auction market in a true price discovery type situation. We'll just we'll tell you at they're, we're gonna tell you where to get 'em. We're gonna tell you when to calve, we're gonna tell you what bulls to use. And that from my standpoint is very concerning and I think that's why I keep bringing up this idea of margin because margin, I think it's the one thing we as an industry, regardless of who we're affiliated with, what group we're affiliated with, I think it's one thing if we can have some conversations like this come up with some solutions that we can unify around and create some margin. And I'm not saying an entitlement that we just have to have it, but an incentive, some kind of a model to where it will incentivize somebody to want to do this.

Mark McCully (00:19:02):

Joe, when you think about margin, I mean obviously there's two ways to create it. You increase the revenue or you decrease the cost. Is it fair to assume not to... Well I'm asking you in question. I'm giving my opinion at the same time, so I shouldn't do that. In my opinion. How about I'd do it this way. In my opinion, margin's gonna come from growing the top side of this. I don't know, there's a lot more cost to drive out of our system, I'm sure there's opportunities. Would you agree with that or not? Where does the margin come from it? Is it all around growing the revenue? Matt, I'm curious what you think there, too

Joe Goggins (00:19:36):

I think if you look at what this industry, how we've tried to get margin the last 70 years, I mean really to most of us, the most obvious spot where there is the most consistent margin is at that packer level. And so we've for 70 years tried to go get a bigger piece of the pie of that. And in some sense we have got some of it, but you talk to these producers, they obviously don't think they've got enough and I'm not sure we'll ever get it there. So the only other place I can see where you can get some true margins, some true, true assistance is through either some sort of an incentive to, something we've been kind of throwing around is the idea of if you hand your land down to the next generation and that generation decides to leave that land in food production for 15 more years, kind of a conservation easement model, but not forever, then they would be exempt from any death or inheritance tax.

(00:20:48):

And that would give a lot of these young people that inherit some, I mean some of the smaller producers that don't have a big enough estate to matter probably doesn't matter much to 'em, but there's a lot of these families that got some wherewithal that got some land around 'em that are worth something. It's about the only wealth they have is their land <affirmative>. And I know in our case, our own family's case, we'd be 16 million ahead right now, <laugh> instead of having to buy these ranches again. And that's one of the problems why a lot of these young people want nothing to do with this. And I think ideas such as that creates a lot of margin, creates some incentive to want to do this. And I don't know if it, it's through tax credits or if it's through tax exemptions or something, but something like that, a model like that that would really create some margin for these young people to want to. And for those of us that have maybe 20, 30 years left in our career that want to continue to do this because margin is where it is <affirmative>. Yeah.

Matt Perrier (00:21:53):

The challenging thing with, as we talk about how to build that in, and I've always felt like from a margin standpoint, everybody in the beef industry is a margin operator except the cow calf producer. And he or she gets what's left over quite often, which in times of tight supplies when we've got the leverage, it's a great thing to get everything that's left over when everybody else takes their piece out. In times that we've seen the last four or five years, it's not so great in terms of taking what's left. But I'm also a guy that gets really, really nervous as we talk about asking Uncle Sam to incentivize production efficiencies or take the efficiencies out of it. And I think nearly anybody that's listened to this podcast, and I know you and I would agree that capitalism works when the market is allowed to send those signals freely.

(00:22:50):

Now are there opportunities, I mean obviously we talk about ag exemptions on property tax and sales tax and things like this. It, I'm kind of speaking out of both sides of the mouth here. When I say we don't want tax incentives, we don't want Uncle Sam coming into our business, but don't take away my ag exemptions <laugh>. So maybe there are some things to talk through there. But it does make me nervous because Dr. Tom Field one time said he went through every industry that has the government who has intervened in some way and he can't find one time the postal service, ma bell, any of these things that the government has stepped in, and made things better than they were prior to that. And that's what makes me nervous about, and I agree with you that bread and butter hundred to 400 cow operator is my family's bread and butter too, selling genetics.

(00:23:54):

It is for the American Angus Association, what I would call fairly small commercial cow herds, at least maybe registered too that are probably, let's be honest, funded by something else, a job in town. It's not a full-time gig. Those folks are probably gonna stay the course even though it's less profitable in a lot of years, they're not gonna probably completely sell out. The bigs are getting bigger. And I think for the next couple years we're gonna see consolidation of the cow calf at the large cow calf thousand and up cow calf segment like we've never seen, The ones I worry about is exactly what Joe said. The 150 to 400 cow, 500 cow operators that are doing business on Main Street in every rural community, buying feed, buying mineral, buying animal health supplies, buying bulls from Vermilion or Dalebanks or wherever. Those are the ones that scare me.

(00:24:52):

I don't though I'm not quite, and we've got two more days that Joe can convince me maybe, but I'm not quite convinced that Uncle Sam can keep those folks in business. I think we as an industry, my opinion, have to find ways that those folks can be incentivized through the market to stay in business and stay hooked. But I see it, I mean Joe, you talk about the young people not coming into this segment, you know what scares me the most? I've got lots of folks around us and part of it may be drought induced, Part of it may be after the winter of 2020, 2021, maybe it was, Yeah, both. There's a lot of folks who have run cows for 20 and 30 years of their life. They're not old, they're not 80 years old, they're getting outta cows. They've seen two or three or four cycles weathered them and they say, You know what, it's not worth it anymore.

(00:25:46):

And rarely do they say it's because of margin or lack of profit. They just say, I'm tired of working that hard. I can run a 90 day yearling on these acres, know that I make 20 or 30 or this spring, maybe even 56 bucks an acre in the Flint Hills of Kansas and have 'em there for three months and do something else for the other nine. That's the challenging thing is almost the, I hate to say it this way, but the work ethic of the American populace is not willing to bust their butt 52 weeks of the year. And that's what it takes to run counts.

Joe Goggins (00:26:26):

It is, I think you nailed it on that these young people, I mean a lot of these guys that are going out right now that we're dispersing and we're dispersing a lot of cows in the western half of the United States right now and they're mostly 60, 70 year old people and they, they're sick of working that hard and the kids aren't coming behind because they've seen how tough it is. They, they've seen how their dad and mom have had to struggle and figure out a way to get it alone and figure out a way to do this. And they're not gonna struggle that hard. And I have laid in bed at night many, many times now trying to come up with some way that we can incentivize people to want to be involved, especially young people, that that's the future. And if we don't, I mean look at our best employees.

(00:27:21):

I look at our best yearling deals that we partner with on grass and this and that. They're all incentives <affirmative>. I mean they're not entitled to nothing. If they do a bad job, they're not gonna get it. But if you incentivize somebody, especially those of us within American agriculture and give them an incentive to go out and do a good job and really produce more and get after it, we will. We have proven that. And I don't know what the answer is, I really don't. But I do know one thing. We as an industry cannot continue to have all of this throwing darts at each other and fighting and no unification. And we're not gonna unify around the idea of fed cattle marketing and how we price fed cattle and how we're not gonna unify around country of origin labeling. We're not gonna unify around beef checkoff.

(00:28:14):

We are naive to think we ever will. There's just too much diversity. But somehow we had better figure out something to unify around to create some margin for those of us that for these young people, I don't know any other way, when you sit there on that auction block at these markets every day and watch these people come in and they're not young people and there's not young people buying them. And you look at the farming communities, I don't care what part of rural America, what I don't care if you go to Kansas or if you go to Montana or you go to Florida, these rural communities are drying up. It takes two, three towns to make a basketball team and somehow we gotta get it to where rural America's thriving, again rural Main Street America is. And obviously none of us really know the answer to that, but we better get to working on it and unify around it.

Matt Perrier (00:29:16):

So Joe, here's the one thing that I have seen unity amongst producers, amongst producer groups or whatever it may be. And I don't know how you quantify this, I don't know how you monetize this, but what's the most valuable product that we produce on America's farms and ranches? It's those same youth.

(00:29:38):

I was gonna say we've produced a lot of them. <laugh>.

(00:29:39):

Yeah. Some of us around this table, you can tell we all go to the same church on Sundays. <laugh> produced a bunch of them and it's those kids that are more, they're worth more than any pound of CAB Prime or any registered.

Joe Goggins (00:29:56):

They really are

Matt Perrier (00:29:57):

Bred heifer. And yet here we are trying to figure out how to bring those young people back and trying to incentivize enough margin, enough profitability into, and we're exporting that product our kids to every place across the world really. And now more than ever, any corporation that hears that this son or daughter, this young man or woman was in 4-H and FFA grew up in the National Junior Angus Association, whatever, it doesn't matter what the resumes commodity is, it doesn't matter what their GPA was, they're in and they rocket up that corporate ladder. They can't get enough of them. So there's the holy grail. How do we sell our kids <laugh>? How do we monetize what it is that work ethic, that hard scrabble life that growing up through the 1980s and the last few years for a lot of us, yes. That perseverance, that understanding of markets and of capitalism and long hours and everything else. How do we make money off of that and knowing that we can't bring every one of them back, especially those that have got five or six or seven kids.

Joe Goggins (00:31:13):

Yeah.

Matt Perrier (00:31:14):

How do we make the farms and ranches and the rural communities not disappear because that's the product that disappears. That's what America probably needs even more than good, high quality CAB is the youth that we send to them and supply

Joe Goggins (00:31:28):

Absolutely. I think you come to these conventions and you get on these boards and we all do all of this and we don't do it for, I mean I've told my wife I'm not doing this for her and I, we could sell out tomorrow and we could be live happily ever after. I mean it would be no problem, but we're doing this for these kids. You bet. Yeah. And that's the biggest reason I'm in the fight and I think it's a worthy fight, but I think I just sold,

Matt Perrier (00:32:05):

There still has to be some money, there has to be profit

Joe Goggins (00:32:07):

There to be some margin. It's just they're not gonna do it without it.

Mark McCully (00:32:11):

I talked about it this morning a little from the main stage of, I think in our youth programs we spend a tremendous amount of time educating and equipping these young folks to be leaders. And I think the one thing at times we fall a little short on is making sure they're excited and they can see themselves in this industry. I think we've almost been a little too comfortable with, man, these are fantastic kids and they're gonna go off and do great things in other industries. We need to make sure that they see an opportunity, that there is an opportunity and they see that opportunity and see where they fit in, come back to on these farms and ranches or take over. I mean I talked to some folks that don't have a next generation to hand it off to but are looking for a transition plan cuz they're passionate about making sure that their legacy and what they've done their cow herd, their land lives on in the same way that they've been able to do it. So I think it's why I get excited about our foundation. I say excited all the time, Miranda and she teases me, gives me hard time, says Mark,

Miranda Reiman (00:33:06):

He's always excited, but I am

Matt Perrier (00:33:08):

We wouldn't watch you if you weren't.

Miranda Reiman (00:33:10):

Yeah, right. I tell you what, to be fair, Mark Gardiner says optimism quite a bit too. That's right. He'll call him out on that. And I think it's

Mark McCully (00:33:16):

Fantastic that we're there and I think having these young people equipped and excited to see where they can go fit in. And one of the things, I think it was on your podcast, Matt, you were talking about maybe I listen to a lot of podcasts, so sometimes these things blur together a little on me. But this idea that we have more and more opportunities for remote work, There was a time when if you wanted the good jobs, you had to go to the town to go to the cities. That's not the case anymore. You can essentially about work from wherever and what the opportunity is that for our rural communities, as we've been able to have folks that can go and live and maybe not be able to fully sustain their family with the cow herd, but they can have that good job but then also be able to be back in these rural communities. I get sometimes there's some headaches that come with all of this remote work and all of that, but I think there's maybe a silver lining in that as it relates to our rural communities. I dunno if you guys have seen that or feel that.

Matt Perrier (00:34:15):

Yeah, I I've seen it as my old friend Jim Shirley used to say, I feel strongly both ways <laugh> on that topic because you're right, the limitation in a lot of these rural communities is internet bandwidth, honestly. Yeah. Yes. And we simply don't have it in most of rural America to be able to do business at the speed, especially when you get talking about video conferencing and graphic design and sending things like that. So there are some limitations. The other limitation is yes, it gives you an opportunity to stay in rural America or bring a spouse back so that one can work the ranch and one can have the town job from their home office. The other thing it does is when nobody wants to live in California or wherever the case may be, they come and buy the little ranchito up and that goes drive

Mark McCully (00:35:11):

Drive some land values up

Matt Perrier (00:35:11):

And out of agriculture and it increases your inputs and your land values and you know, name it. So it's a double edged sword. I think we have to be careful, again, the unintended consequences of these rural development programs sometimes bring some things in that we didn't see coming. But you're right, especially when we talk about having, having both husband and wife working, sometimes the limitation is we can't come back to the ranch because my husband or my wife has a really, really good job and he or she has to be in suburban Kansas City or in Billings or wherever else and we can't be in Mile City or in Eureka, Kansas, wherever the case may be when the better the cash flow is coming from my husband or my wife. Yeah.

Miranda Reiman (00:36:03):

That's the thing that I wonder though a little bit is does it kind of subsidize in a bad way but we want to make a living from this ranch and now we're saying, but we can't cuz the wife's got the job that's gonna pay for their husband's got the job. We want to make sure that the ranch is profitable enough stand on its own right. It's great if you want that extra income. But

Joe Goggins (00:36:25):

Yeah, we've got several employees that are just what you were, I mean the husband works on the ranch or the farm and the wife's got a rather lucrative deal at home and it's good. I mean our gals at the offices and this and that through the auctions and our paper and this and that, we've brought 'em all back in <affirmative> to me, I just think there's a real positive to having human interaction. I mean eye to eye, it's different than a zoom call. You just don't feel things over that zoom that you do one on one in a lot of situations. And so for us, we, we've kind of brought 'em back in, but it's an ever changing world. And I think looking at the people that have really excelled, I mean you look at people that were my folks' age and my grandparents, the ones in that generation that really excelled, adapted to change.

(00:37:28):

I mean they went from no running water to seeing a guy walk on the moon to electricity, to computers, to, I mean these people adapted to change. And I think we're kind of in a situation now with people within our own generation. I think it's something that we're struggling with. Some of us don't want to change <laugh>, some of us don't wanna do things that we have been taught or are just so wrong and maybe it's right. And I think there's some things that if we're gonna continue to move forward and continue to get these young people especially involved in this thing, we're we're gonna have to change. And because these young people have, and I think that's something that we have to keep in mind.

Matt Perrier (00:38:12):

There's a quote that I heard a couple months ago that comfort and growth can't coexist you other words, if things are good and we're ginning along and everybody's making a little money, rarely do you have folks step out and do things like create the Certified Angus Beef Program in 1978 or adopt AHIR and start making EPDs so we can make these bills more predictable and worth more. Those don't happen when you're uber successful. Comfort and growth, they don't usually happen at the same time. It's nice to have a little sweet spot where you're still growing and also comfortable.

Miranda Reiman (00:38:50):

Not that uncomfortable, totally painful,

Matt Perrier (00:38:52):

But that pressure, that economic pressure incentivizes or encourages us to do some new things and be innovative and create some deals like video markets or whatever the case may be, <affirmative> that probably make the industry healthier in the long run. It's just tough while it's going. Yeah,

Miranda Reiman (00:39:11):

We were just out at Connealy's Place doing his president's perspective story for the Angus Journal and he talked a lot about the eighties. So as you guys were up there talking about it, I think his quote was something about, I'm kind of thankful that we had to go through that because I think it really sharpened us up for what lay ahead. So I think you're absolutely right. I think you're your thing was like the complacent, you get complacent if you're That's

Matt Perrier (00:39:33):

Right. Yeah. If it's easy, I'll time. And I remember the eighties, I was a kid, I was in grade school and junior high, but I wanted nothing to do with production ag. I was one of those rural kids. I was gonna be an engineer, I was gonna be anything but a rancher. And then I got to Kansas State and

Miranda Reiman (00:39:50):

Engineering wasn't so fun.

Matt Perrier (00:39:52):

Animal science was a lot easier than engineering. And the people spoke and acted and talked like me. And so that's where I gravitated. But even coming out of a four year degree, I still wasn't

Miranda Reiman (00:40:02):

You went to Pennsylvania, right?

Matt Perrier (00:40:04):

I held a lot of jobs because I was coming out in 1996. We see all these charts with beef demand and profitability and 1996 is the bottom and I hope it's forever the bottom <affirmative>. But that's when I entered the market or the workplace and yeah, I still wasn't sure if I wanted to be in the cattle business Today. We do, there are some incentives. There are more, I think than we saw in the eighties and nineties for young people. And that's an interesting deal. There are not, I'm 48, 9 years old, <laugh>, there are not very many 48 9 year olds. There are quite a few 25 to 30 somethings and then there are a lot of 70 and 80 year olds. But there's a little spot there. If you were cutting your teeth and deciding what you wanted to be when you grew up in 1983 or four, there weren't very many of us that wanted to come back and do what mom and dad. I mean we saw the struggles and we saw the bankruptcy auctions and we saw everything else neighbor, after neighbor having to sell out and the bank foreclosed on it. It wasn't a fun time. I, I'm like, Jerry, I do not, It probably was good to grow up during that time and you learned a lot of maybe what not to do and the pitfalls of inflation and 19% interest rates and you name it.

(00:41:23):

But I don't wanna go do it again. Yeah. I'd just as soon let my kids learn those lessons a little bit more subtly than I did. Yeah,

Miranda Reiman (00:41:23):

Matt Perrier (00:41:23):

Joe Goggins (00:41:32):

I thought it was real interesting in your remarks at the very beginning today, Mark, where you, some of the struggles that we're having today and then you put up the clip of 1940 something or 70 something, whatever it was on the same kind of struggles. I mean you look back at a lot of the editorials that my father wrote over the years back when starting in the fifties till now, we're really discussing a lot of the same things you are. We've a long way. I mean we really are

Miranda Reiman (00:41:32):

Joe Goggins (00:42:04):

Kind of puts you in perspective that it's not like this, we're the lone ranger in this thing. But I was going back through some of his, basically when he was in the picket case against Tyson and he was one of the six main and went back through his deposition and if he wouldn't have wrote it, I would've never believed it because basically just long story short, I mean they were on packer concentration and I mean he really took a run at it and he, their defense it says right here, you could tell he was studying for going to this deposition and trial and their defense, it's not against the law to make money in America. It's capitalism, it's free enterprise at work. And he puts over here in his handwritten writing, which if he wouldn't have wrote it, I wouldn't have believed it because anybody that knew my father would've knew how conservative <affirmative>, how he was totally against anything with the government becoming involved in anything.

(00:43:10):

But his defense, unregulated capitalism destroys competition. And he says nowhere in the Bill of Rights, nowhere in the constitution are the words competition. Are the words or are the words nowhere in those two documents are the words, capitalism. Are the words free enterprise. Many times through those documents, the words fairness, the words competition are brought up. And I think we have to keep some of that in mind. I mean if you talk about a guy that changed now he changed. And I think we as an industry have got to step out and change if we're gonna get these young people to really thrive and want to do this. Yeah,

Miranda Reiman (00:44:02):

Matt, you talked about, I guess it was the two ends of the spectrum, maybe from vertical integration too. And maybe there's a sweet spot on that

Matt Perrier (00:44:14):

And I don't know where it is. And I understand exactly what the challenges that we have when we have a very small number of companies doing 80% of the business in the packing and processing segments and things like that. And I understand the fear of going the way of the hog industry, the poultry industry, and being completely vertically integrated. I like to say the irony of the situation, in my opinion is that cattlemen have always been fiercely independent. And that's one thing that makes us so unique. That's why they have these westerns. That's why Yellowstone is on television. I mean it's this romantic tie to the old West and that's valuable. Sometimes it may cause us to do some things that aren't very business minded. But the irony to me is that if we wanna maintain any segment, any portion of that independence and not become vertically integrated, I think we have to be a bit more vertically coordinated and share information, data, not try to steal the profit from the person above or below us in the industry chain.

(00:45:34):

And you know, looked at that cattlefax graph that you had on there that showed the industry profitability by segment from 1980 to 2000, 2000 to 2020. There wasn't very much back there when we were purely a commodity and we were splitting, what'd you say, $32 on average amongst all segments of the beef industry per carcass, per head. And from 2000 to today, granted the last six or eight years have been largely in the packer processor's favor in terms of that profitability per segment. But we've split up 302 or $3, $4 at least the pie is grown. To me, the way that we hopefully equitably and adequately spread that margin out across all four or five segments of the industry is with information and data. And more than just hide color and weight on these cattle more than just boys, they've had all their shots.

(00:46:33):

These through retained ownership through some cooperative agreements. We're starting to see some of that data go from the consumer. And actually the data would be from the packer processor to the feed yard, feed yard onto the stocker and to the cow calf man. But I don't think it's happening enough. And I don't think, without that data, I don't think we can truly pass that value up and down through the chain. And if we don't Walmart, just use them, cuz they're the big ones. They have more incentive right now. They don't want to own cows. There's too much, they know how much it costs. There's not enough margin in it. They, they're all about margin. But if we don't give them what they want, if we don't produce enough of the right size, the right grade, the right consumer focused beef, they'll get more and more involved. I think we're at a very pivotal point that if we want that margin in each segment, we've got to cough up more than just an animal that you have nothing else but his or her hide color and weight. I think data, I think information that is sharable amongst all those segments may be the only way we keep from being hammered and told how to produce and what genetics to buy and how to feed.

Joe Goggins (00:47:57):

Yeah, I kind of agree with that. In the same sense, typically the only way that these producers have ever been able to get much data back from these packers is they gotta retain ownership. And you're talking to an auction market guy. Yeah, <laugh> not a fan of it. Understand, I'm a true believer that everybody should feed some of their cattle every so often so they know where they're at. I think it's, but the problem, especially with these people that have from a hundred to four, 500 cows is they just are not in a position to where they can do retained ownership because especially if that's all they've got, I mean time a year, there's there, there's one time. One thing a banker understands and it's the only thing he understands is cash flow <affirmative>. And if you retain ownership, there's no cash flow. And so it's a great idea, but it's not sustainable for these people because they don't have the margin to do it. I hate to keep bringing it up, but the thing that we all come back to is margin these guys on these grass ranches running these cows and if that's all they have, by the time they buy a 60, $70,000 swather, I mean baler and a 200 and some thousand dollars swather and have all these other input costs coming at 'em as well, there's not much left in the gas tank.

Matt Perrier (00:49:32):

So what if we we're able to put some kind of identification, let's just use RFID and this has been talked about, heck, I talked about last week on our podcast. If any size of producer identifies that calf and when he drops a trailer load off at PAYS, says these are the registration numbers, the bulls, or this is my AngusLink verification of genetics. This is the actual shots. And the times that these calves have had, I mean there's plenty of these quote unquote source verified and traceable programs. How much value is there in that certificate and in that verification to you or to any other yearling stocker operator or feed yard that buys those calves and carries 'em on. And if that goes with that set of steers, even if there were just 15 head, and the right people have access to that, does that not keep us from having to retain ownership all the way through to still find out how those cattle did?

Joe Goggins (00:50:40):

That's what we as auction market owners have talked a lot about, is how do we add value to these people that don't have a full load Exactly. That don't have this or that. Yeah. And because right now, I'd say 15 years ago, those real fancy black feeder cattle, especially black Angus feeder cattle, they brought a true premium. I mean they brought a premium above the commodity cattle. Now the bulk of these cattle that we sell feeder cattle, which are high percentage straight Angus across the whole United States, we've turned the nation black, they're the baseline, right. There's no more real premium. I mean they forced us to get into these value added programs, the naturals, the NHTCs, the GAPs, those kind of deals that that's where they have forced these really good producers with these really black, good black calves. They forced them into these value added deals, which takes a lot of us that background calves out of the equation because we've tried the natural thing and they die. We can't make it work. So I think looking into the future, I really think there's some validity in what you just said as far as these producers at every level from big to small, we'll put the tags in, they'll do the extra paperwork, they, they're used to being audited. They're not afraid of it, but they're not gonna do it for nothing.

Matt Perrier (00:52:16):

That's right.

Joe Goggins (00:52:17):

And

Matt Perrier (00:52:17):

There has to be money

Joe Goggins (00:52:18):

So how do you make them worth something? To me, you come up with some kind of a premium program, and I know Mark and I have talked a lot about this and I know the struggles that are involved with it, but I really hope the American Angus Association doesn't give up on the idea of adding some value at that from a pasture to plate deal to a, that follows the story. A Certified Angus Beef. I really, really think there's some validity in that and maybe that's where the margin comes from.

Matt Perrier (00:52:53):

Yeah, I think it has to be, that money has to be associated with more than just what you see in the ring on sale day. I think that we owe it to the whole beef industry chain because there's more than those. I mean, like you said, let's take natural for instance, those premiums sound all well and good until you start running the numbers and see just what happens with those cattle in terms of mortality, morbidity, and if we're talking NHTC, lost days, increased days on feed or lost gain and ability there performance, you know, talk about these bigger producers being forced into these programs. I would take the opposite perspective. I remember when I was at the Angus Association, I used to use a quote that I think Hormel Foods probably used on pork side, but let's just use the quote and they used to say, what's premium today is commodity tomorrow. Black hide cattle,

(00:53:53):

used to be premium, right? Correct. Commodity. Yeah, there's 85, 90 whatever percentage depending on the region that are black hided, whether they were Angus-sired or another black hide. But yes. But today I think the premium or maybe the lack of discounts, which may be what happens, but the premium I think is gonna be more on the verification of those Angus genetics, the verification of that herd health program and of that management protocol. And I think that's, again, going back to this whole vertical integration or coordination, I think that's what keeps us from going 80 or 90% owned, retained ownership all the way through the packing plant is saying, You know what, I'm gonna stand behind these cattle, whether it's 15 or 1500 and tell you, this is what I did to him. This is everything I know about 'em and this is why they're worth more.

Joe Goggins (00:54:51):

Even if it was from a region, I'm not sure. I think a lot of these producers would feel more comfortable with all of that meeting the meeting the specs, but saying they're from a region instead of they come from this ranch, then there's some liability things and I think they would question that. But your word vertical coordination, I've never heard that. And I like it because I think it's only, I think it's probably the only way we battle vertical integration. Absolutely. And if there's one thing I've got out of this whole trip, it's that I appreciate you bringing that up because it's never had anybody bring something like that up that and it makes sense. But to do that, the idea of losing our way of price discovery, of losing, if we ever lose this country, if this industry ever loses our true form of price discovery.

(00:55:47):

I mean the auctions I, if we lose that we're in trouble. I mean then we become price takers right now, at least at that auction method. Why do you think the video sales are so successful? Is there's some competition? I mean, as feeders, I mean we got, we run a lot of cows, but we feed a lot of cattle and we're all fighting over these feeder cattle at the most competitive stage in their life. I mean, we are fighting for 'em. Even the corporates, they're all after 'em and then they get up, there's a eight weight. We used to sell thousands of these 850 pound steers on our diamond ring sale. Really the worst part of the whole industry right now, the least profitable part of this whole industry right now is the backgrounder. You make these 850 pound steers, 900 pound steers, and they're no different in selling fat cattle.

(00:56:37):

You got two or three corporates to sell to, period. And used to be you'd have 30, 40 farmers sitting there wanting to buy 'em. Now dipping down, they're forcing us to buy these light cattle and these kind of plainer cattle and upgrade and something that we can sell to a rancher. I mean, my wife and I used to run thousands of yearlings when we got married and it just got to the point where when they were ready, we had six, seven guys to sell 'em to. Now we we're into a background or a bred heifer deal and a cow deal. When we go get ready to sell them, we have thousands of people to sell 'em to. I like my odds there a lot better. And I think we as an industry have got to keep some competition in this thing. We have got to keep some price discovery and some true, true. I call that true capitalism I call that's how America's built and I really think we're really on the right track. And I really like your idea of vertical coordination. I think that's something I'm gonna talk to you some more about.

Matt Perrier (00:57:41):

Well, it still takes a little bit of the independence away because you know, put that RFID in their ear and probably are gonna have to use some scary terms like blockchain and some of these technologies that say who gets to see that information and who doesn't. Which I hope gets to your hesitation on individual producers. <affirmative>, I think there's some value in regions from the consumer standpoint, but if I'm a feed yard and I'm buying six loads of calves outta PAYS and five of those loads sail right through and never treat a one. And there's one load that I doctor, 30% of them, I wanna know whose calves were those because they all came outta the same yard. They all are the same sale barn or market <laugh>. They all came at the same day. There was something about those, and maybe it's just, I go back to the producer that owned the ones that got sick and say, Hey, let's figure this out for next year, year and you we'll make you and me money. So that's where I think the value is there to take some of the independence.

Joe Goggins (00:58:48):

It's probably a little different in our part of the world versus the southeast and this where they sell 'em singles, but we sell pretty big bunches. And one thing we do keep very, very close track of, and I mean, we'll background 50,000 calves a year and we keep very close track of health. And there's sure some, I really appreciated your comments this afternoon or morning on the stage on body condition score. Yeah. And mineral. And there's a lot, There's so much that goes into health on these cattle and at least in our own. And I think most of us that are left feeding these cattle, we dang sure keep track of the ones that didn't work last time and you kind of bid accordingly next time. But I, well remember back to these, putting the tags in and doing all this, the only way these producers are gonna do it is if they get a premium.

(00:59:45):

One of the first years we had in Northern, we had a lot of cattle, a hundred some thousand we're selling them. And no, it was right back when Japan was requiring the eID tag and these producers, no way, I'm not putting them in. It costs $2 and 50 cents a head. I'm not doing 'em well. Pretty soon we start getting a four, five, $6 premium, they start raising their hand. We'll put those tags in <laugh>. Now, don't think these producers don't understand premiums and they'll do whatever it takes to get 'em, and it's just that some of 'em are running out ideas. Some of 'em can't do the natural thing. Some of them can't do the NHTC or the GAP thing, but they could do a premium Angus thing. And I really think there's some hope there. Just figuring out a way to fit it in to where it works for everybody involved.

Matt Perrier (01:00:34):

Talk about premiums. And the thing that scares me is I think the clock is ticking. I know your clock is ticking too. Miranda, I can see you squirming over here. Hey, Rogan does this for three hours every day. So we got lots of time. I think the clock is ticking on the industry for us to figure out how to solve this traceability puzzle and pass this information up and down because I don't know if it's two years, if it's 10 years, but if we don't get it done pretty soon within the industry, I'm afraid it's not gonna be a premium for putting those tags in. It's gonna be a discount for not. And if we wait until then to adopt it as an industry, it could be brutal. We love premiums. The truth of the matter is it may be the absence of discounts that really keeps us in the game and keeps us in that supply chain. So I think we've gotta figure out a way to make that enough valuable enough to do it before we are told what they show up at pays without an RFID in their ear and they're worth 30% less or whatever the case may be. Yeah.

Mark McCully (01:01:45):

Guys, one thing I guess that, and this has been just a fantastic discussion. I know we could go for literally hours because this, our listeners are getting a little glimpse of the wisdom that was up on the stage. And I think the value of bringing people together with some little different advantage points on some of this. And man, I think this has just been fantastic. One of the things I also heard up on that stage was a tremendous amount of optimism about this business. I guess it was one of the questions we asked the audience of what one thing are you most optimistic about? Or maybe we didn't even get to that question we were gonna ask, but we've had such a great discussion. What one thing or two things do as you guys sit back and look at where we're at today, what drives the most of your optimism?

Joe Goggins (01:02:33):

I think the two things are number one right now, especially in the near future, the tight supplies. I mean, a market is you get something too much of something too less of something, it makes market. And right now we're short of cows. And I think when you look at the amount of land that we're losing production agriculture, some of those cows aren't gonna come back. So I really think we're in a pretty good position for quite some time. The other one that is, and it's been happening for quite some time, but the whole world has found out they like the taste of beef <affirmative>. They like the taste of protein and they're gonna come here to get it because we've got the safest, best there is in the world. And that to me is, we've probably seen the tip of the iceberg. I mean, when you look at these countries in turmoil right now, especially in Europe, their number one thing right now is how are we gonna create some food independence?

(01:03:35):

How are we gonna create feed our people? And that's where we come in. I mean, we can really help the world. And to me that's encouraging. Yeah, I'm really bullish beef. I think this thing, I know for a lot of people out there probably listening and they're struggling through drought and they're struggling through trying to make payments and this and that, but all I can say is keep them cows. Do whatever you can to keep that core cow herd because you're just about to see fireworks. This thing is gonna be unbelievable in the years to come.

Matt Perrier (01:04:09):

Yeah, I agree, Joe. And I think on the supply side, that drives hopefully a lot of profit because there's just not gonna be enough there. From the demand side, that's where I get equally excited and equally passionate. We talked about 1996, the lowest point of beef demand that we've seen in decades since we've been measuring it. And it's just been a steady up trend from there. I think one big reason to that are things like Certified Angus Beef and value-based marketing and grids that incentivize the opportunity for a producer who wants to make better beef, that the consumer actually wants to get those signal or get those dollars back to him or her. And that's where I guess I get really excited. I grew up in a commodity beef industry and everything was worth the exact same price when you went to market. Every slab, every piece of beef, maybe there was a little bit of difference between choice and select.

(01:05:08):

There wasn't any Prime to speak of. So we didn't even measure the prime choice spread, weren't getting enough. I mean, Urner Barry wasn't even charting CAB choice spread. So I cut my teeth with very few incentives to win back a consumer's trust or demand since whenever you want to start, but let's say 2000, when we see just how many premiums and how many dollars have been passed from consumer back. And when we see something like we've seen in CAB in Prime the last couple years that we sold bigger volumes for more money, which when we talk supply and demand fundamentals, it doesn't make any sense. We all know that if we make more of it, demand's gonna stay the same. And so that supply demand curve is gonna result in lower prices. Well, it didn't, The consumer proved to us that there's almost this inelasticity of demand for the good stuff. Now we can talk different about low choice and select and everything else, but when we talk about the good stuff, CAB and prime, they've shown us that they're willing to pay some pretty obscene prices really for good beef. And so I think that incentivizes these producers to stay ... Just like Joe said, if there is any way you can keep those cows around, I don't think just the next two or three years, I think the next 10 years are gonna be opportunities for folks who stay the course and breed the ones that consumers want.

Miranda Reiman (01:06:34):

<laugh>. Yeah, I was thinking when you said inelasticity in the beef, that was the quote. I think that your dad summed it up best, wasn't it?

Matt Perrier (01:06:42):

Yeah, that's right.

Miranda Reiman (01:06:43):

That's right. The inflation. What two things were inflation proof?

Joe Goggins (01:06:46):

He always told us growing up, there's two things in the world that are inflation proof and that is beef and beer. People are gonna eat it and drink

Matt Perrier (01:06:56):

<laugh>.

Miranda Reiman (01:06:57):

Absolutely. Well it's been a fabulous conversation. We've been wrapping up our podcast with a random question, so this is really quick hitting. If you could have one conversation with somebody from the past that you could go back and have a conversation, what conversation would you like to go back and have that you can't have today?

Matt Perrier (01:07:16):

I'm gonna steal Joe's. I never got to talk with Pat Goggins.

Joe Goggins (01:07:21):

No.

Matt Perrier (01:07:22):

Read and heard and have heard plenty of stories and plenty of influence. But I would love to sit down and even more, Joe and I actually hadn't really gotten to ever talk until the last couple days much. I would love to sit down and that's saying something because my family has seen the beef industry, at least in the last 20, 30 years from a lot different perspective than what I think thought I knew that Pat saw it. And yet I, I'd love to have this visit. I mean, I feel like I maybe kind of having it with him right here.

Miranda Reiman (01:07:55):

By proxy.

Matt Perrier (01:07:57):

Yeah, that'd be one that I think I could learn a lot from. And there's an old cowboy wise old cowboy, he wasn't that cowboy named Aristotle <laugh> that once said the, let's see, the mark of a man is his ability to entertain a thought without adopting it. Right <affirmative>. And so I may not have agreed with all of Pat's outlook on the picket case or anything else. That's right. <laugh> but entertaining that thought. And that would've been a fun one for me. Yeah.

Joe Goggins (01:08:29):

Yeah.

Matt Perrier (01:08:32):

You can't use Tom Perrier, Joe.

Miranda Reiman (01:08:34):

Yeah, yeah.

Joe Goggins (01:08:36):

No, I actually really would like to steal him. I really would like to go back and ask my dad a few questions that just, there's some things happening within this world that people like him and in his generation, whether you agreed with what some of these people pushed or believed in. I mean you had to admire, at least they took a stand and then there was no gray area. It was black and white. I mean, with interest rates crawling up. And if we get to a situation where we have 15, 16, 17% interest, I, I'd really like, cuz that generation has went through that. They went through pain a couple times and I, I'd really like some counsel on, well what are you do when we get in something like that. I mean, just because it's unchartered waters for a lot of us younger people.

Miranda Reiman (01:09:34):

Yeah. Are you gonna answer the question Mark? No, I didn't know I was an eligible answer. We may cut it out since it's went pretty long, but we

Matt Perrier (01:09:42):

Have three Pat Goggins

Miranda Reiman (01:09:44):

<laugh> tell you what I

Matt Perrier (01:09:45):

Remember. We're still independent. I'd say it

Mark McCully (01:09:47):

Would be Pat I used this morning, I used an article from one of my heroes, Dr. Harlan Richie, I got to be in grad school with Harlan, but it was kind of at the final chapter of his career. But man, I look go, and now I'm going back and reading some of what he wrote back in the mid nineties about this pursuit of the optimal cow and or how we balance consumer demand with maternal realities of making that cow work. His article he wrote of Five Years to Meltdown, that was, Mark Gardiner referenced that today that you could probably trace back in the pedigree of US premium beef. I think they would point to that article as kind of a rallying point around an industry's need to wake up and pay attention to consumer demand and grow this pie and grow demand. So boy, I'd like to look back and look at my 22 year old self in grad school and think I was really inquisitive and I think I asked Harlan a lot of questions, but boy, I'd like to go back and do that again. I'd ask him a lot more.

Miranda Reiman (01:10:51):

Absolutely. My answer's pretty personal that it would be probably my grandpa. You know, think about things that you see in your own family's operation and now that you know more about the industry and you think, gosh, I wonder why they did it that way. Or I wonder why I'm pretty involved in the hog business. So saw a lot of this through that consolidation where they used to have their own sows and things like that. And now my family farrow to finish or is no longer farrow to finish. Just finish. Yeah. Well this was fabulous. Yeah, fabulous. Thank you so much guys. We appreciate it. Hope you enjoy the rest of convention and thanks. Maybe we'll have to do it again sometime.

(01:11:31):

(01:11:31):

Thanks for listening today. For a full recap from Angus Convention, watch from the January Angus Journal in your mailbox. Not a subscriber? Visit angusjournal.net and we can change that. And if you like today's episode, I have a huge favor to ask. Could you rate it or leave us a comment to help other people find the show, too? And thanks for joining the Angus Conversation, an Angus Journal podcast.