“What’s the plan?” We hear or refer to that question several times every day. It’s the driving force when growing a business, or when you’re a resolving problem in the board room or, for those of us in the cattle industry, when you’re in the barn. People like Tim Abbott thrive on finding the answer. The owner of St. Jacobs ABC knows that having a good plan, from the barn to the board room, is the cornerstone of success in the dairy cattle business today. Whether you are starting out or have more than twenty years in the business like he does, Tim says the first step must be, “Chart a plan”. That comes first. Then, you have to “know how your investment can accomplish your goals.” He sums it up clearly, “I think you need a plan for any investment in our business.”
“One size does not fit all!” When it comes to investing in the dairy cattle business this can be modified to,” One plan does not fit all!” You have to have a plan and it has to be a focused plan. That’s where the critical differences come in for someone like Tim Abbott. “Whether it is show cattle or genomics or great maternal lines” he insists “You must have a plan for what you want to achieve”.
“Know what cattle you are focused on.” “For us we really prefer to buy cows.” He recognizes “There certainly is good money in buying the right heifer.” But he returns to his point, “At St. Jacobs ABC have focused on show animals, so milking cows are our preference.”
“Investment cows need star power.” Here Abbot continues to fine tune what St. Jacob’s is looking for. We want “a cow that can become iconic as an individual”. You might be wondering how they find that winner. Tim explains, “The cows must have a sire stack that tells us they can be great and a maternal line that has proven to be successful.” You can never have too much information. It is the basis of decision-making and good planning. “We always try to figure out how many daughters it will take to pay off our initial investment. We like to stay in the range of 10 or less daughters to get the purchase price back.”
Which brings Abbott to how important budgeting is to the planning process? “Be sure you can afford to pay for what you buy.”
“Is that in the budget?” It seems a no brainer but the devil is in the details and in the budget too! Tim cautions” You need to budget for the expenses after your purchase. IVF, flushing recips, advertising – these will add up no matter what your investment level is. Be sure you have the money for all of this.” The money and what you spend it on is the key to success. “Over the years we have spent too much on average ones.” Although hindsight is 20/20, when looking at some past decisions he says he wishes “we had stayed with the great ones.”
“Stick with the great ones!” Tim feels that in today’s market, “There is very little middle ground. Cows are commercial or very valuable.” In the last five years genomics has had a huge impact on the cattle business. “The genomic business is fantastic right now and the upper end has great value for the next generation and embryos.”
“Weigh In on the Genomics Debate” Tim’s view on this phenomenon is “Good breeder, type cows and heifers don’t have enough value in my mind but that is reality. IVF has had a huge impact because you can make daughters so efficiently and I think that is why the middle ground cattle have lost some value.
“Where’s the focus for St. Jacobs ABC?” Abbott summarizes the key issues. “We have chosen to stay out of the genomics game and focus on cows that are like our bulls … high type, great sire stacks and good female lines.”
“Stay positive. Be careful.” “I think the good ones, whatever your focus, will continue to have tremendous value. I think people will have to be careful with IVF not to make too many daughters of certain cows and watch the market very closely”. He sees three possibilities:
THE BULLVINE BOTTOM LINE
FOCUS ON TOP GENETICS. PLAN ON TOP DOLLARS.
“As things change with testing bulls, the value of top genetics could keep going because of the potential for breeders to have very valuable bulls. I think we will see some similarities to when there were many breeder proven bulls….the VERY top will make top dollars.” Tim Abbott, St. Jacobs ABC.
Not sure how much to spend on that great 2 year old?
Want to make sure you are investing your money wisely?
Download our Dairy Cow Investment Calculator.