Schiefelbein Farms- Managing Market
Risk
Don SchiefelbeinKimball, Minnesota
A Family Operation
Schiefelbein Farms
Frank & Frosty (Dad & Mom)9 sons8 daughters in-law31 grandchildren10 great-grandchildren
Raising Registered Angus Seedstock since 1958
Yes, we are Catholic!
650 head of Registered Angus Cows
Cows/Heifers Rough it
Market 300 Angus & Hybrid Bulls Each Year
Rito 1I2 Final Answer
BR MidlandObjectiveSale Date: February 19, 2011
Selling 300 Angus Bulls
Feed 5000 head of fed cattle annually
1500 head of Customer Calves on Feed
CONFIDENTIAL
Schiefelbein Farms
BusinessPlan
Basic Rules
We’d all be very, very rich.
If it were easy...
Risk Management at a Young Age
We’d all be very, very rich.
If it were easy...
Basic Rules
And, I mean nobody. If they did, they would not
tell you.
Nobody knows the market
Risk Management
Practical Risk Strategies
Formal Risk Management
Usually inexpensive, easy to understand
In risky markets, very expensive
We take a “high deductible” approach when we feed the cattle at our place with our feed
We take a “lower deductible”, more conservative approach when we feed cattle outside our place
Formal Risk Management
Be Disciplined Be Disciplined Be Disciplined
Guiding Principles
We ALWAYS employ this rule in our feeding
operation.
Avoid “Game-Over”
Guiding Principles
Establish a formal risk management strategy
that allows you to be in control of your operation
Avoid “Banker Input”
Guiding Principles
In “Bull” markets, we strive for significant profit potential.
In “Bear” markets, we have a breakeven plus mentality
Big Picture Perspective
BUY feed cheapSELL cattle highWe always buy value-added calves
Informal Risk Management
Be Disciplined Be Disciplined Be Disciplined
Guiding Principles
We feed by-products that other proteins can’t
(sweet corn silage, wet beet pulp, wet gluten, wet distillers grain, soybean hulls, corn screenings)
Feed what most can’t
Guiding Principles
The way small producers can effectively compete with larger companies is by growing their
own feed
Grow Your Own Feed
Guiding Principles
100% of the cattle we feed are sold as value-added cattle
(NHTC, Natural, Source & Age, Value-based grid)
Always Sell for More
Rito 1I2 Final Answer
BR MidlandObjectiveSale Date: February 19, 2011
Selling 300 Angus Bulls
Warning!Tractors Don’t Float.