I am generally a good sleeper. My busy days tend to exhaust me so that I go to sleep immediately after my head hits the pillow. This is a long ago engrained habit that stems from my years of competitive swimming.
However, over the past five years there seems to be an ever increasing number of times when I wake up in the middle of the night worrying about something. I am sure that all of you can empathize with me on this, as we all go through stages in our lives when responsibility weighs heavily on our shoulders and worry plagues our psyche.
I am used to both literally and figuratively riding the wave. I have more miles logged into the swimming pool than most folks ever dream of—and I still compete in swimming during the summer months as I simultaneously coach our local swim team. I find those waves comfortable and easy to ride because my success is directly determined by my own hard work and preparation.
I love to care for cattle and raise beef. Spending my days handling and caring for animals is like a dream come true for me. My heart fills with pride as I watch my animals flourish as a result of my crew’s and my dedication and hard work. I put my animals on the truck when they are ready to make beef feeling confident that I have humanely raised a high quality and nutritious protein that I am proud to feed to my family and to yours.
I have less confidence in terms of the business side of my farm. As the volatility of the commodity markets increases with each year that passes, my confidence erodes alongside the quality of my sleep. I find myself worrying in the middle of the night instead peacefully dreaming. My very worst nightmare is to no longer be financially viable as result of turbulent market swings. The very real truth is that I can work diligently every day from sun up to sun down, produce a high quality beef product, and (due to uncontrollable market swings) still lose more than $100.00 per animal when my cattle ship to harvest.
Click here to see a graph of cattle market volatility:
Sometimes I wonder if the folks trading on the Chicago Board of Trade realize that the electronic paper that passes through their hands actually affects a real person who physically grows the products that they buy and sell with the click of a button? Investors make money when the market moves (the direction of movement is really not important)—the more it moves, the more potential for profit. Conversely, the volatility that drives this ability to profit on the board gravely affects my ability to raise a tangible food product.
Click here to see a graph of cattle feed volatility:
The price of commodities on the board provides the basis for both the cost of my cattle and also the cost of the feed ingredients that I feed to my cattle. It also drives the price that I receive when I sell my animals to make beef. The more volatility in those markets, the more difficult it is for me to manage my business to remain viable because the wave of market swings cripples my ability to be financially stable.
I started employing risk management tools about 18 months ago in an effort to ease the worry. I am fortunate to have a very patient broker who does his best to take care of this animal psychologist / feed yard manager. I am slowly learning, but often frustrated that I spend so much of my time trying to control something that seems to render me impotent…
I have been known to say with great frustration “Can’t I just take care of animals and make beef? At least I am good at that!” There are times (like now) when a weather influenced volatile market combined with a weak consumer beef demand offers very few risk management options. As you may guess, the current quality of my sleep is poor…
I know that I must ride the wave.
I have faith that over the long run I will make it.
I worry about tomorrow even as I work so hard to take care of today…
What keeps you up at night?