Dear Mastermind Member,

I will run you all through a practical example of how one client has been using the KLR principles to value their livestock and make sensible trading decisions.

At weaning time the weaner heifers were valued against the value of ready to join heifers at the time to see if it was worth while to take them through to joining weight.
At that point the weaners were not worth a lot due to the drought but heavier heifers (300 to 350kg) were still making good money due to feedlot interest.
After putting the figures into the spreadsheet they determined that the weaner heifers were underpriced and thus worth keeping (a sell/buy, sold grass bought heifers).

Last week the decision to now join these heifers or sell at a store market was being made.
They ran the figures through the heifer replacement spreadsheet and determined two things.
Firstly if they kept the heifers through to the heifers being red tag pregnancy tested there would only be $10/hd profit for the time held. Secondly and more importantly they were able to work out a reserve price for their heifers at the store sale.

In short to give a reasonable profit on taking the heifers through to red tags they needed to be purchased for less than $390/hd.
The fat market was paying around $500/hd for the same article. Result they sold 75% of the heifers at the store sale for $570/hd.(sold the balance at the fat sale).

At the same store sale they replaced the heifers with steers knowing exactly what they could pay.
Everone else at the sale wondered what the hell were they doing.

Well done they are Mastermind members so will read this and should be congratulated on the thoroughness of the process. 

Cheers Rod