KLR Blog

Bud Williams (1932-2012)

An Original Thinker, a Hard Taskmaster, a Brilliant Mind.

To live to be of a certain age is an achievement, and to live a life which is full and interesting is something that many of us can only reflect upon.

Not so the life of Bud Williams, his life on the whole has been one of many accomplishments.

So it is an honour to pay our respects to a man who has been productive and successful in his life’s work and whose path is marked by considerable achievements.

Bud Williams was one of the few individuals who powerfully influenced the world in which he lived.

He simply did what he believed was right, never any fanfare or emotion, just clear, simple and concise. Bud never tried to complicate life or business and he sometimes couldn’t understand why ‘we’ couldn’t see or get things. For him, it was simple.

His purpose in life, he said, was to make things better … for animals and for agriculture and he did this the world over. He never set out to do that, it just came into being and he and Eunice saw a need.

His approach to stock handling and livestock marketing was as unique as he was.  They were truly pioneering and ground breaking.

He had the courage to challenge conventional wisdom on many planes and refused to accept, that things could not be different, better or more practical.

As with all people who march to the beat of a different drum, Bud had his detractors, those who were confronted by his directness or challenged by his views.

Bud possessed the ability of original thought, a gift not bestowed on many of us. Every process, every action, every thought was open to his unique appraisal and enabled him to rationalise concepts that were beyond the ability of the rest of us.

His powerful mind also manifested itself in his physical capabilities. He could run faster, further, longer, driven by a mind that would not yield, his ability to withstand temperature extremes, hunger and sheer exhaustion were due to willpower without equal.

He was a hard taskmaster and he expected others to at least attempt to keep up, knowing though, he would outlast them!

In moments of quiet reflection Bud understood that he was different, but by the same token had little tolerance for those who challenged him with their own belligerent ignorance.

He often said we never take the time to think, and that an enquiring mind seeks to observe, understand and ponder.

Like many brilliant minds before him Bud suffered derision at the hands of others, and thus succumbed to periods of self-imposed exile where he removed himself from the madding world.

Bud Williams however was not a quitter and he emerged from these sojourns stronger, wiser and even more inspirational.

As an educator Bud was able to teach from experience not a text, his were not theories nor conjecture but hard facts. He lived what he taught, practiced what he preached and constantly fine-tuned his teaching methods, right up to the last.

He was generous with his time, his money and his thoughts, and while a few tried to take advantage, no one ever got the better of Bud Williams.

While at times he found it hard to interact with people, it was his generosity of spirit that meant his life had been devoted to helping the very people he sometimes struggled to understand.

In a world where success is measured by wealth Bud simply gave away what he had, time and time again. Many espouse the theory of selflessness but few live it truly the way Bud & Eunice did.

He lived in that magnificent place where no one could harm him, where his mind was his own, where material possessions were more a hindrance than a help and where he could truly say he was his own man.

The legacy of Bud Williams reaches far and wide, reshaping an industry that often refused to be changed.

Bud and Eunice were unique in every aspect, a team, solid and dependable.

There would be no KLR if not for Bud & Eunice Williams. We, Jim & Terry, Grahame & Ros, Rod & Isobel have been blessed in a way that is difficult to fully comprehend.

To have had the opportunity to be tutored by, to work with and to have shared a friendship with a man of Buds’ calibre has been simply a remarkable experience.

His generosity in sharing his knowledge with us and his encouragement and passionate determination that we share that knowledge with others is a legacy that has changed the world for many people.

Poignantly we acknowledge this debt and reluctantly we say goodbye.

Bud died as he had lived, without fuss, without fanfare, simply slipping away leaving us richer, wiser and more capable than when he found us.

Farewell Bud.

Knight, Lindsay & Rees Families

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Measuring farm performance

By JIM LINDSAY

As the saying goes: it is difficult to manage what you don’t measure. There are three main methods for measuring financial performance in farm businesses:

1) Total net worth, ie cash, plus the value of your livestock, plant and land inventories

2) Cash plus livestock inventory value

3) Cash---livestock numbers and class----plant----land, etc.

The third method is a separate measure and value of the different inventories.

It is also the one that KLR Marketing would suggest to use, as it gives the business a clear view of the separate inventories.

I am not suggesting that the other ways do not have a place, however they can be misleading if not understood correctly.

View inventories clearly

Just to expand on the third a little:

Cash is easy to measure: it is either up, down, or the same.

Livestock numbers and class: the numbers are like the cash - they are up, down, or the same.

The class of stock may be different even if the numbers are the same, so that can be noted. For example, the class of livestock could have changed from heifers up to cows and calves, or from 200kg steers up to 400kg steers. However, remember the profit is not yours until you have actually sold and replaced, (either with outside animals or ones you have bred).

A catch in ‘book valuing’

Be careful about valuing the livestock inventory for the purpose of measuring profit or loss, as a business can make the mistake of ‘book valuing’ its livestock inventory for profit or loss, only to have that ‘book’ profit or loss change the

moment the market value of the livestock shifts.

For example, if the business had determined a profit by including a livestock inventory value, and the market value of the livestock halved, it could easily turn a profit into a loss and vice versa.

The only real profit is when the cash is taken off the table!!

Plant and its upkeep is something that can influence profit, so needs to be kept in mind.

Measure what you can control..

Land value generally only matters if you want to sell it, or use it as equity to go to the bank.

If the land is reasonable enough to depasture livestock on, then a livestock business can be carried out on that land regardless of its value. Unless you have good reason, don’t’ measure the business performance on things that cannot be influence by management. If you are looking at your overall investment return then combining all the inventory values would be necessary.

...don’t base decisions on what you cannot control

If a livestock  business can generate cashflow and profit while maintaining the livestock inventory, that is the best risk management it can have.

Businesses relying on an increase in land values for equity to borrow against and run the business, can be at high risk.

One of the most valuable things a farm/livestock business can have is the ability to create a cash profit.

That profit can then be used to go towards all types of different things.

A word on benchmarking

Some women shop for shoes, while Mel shops for cattle

                                                                                                                

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The 2012 Orange KLR Marketing school was well patronised with 78 participants, from far and wide - WA, Vic, Qld, ACT and NSW. There were both sheep and cattle producers,agents accountants,lot's of young people.

There was a great mix of men and women there looking to increase cashflow and profit in their  their livestock enterprise.

 We had several graduates share their experience using KLR Principles.

 Mel Kiel from Yeoval shared how she started a couple of years ago with just 4 head and turned over 200 last year.

 Andrew Oldham gave a great example of how he uses KLR for his sheep enterprise.

 Kristy Hunt came down from Walcha for the week and shared how their family uses KLR for both breeding and trading in a sheep and cattle enterprise.

New to KLR Marketing ? We have produced a 50 minute CD where, Jim, Rod and Grahame share more about the KLR marketing principles.

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Richard & Victoria Moffatt

DO know how much it actually costs to own your livestock?

A Central Queensland couple has found that the ability to calculate and know this figure for their cattle business has helped revolutionise the way they operate.

Richard and Victoria Moffatt, “Muldoon”, Marlborough, say they experienced a paradigm shift after attending a two-day KLR Marketing School at Emerald in 2009, and came away with real strategies to take their business forward.

“When you do an educational course, you often come away wondering how you’re meant to use what you've learnt but when we did the KLR school we came away and just knew how we could implement it into our business,” Mr Moffatt said.

“We could see straight away how we could use our Cost of Production in a trading or breeding environment to maximise the profit in our business.”

The trio of men behind the KLR Marketing system – Jim Lindsay, “Landsborough Downs”, Hughenden, Rod Knight, “Kooramilla”, Tamworth, NSW, and Grahame Rees, Bathurst, NSW – don’t like to use the phrase ‘Cost of Production’, opting instead for ‘Cost of Carry’.

Mr Lindsay said it was “vital” to know your Cost of Carry.

“Sometimes you can have a Cost of Carry incurred that may not be associated with any Cost of Production of a commodity such as kilograms of beef or wool,” he said.

“You can buy a 300kg steer in, hold it for a month, and it may not have put on any weight in that time, but you have still incurred costs such as transport."

“It’s all about how we view the exercise."

“It’s extremely important to know the Cost of Carry to a reasonably accurate degree because then you can complete the Sell/Buy formula we teach at KLR, to know whether a trade is profitable or not.”

In any livestock business, there are direct costs associated with a particular mob or flock, such as transport in and out, drench, shearing, interest on money borrowed to buy the livestock, and so on.

Then there are overhead costs that come irrespective of what number of type of livestock you have on-hand, including shire rates, interest repayments on land loans, labour, and so on.

“One of the other things that people are getting breakthroughs in using KLR is the ability to make a decision to sell and create cashflow into the business,” Mr Lindsay said.

“Cashflow is something that people need to generate on a regular basis so they don’t get caught wondering how they’re going to pay the next bill.”

Mr Lindsay emphasised that cashflow and profit were different, with cashflow incorporating Cost of Carry and profit being the ‘cream on top’ after costs.

For the Moffatts, the KLR Marketing School fit into their overall belief in the power of self-education, and they were now also part of KLR’s Mastermind Group, where graduates networked and accessed further resources for implementing their new-found skills.

“Because your margin has become so tight these days, you need to maximise profit however you can,” Mr Moffatt said.

“By knowing our Cost of Carry, we have a margin from where we can determine whether a class of animal is underpriced or overpriced in the market.

“We've really broken down our Cost of Carry to a per head basis and really understand what it means.

“Being able to look at our Cost of Carry on an annual or per head figure basis allows us to use the grass we have on-hand to maximise profit.”

Mr Moffatt said he was not picky about what class of cattle he bought, so long as it came with the opportunity for profit.

“I buy anything that I can make money out of,” he said.

“I could go to a sale and any class of animal can come home on my truck, it doesn't really matter.

“At the moment, we feed a lot of cattle up to feedlot entry weights and for anything that blows out of that weight grid we see if we can carry it forward to a kill weight at a profit.

“We've also got breeders at the moment and sell some as pregnancy-tested-in-calf (PTIC) and calve down others, depending on what’s most profitable at the time.

“If that animal is not paying its way anymore, then we look to trade that animal back into the market where that money is going to return us a positive gain on another class of animal.”

The Moffatts operate 3240 hectares (8000 acres) in a rotational grazing system, with pastures dominated by softwood scrub country through to River Bluegum, and Brigalow country to open Soft Bloodwood forest country.

Grasses include Leucaena, buffel grass, native bluegrass, black spear grass, and green panic. 

Mr Moffatt said he normally ran 1000 young cattle and 200 to 250 breeders.

“The one thing that KLR has allowed us to do as a young start-up business is to cashflow our business without jeopardising our inventory on-hand,” he said.

“Cashflow is everything, really, especially in the current environment we live.

“What banks really want to know about is cashflow - not equity.

“Whether you’re a breeder or whatever operation you run, understanding your Cost of Carry will help you to access cashflow from your livestock enterprise.”

New to KLR Marketing ? 

We have produced a 78 minute CD where, Jim, Rod and Grahame share more about the KLR marketing principles.

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One of the questions we get a lot at KLR is "Does KLR Work for Breeders" ?

In this video I give a short explanation on the breeding cycle and how KLR can assist a breeder to know :

• What to Sell
• What to Keep
• When to Sell
• When to Keep

Knowing your Cost of Carry will assist your decision making process.