Which Technologies Pay Off for Ranchers

So Chelsea, you brought something up that Jarrod and I have also discussed in the past and that's with some startup companies, they might come out with something really cool but is it actually a problem that their target audience was actually needing solved? Today we're gonna talk about cow-calf producers and that's where my main question I wanna base this conversation around is how can cow-calf producers really determine which technologies are gonna be right for them? I don't care who kind of dives into that first but I'd just like to bring light to that challenge itself in the ag space.

I might give an example of an experience I have that maybe isn't necessarily a value add and then turn it over to Jarrod 'cause I know he's worked with some companies and has some ideas about where things actually are a fit.

I spent 12 and a half years at Livestock Marketing Association, led their government and industry affairs, so represented the local livestock auctions across the United States.

And I can't tell you how many tag companies came to us and said, "We've got this great new tag, and not only does it trace animals, but it also does all these additional value-added things, and surely your sale barns, you know, and the producers they work with want these tags." And it's like, well a sale barn is selling livestock for a very small commission, either a percentage or per head fee.

Your technology is more expensive than what they're making per animal.

That's not a fit, right? And that's kind of an example of maybe a mismatch.

On the other hand, Where Food Comes From is a company I work with today, and they do a lot of value add traceability, and their real foundation is yes, they're tagged and they're traceable, but they're tagged to prove up something that people are willing to spend more money on, whether that's a non-hormone treated calf or if it's care certified so you know a little bit more about the animal handling practices.

If you watch those video auctions, Superior, and you see, you know, all of the bells and whistles and different things that different animals have in terms of certifications, you can see a difference in terms of what buyers are willing to spend on those animals.

And so that's why a producer is going to do something, not necessarily because it's cool to know what the temperature of an animal is at any given moment, but it's because they're gonna get paid to do so, or it makes some business sense for them.

Jared, what are your thoughts?

No, I agree, and I thought the point you made earlier when we first were doing introductions, that there's a lot of technology that I'd say the vast majority of it enters our market and our space from external sources, which is great.

We have to have new blood and new life come into our industry to bring these new technologies, but a lot of them enter our space looking for a problem to solve.

And they don't necessarily come into the space first and say, "Hey, what is the biggest problems that exist? How can I go about solving them?" And so I think to your point, there are a lot of technologies that are neat and novel and can give us a lot of cool options, right? And we have to really break down what the ROI is of that, unless you just really...

If you feel comfortable and you're emotionally excited about having technology and integrating it because you feel it's what you need to do, and it's a stewardship-related issue or just a sustainable production-related issue, and it's not directly tied to what's the most profitable form of ranching, then by all means have fun with it, invest in those technologies and integrate them.

But if you're operating like most of us in the agricultural system, which you're asset rich and cash poor, right? Everything has to have an ROI, and you have lots of pain points that need to be solved.

The challenge is a lot of the technology to solve those pain points cost, as you said, a lot more than what they're gonna have to to even have a sustainable ROI and integrate.

And so I think that's where we have to start the conversations there.

And then from that standpoint, I think there are technologies that are out there today that are really, really, really awesome.

I think Chelsea and I both come in contact with quite a few of them.

And they, maybe they have a place here or a place there, and we can get into that for sure.

Would love to.

But I think the one thing that I try to think about, talk about, and stress when I communicate with those in the industry about technology and integrating something or even something as novel as change management, these are tools that we have that we put in something like a tool belt that you wear to work every day.

You wouldn't take a claw hammer and use it for every single job you have on the ranch or every single job you would have to build a house.

You have different tools, and you would use the appropriate tool for the appropriate job and the appropriate amount.

And you may wanna get a brand new claw hammer that's technologically advanced, but perhaps that claw hammer doesn't have an ROI that justifies the old existing tool that already works good enough.