THE WORLD ACCORDING TO HOOTER MCCORMICK -- WINDSHIELD ECONOMICS

by: Wes Ishmael

Hooter was riding shotgun with Peetie Womack on the way back home from a feedlot where Peetie was checking on some of his cattle.

Merle Haggard provided the soundtrack to mile markers whipping by. Hooter was pondering and scribbling on a day-old newspaper.

THUMP!

A bird mistook the grill of Peetie's pickup for manageable prey, or was simply drawn to light dancing off the chrome. The reverberating sound of the collision seemed out of proportion to the size of the brief blur that appeared an instant earlier.

Peetie neither batted an eye nor tapped the brake. He cussed once, eyed his gauges for damage and then stabbed the button for his windshield washer as he surveyed the carnage in the rear-view mirror.

“That's a shame,” said Peetie. “It just doesn't pay to be short sighted or overcommitted when you're on the hunt or just curious.”

Hooter suspected the observation had more to do with his scribbling the potential of replacement heifers than the suicidal bird. There was something about a feedlot—the sheer volume and all of the data—that always got Hooter to dreaming and thinking he should be doing more with his own cattle efforts.

“At least he took a chance,” Hooter said, mostly to himself. “That's something.”

Peetie adjusted his seat forward and back, up and down. He could never seem to find the perfect spot.

“Chance and risk are a whole lot different than careless disregard of the facts,” Peetie said. He offered Hooter a tootsie roll and then unwrapped one for himself.

“The problem with markets is that most folks chase them,” Peetie continued. “By the time they decide to take advantage of an opportunity, the window's already closed because they were waiting around for something more, but they won't admit it because they can't stand the thought of having missed it. Even a lot of the contrarians who do the opposite of the masses, just because it's the opposite.”

“But…”

“Or, they pencil the inputs based on the wrong opportunity.”

“Huh?”

By now, the windshield wipers were squeaking across dry glass, crying for relief. Peetie hadn't noticed. “You ever wonder why you can't find industry-wide profit and loss data?”

“I suppose it has to do with the fact that folks aren't too eager to share their private financial information,” Hooter said.

“No doubt. But, even if they did share the information, there isn't currently any industry-wide standard for the collection, reporting and interpretation of the data. And, even if there was, objective data couldn't account for the goals of the individual operation, which is paramount to the economic decisions, whether folks think in those terms or not.”

Though Peetie often apologized to new acquaintances for his lack of college education, Hooter had never met anyone savvier when it came to business, especially the cattle business.

“Never mind the fact that folks in the business as a business are competing with those willing to subsidize their participation in the business for any number of valid reasons,” Peetie continued. “Even if you're in the business as a business, what's your goal, what are you trying to accomplish?”

Hooter couldn't remember the last time he'd seen Peetie claim the soap box with such gusto.

“Some folks want to generate revenue to service the mortgage and figure cattle have got to be part of the equation because there's no other decent way to market the grass. Some folks have the place paid for and want to generate enough money from cows to cover the taxes. Others want just enough cows around to get a tax exemption and justify why they bought the place to begin with. And on and on.”

Hooter was mulling that as they idled through what was barely a town. On the outskirts, if you could call it that, was a well manicured farmstead, complete with a freshly-painted—operational or not—outhouse. He and Peetie noticed it at the same time.

Peetie pointed at it with a scowl. “We were ahead of our time. It doesn't get much more gender-neutral that a one-holer in the wintertime. Give those headline nabobs fretting over bathrooms a string of those and tell them to shut up.”

Hooter returned to the scribbles on his newsprint. “But whatever the goal is, profit is profit, right?”

Peetie unwrapped another sweet.

“First off, whoever said you can't go broke making a profit was an idiot. Cash flow and misplaced leverage can make a mockery out of profit,” Peetie said. “Besides, even if the opportunity pays and fits the overall financial scheme, does it serve the goal? Even if you make a profit, but it doesn't get you any closer to the goal, maybe the opportunity cost is too high, maybe you'd have been better off using the time and resources to do something that did get you closer to the goal—even if it meant losing a little money up front. Think of the average average lifespan, there's not a lot of time and opportunity to be dawdling. You want to be in the cattle business, the land business or both? They're distinctly different businesses that some folks clobber together in their decision making.”

Hooter stewed some more, thinking about the various aspects of Peetie's extensive business interests, the ones he knew about; undoubtedly there were lots more known only to Peetie and his accountants.

“O.K.,” Hooter started, thinking out loud. “The market is heading down with the cycle—you said so yourself. You've got a cow herd. Sometimes you keep some of your own calves to stocker and sometimes not, but you always run yearlings and always have some cattle on feed, even when everyone says they're losing money hand over fist. You sold a jag of your heifers because you said the numbers indicated that you had expanded as far as the market would allow…”

“Yeah.”

“Then last month, you bought a jag of heifers to grow and breed. Where do they fit the goal?

“Oh, those,” Peetie grinned. “They were cheap.”







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