PJ Budler's Journey and Global Livestock Insights

PJ Budler, a fifth-generation cattle farmer from Tarestat, Northeastern Cape, South Africa, developed an early and enduring obsession with livestock, which he believes is crucial for making a difference in any field. After high school, he gained international experience working on a cattle farm in Scotland, observing different beef industry approaches. His career path saw him scale his cattle operations by partnering with property developer Lou Favvat, learning to think economically and managing diverse breeds across varied climates and cattle cultures in South Africa, Maitius, and Nuivarango. This experience taught him that a one-size-fits-all management program is ineffective, and approaches must be customized to each region, leading to a humbling but educational process.

Recognizing a lack of connection among global cattle industries, Budler founded an international livestock initiative, basing it in Texas due to its geographical accessibility and significant industry presence catering to both tropical and temperate breeds.

Global Livestock Industry Observations: Budler notes that livestock producers worldwide share key similarities: they are independent thinkers, obsessed with their work, and generally prioritize product quality over immediate profit. However, vast differences exist in climate, environment, politics, and "cattle cultures" – such as preferences for cattle color (e.g., red in South Africa, black in America) or size. He stresses the importance of listening and understanding local context before offering advice, citing examples from the Seychelles, where manure was a primary source of income, and Cameroon, where traditional methods of disease management were highly instructive.

Regional and Country-Specific Insights:

• USA: Is extremely progressive, with both exceptional good and bad practices, and is Angus dominant.
• Uruguay and Argentina: Focus on lower-input systems where cows work for the farmer, rather than the reverse, and are Angus dominant.
• Australia and New Zealand: Are lauded for phenomenal pasture management and practicality. Australia is Angus dominant.
• Japan: Features an intensive, totally different industry, utilizing breeds like Wagyu for a distinct eating experience (smaller, premium portions) and is almost all Wagyu.
• Continental Europe: Is dominated by breeds like Limousin, Charolais, and Simmentaler, similar to the British Isles.

South Africa's Unique Position: Budler highlights several advantages for South African livestock producers:

• Adapted Cattle: South African cattle are well-suited to their environment, resulting in less heat stress compared to some other regions.
• Economic Necessity: Tight margins have forced South African producers, especially those with small ruminants, to prioritize good, productive livestock.
• Government Non-Interference: The government's relative lack of involvement is seen as a "huge positive," allowing farmers significant freedom to innovate and grow their businesses without excessive regulations, unlike in many parts of Western Europe, South Korea, China, and Japan.
• Skilled Labor: South Africa possesses a significant benefit in its livestock labor, with many individuals growing up on farms and having a strong cultural affinity for cattle.

Regarding breeds in South Africa, Bonsmara and Beefmaster are numerically dominant, with Brahman-influenced breeds thriving in tropical, insect-prone, humid areas. Angus is growing in more temperate regions, and terminal breeds like Charolais and Limousin are used for feedlot cattle. Budler appreciates the diversity of breeds, seeing them as "laboratories" for finding solutions.

Importance of Exports: Budler strongly advocates for livestock exports as they provide an outlet that prevents large retail stores and feedlots from price-fixing, thereby uplifting the entire domestic industry. He identifies the Middle East and North Africa as massive premium markets for beef, lamb, and goat meat due to their inability to produce locally and their meat-eating culture. Furthermore, selling genetics into sub-Saharan Africa is crucial, as the breeds and breeders are already adapted to African diseases and conditions, offering a "massive uplift of premium on the genetics" by focusing on the "backyard". South American markets also present good opportunities for elite genetics.

Current Engagements: Budler recently judged the Limousin National Show in Bloemfontein, describing the female show as genuinely "one of the best in the world" alongside Argentina. He is currently traveling to Uruguay to judge at the World Angus Forum.

The Old Mutual Inter-Breed Championships, also known as the "World Cup of Shows in South Africa," is an annual competition that identifies the best cattle in South Africa. It is considered the "champions of champions" event, holding a very high status and serving as a platform to honor the genetics and hard work of South African farmers.

Key aspects of the championships include:

• Qualification Process: Entry is not direct; animals must qualify. To do so, an animal must have won the supreme male or female champion title in its specific breed at one of approximately 10 designated agricultural shows across South Africa. Examples of these qualifying shows include Hertsog Wil, Ligtenburg, Vryburg, Bloemskou, Nampo, Alisras, Tabazimbi, George, Swartland, and the Parys All-Breed Show. Only winners from these championships are invited to the Inter-Breed Championships at Nampo Alfa.
• Judging: Qualifying shows use an independent panel of judges. At the Inter-Breed Championships, an international judge, such as PJ Butler, independently evaluates the animals. A unique aspect of the inter-breed judging is that it does not compare different breeds against each other. Instead, it compares an individual animal's qualities within its own breed to another breed, focusing on how well each animal exemplifies the desired traits of its specific breed. This approach aims to set standards and showcase the ideal representation of each breed.
• Awards: Annually, the best cow and the best bull in South Africa are named at Nampo Alfa.
• History and Growth: The competition is eight years old this year, having started in 2016 at Paris Safred Dome. It has since grown to become the flagship competition of Nampo Alfa.
• Past Winners: The event has seen a variety of winners, including Simmentaler, Limousin, Brahman, and Angus. John Davenport, a breeder, has won the inter-breed competition three times with Limousines.
• Event Experience: The event is described as a "nail-biting" occasion. Animals parade through the hall among tables and people, creating significant excitement for attendees before the winners are announced.
• Support and Future: With Old Mutual's assistance, efforts are being made to support qualifiers with transport and accommodation, addressing a significant expense for stud farmers. This support aims to add more prestige to the event.
• Participation Numbers: Currently, a maximum of 20 animals (10 cows and 10 bulls, representing the winners from 10 shows) participate, though organizers wish to expand this in the future.

John and Tracy, who met at Vitz University and married four years later, began their farming journey in 1988 with their first farm on the Vaal Dam. Initially, they started with commercial cattle, crossing Brahman cattle with a Limousin bull, and achieving good results in slaughter ox competitions. This success led them to establish a Devlan Limousin stud, as their cross-bred cattle were being slaughtered, prompting them to move into breeding.

The Limousin breed is highlighted as an efficient breed for producing more meat, with 20% more beef on the carcass compared to the average. It boasts better average daily gains and feed conversions, resulting in tender beef for the consumer. This efficiency, combined with increased carcass yield (60% versus an average 50%), translates to 70% more quantity of beef overall.

Their farming operation has expanded to seven farms, totaling 1,340 hectares on a large peninsula with 20 km of waterfront. They cultivate maize in summer and cover crops in winter, utilizing electric fences and high-intensive strip grazing to enhance carrying capacity. They currently manage 700 animals, plus an additional 100 Droughtmaster heads.

John and Tracy participate in cattle shows and interbreed championships, such as the NO Alpha, to showcase their cattle, promote their breed, and compare their performance against other breeders. Winning these competitions, particularly the overall supreme champion of champions, brings significant prestige, honor, and public recognition to their stud.

The beef industry faces several challenges, including rising costs, dropping meat prices, and intense competition from the chicken industry, which has a significantly better feed conversion rate (1.38 kg feed per 1 kg chicken vs. 6 kg feed per 1 kg beef). Additionally, foot-and-mouth disease restricts beef exports, though there are exports to the Middle East. There's also a lack of focus on protein in national diet discussions, with emphasis often placed on grains.

To address these challenges and improve efficiency, John and Tracy propose several solutions:

• Using the "right type of bull," specifically a Limousin-type bull, on commercial and indigenous animals to automatically generate more meat quantity. This leverages hybrid vigor, a concept they believe has been overlooked.
• Implementing a confirmation score system (1-5), where a round, beefy carcass (a five) is rewarded with a 10% premium on meat price, and a fat, flat carcass (a one or two) is penalized by 10%. This simple, common-sense approach would incentivize farmers to produce more beef without additional cost to the industry and encourage the use of appropriate genetics.
• Breaking down "silos" within the agri-supply chain to foster collaboration between producers, feedlots, and meat processors, as everyone would benefit.

They believe these changes, particularly focusing on genetics and a sensible confirmation score system, can make the beef industry more competitive against other protein industries by automatically producing more protein. They also highlight the need for greater attention to genetics in the beef industry, similar to the chicken industry, to improve feed efficiency. Their "keep it simple, stupid" recipe for success involves having well-adapted, functionally efficient, fertile cows that consistently produce excellent calves for show competitions.

This executive summary provides a snapshot of the discussion, focusing on BKB's role in the agricultural sector, their services, and key advice for successful livestock farming.

BKB's Core Business and Impact:

• Historical Foundation: BKB originated from representing small stock, including wool and later Angora goats.
• Market Leadership: For over 110 years, BKB has been a leading broker for both wool (BKB Wool) and mohair (House of Fiber), with House of Fiber being the largest mohair broker globally. BKB is also a leading wool broker internationally.
• Livestock Auctions: BKB is one of the largest livestock auction companies in the country, conducting approximately six auctions per day on every working day.
• Advisory Services: BKB employs a team of sheep and goat advisors with a nationwide footprint to assist commercial and stud breeders with advice and support to accurately identify superior breeding animals.

Key Initiatives and Programs:

• DSS Program: BKB officially launched the DSS (Data-driven Selection System) program, a scientifically-founded selection program designed to accurately identify and promote superior breeding animals. This program is a collaboration with SA Stamboek and is led by Hannelet Jordaan, supported by Benjamin Jber, who brings extensive practical and scientific knowledge.
• Expansion: The DSS program is currently focused on small stock but is planned to expand to large stock as well. It is seen as a long-term program because breeding is a long-term business where genetic progress is not made overnight.

Philosophy and Vision:

• Client Success: BKB believes that its success is intertwined with the success of its clients, aiming to secure the best prices for them.
• Data and Science-Driven Future: The future of livestock breeding is seen as increasingly driven by data and scientific methods.
• Economic Sustainability: The goal is to make the wool and mohair industry economically sustainable moving forward, especially given the unpredictable nature of international markets and global challenges.

Practical Advice for Breeders:

1. "Happy Medium" Principle: Opt for medium-sized animals for optimal balance in attributes like feed efficiency, space, and overall performance. This applies to sheep (ewes that lamb annually) and cattle (cows that calve annually), emphasizing self-sufficiency.
2. Avoid Extremes: Steer clear of extremely large or small animals, as they are often not the most desirable in practice.
3. Combine Science and Practical Knowledge: Understand the scientific research in animal breeding but also value and listen to the practical experience of older breeders.
4. Focus on the "Big Picture": Don't get overly concerned with minor, non-economic details ("small stuff") in breeding. Prioritize economically significant traits, such as efficient meat production or top-quality wool production. Let economics guide breeding decisions.
5. Breed Choice: All breeds are good. Choose a breed that you like, that "speaks to you," and that is well-adapted to your specific environment. Avoid unnecessary animosity between different breed enthusiasts; rather, learn from each other.
6. "Magic in Numbers": Having a sufficient number of animals allows for stricter selection, leading to faster progress in breeding. Ensure good reproduction rates.
7. Enjoy the Process: Success in breeding is strongly linked to enjoying what you do. If breeding doesn't bring satisfaction, consider commercial farming or a different path.
8. Invest in Facilities: Well-designed facilities enhance efficiency, reduce animal injuries, and improve the overall working environment.
9. Continuous Learning: The industry is constantly evolving, so breeders must remain "students" and continuously learn and improve.
10. Respect and Contribution: Respect show rules and traditions. Breeders should see themselves as working for the broader breed industry, making a positive contribution beyond their own farm.
11. Consumer Focus: Always remember that the consumer is king, queen, and jack. Ethical practices, animal welfare, and traceability are crucial for market acceptance and long-term sales.
12. Personal Attention: Despite advanced programs and facilities, there is no substitute for a farmer's personal attention, intuition, knowledge, and care for their animals. Happy animals are productive animals.

Role of Agricultural Shows:

• Shows like Bloemskou play a significant role in the development of children, including those with disabilities, by fostering self-respect, self-esteem, and self-confidence through responsibility for animal care.
• BKB actively participates in these shows as a partner, with technical advisors acting as judges and ring stewards, sharing in the success of these important agricultural events.

Old Mutual Wealth has committed to a significant three-year partnership with Alpha, an initiative aimed at supporting and developing the cattle farming community. This commitment, which began with Karel Fourie and a colleague personally investing their own funds to save the Alpha function due to a short timeline, underscores a deep belief in the value and potential of the sector.

Key aspects of this partnership and Old Mutual Wealth's vision include:

• Historical Roots and Modern Purpose: Old Mutual, a proud wealth-creating brand since the 1800s, has strong historical ties to farming, with farmers being some of its first policyholders. The current initiative is driven by a desire to "give back" and foster sustainable growth within the farming community, particularly in cattle farming.
• Focus on Long-Term Investment and Development: Unlike many short-term insurance companies, Old Mutual Wealth is a long-term investment company actively seeking to invest in the development and prosperity of the farming community. This approach is unique as traditional focus in agriculture has often been on grain farming and short-term support.
• Knowledge Transfer and Education: A primary goal is to educate farmers on crucial financial aspects such as investment, capital gains tax, estate planning, and the legal and business side of farming, which are often overlooked. Karel Fourie intends to spend time on farms, learning from farmers while offering his expertise to help them safeguard and grow their legacies.
• Understanding and Tailoring Products: The initiative aims to understand farmers' needs better to develop and implement suitable financial strategies and products. Old Mutual Wealth already offers products like "investment-backed lending" and "family office" services designed to help farmers keep their money invested while still having access to capital.
• Elevating the Alpha Event: The Alpha function is an exclusive, invitation-only competition for the "best of the best" cattle farmers who have won regional shows. Old Mutual Wealth's sponsorship seeks to elevate this prestigious event, provide proper recognition for winners, and foster healthy competition to drive improvement and innovation among farmers.
• Promoting New Farmers and Economic Growth: The partnership is exploring initiatives such as a "Young Cattle Breed Farmer of the Year" award to encourage new entrants into the industry. By teaching new farmers and promoting growth in cattle farming, there's a significant opportunity for job creation and increased beef exports, as 95% of South African meat is currently consumed domestically.
• Relationship-Based Approach: The core of the strategy is building strong relationships with farmers, rather than just seeking immediate sales. Old Mutual Wealth views this as a long-term commitment to making a positive difference and fostering growth within the community.

The overall vision is to uplift the farming community, especially cattle farmers, by providing financial expertise, support, and recognition, ultimately contributing to wealth creation and ensuring a robust legacy for future generations.

This summary draws on insights shared by the speaker, Tienie du Plessis, who speaks from his unique perspective as a shearer and farmer.

Key Themes and Insights:

• Leadership is Paramount:

◦ A team's effectiveness hinges on its leader, not its weakest link. Marcus Aurelius's quote highlights this: "I do not fear army of lions led by a sheep. I fear a army of sheep led by a lion".

◦ Good leadership addresses minor issues immediately, preventing them from escalating into major problems and frustrations. An example of poor leadership was a foreman who failed to stop shearers from "tapping" sheep out of frustration, allowing a bad habit to worsen. In contrast, a new foreman immediately corrected this behavior, demonstrating good leadership.

◦ Effective leaders lead by example, showing people "how" rather than just telling them "what" to do. An Australian classer demonstrated this by expertly shearing a difficult sheep, earning the shearers' respect and setting a clear standard. This contrasts with an arrogant New Zealand classer who lost credibility after making a mistake while trying to set a standard.

◦ Leadership is crucial in challenging times, as people look for guidance and hope.

◦ Everyone is a leader, whether on their farm or within their family, and has a responsibility to be the best version of themselves.

• Navigating Challenges and Uncertainty:

◦ Farmers and shearers face significant challenges, including unpredictable product prices, widespread negativity, and uncertainty about the future. Shearing, like life's difficult periods, can be incredibly stressful.

◦ Farmers are price-takers, a reality that is unlikely to change.

◦ Shearing difficult sheep, like those from canola fields (which make them lively) or large ewes, presents physical and mental challenges, leading to frustration and difficult working conditions.

• Personal Responsibility and Mindset:

◦ A core principle is: "If you can't change the problem, change yourself".

◦ This involves consciously choosing one's environment: surrounding oneself with people who provide honest feedback and "call out" mistakes, rather than "yes-men".

◦ It also means managing what one consumes from media, radio, and social media, as algorithms tend to feed negativity ("Misery loves company"). Choosing positivity allows one to radiate it to others.

◦ Hope alone is not a strategy; it only comes into play after all humanly possible steps have been taken to ensure an outcome.

◦ Perseverance is key: "You can only fail if you quit" and "Do not stop fighting" are critical messages for overcoming adversity.

◦ Standing up for what is right, even if it means standing alone, is a mark of true leadership.

• Spiritual Calling and Purpose:

◦ The speaker emphasizes that God has chosen farmers to care for their land, wives, and children, seeing them as instruments for His purpose.

◦ Farmers are described as "the unstoppable force" needed by God to produce food for the nation.

◦ Simple acts of faith, like saying grace before meals, can have a profound impact, inspiring others to engage with their faith, as shown by the New Zealander who started reading the Bible after experiencing table prayers.

◦ A prayer concludes the address, asking for strength, soft hearts, and guidance to make good choices and fulfill their divine calling.

Here is an executive summary of the provided text:

The presentation, "Foundations of Economic Progress," emphasizes a realistic and forward-looking approach for farmers, focusing on self-reliance and adaptation amidst challenging national conditions.

Current Reality and Challenges:

• Local vs. National Issues: Many critical problems for farmers, such as safety, theft, fires, and roads, are best handled at the local, Free State level, rather than in Pretoria.
• National Economic Indicators: South Africa faces high unemployment, low economic growth (near zero last year), and a weakening currency (Rand depreciated 42% over 10 years).
• Government Debt: The government's debt has doubled in the last decade, reaching R6.4 trillion, with R1.2 billion paid daily in debt servicing. This indicates a precarious financial situation.
• Political Instability: The country is not politically stable, with significant changes expected in the next few years.
• Lack of State Support: Government policy is identified as the biggest risk for farmers. Commercial farmers receive minimal state support, with producer subsidies at 1.7% of income compared to around 20% in other regions like the EU or USA. Furthermore, Land Bank funding for commercial farmers is only 7%, with a focus on emerging farmers.
• Governance and Infrastructure Deficiencies: Key foundations for wealth, such as the rule of law, protection of property rights, and good governance, are severely lacking. Infrastructure (transport, energy, digital) is poor, and critical services like biosecurity are failing at the provincial level.

Foundations for Progress and Opportunities:

• Self-Reliance and Local Action: The core message is that help for farmers comes from within – from their own efforts and local organizations, not from Pretoria. This includes managing roads, security, and biosecurity at a local level.
• Adaptation and Innovation: Farmers must adapt to change, as this is how money is made. Innovation and technology are driven by farmers and supporting businesses, enabling international exports, not by the state.
• Key Drivers for Wealth: Essential elements for a thriving farming environment include education and skills, strong rule of law (including property rights and contracts), good governance, sound economic policies, efficient markets, and robust infrastructure.
• Market Growth and Export Opportunities:

◦ There is a definite and growing market for agricultural products.

◦ The global population is increasing, projected to reach 8.8 billion, with significant per capita income growth in regions like India and China.

◦ Sub-Saharan Africa is highlighted as a massive market opportunity, with its population expected to grow by 1.8 billion in the next decade. This region will increasingly import food, potentially up to 34% of its basic food needs, making it a crucial market for South African farmers.

◦ South African commercial farmers are resilient and strong, supplying both domestic and international markets with minimal state assistance. Over 50% of agricultural income comes from exports.

◦ Specific export growth has been seen in beef, white maize (to neighboring countries), and lamb (to Arab/North African countries).

◦ The Free State is the "food basket" of South Africa, producing 51% of the country's crop products and 43% of animal products, giving it a strong position to assert its needs.

Conclusion: Despite the challenging national environment, the potential for growth and success lies in understanding the "current reality" – that problems are local and solutions must also be local. Farmers need to focus on self-management, leveraging existing strengths, adapting to trends, and aggressively pursuing market opportunities, particularly in a growing Africa, rather than waiting for government intervention. Hope is necessary for a plan, but action must be taken locally.

This executive summary outlines the key points from the provided audio excerpts by Prof. Erwin Schwella, focusing on his views regarding the state of South Africa, the challenges faced, and proposed solutions, particularly for the agricultural sector.

Prof. Schwella begins by expressing his deep love for South Africa and its people, acknowledging the significant contribution of the audience to the country's welfare. He emphasizes the need for wisdom when facts and realities are our friends, stating that neither positivity nor negativity helps, but realities will guide us. He suggests a radical honesty about the country's leadership, likening both Donald Trump and Cyril Ramaphosa to bullies, and declares his lifelong dislike for governments, recognizing only God and his spouse as legitimate authorities over him.

Key Challenges Identified: Prof. Schwella highlights that South Africa faces serious problems, including issues with infrastructure (like roads), challenges in the value chain for finding vaccines, and the viability of agriculture due to reduced yields and threats to rural safety. He also points to a fundamental hostility within the government.

Proposed Solutions and Call to Action: To address these challenges, Prof. Schwella advocates for a multi-faceted approach centered on data, information, knowledge, and wisdom, utilizing new technology and business models. He proposes three core actions, with a fourth added by him:

• Analyze the problems (the "A" of analysis).
• Act activistically.
• Take action.
• Innovate, which includes not only technological innovation but also social innovation.

He encourages thinking beyond conventional "thinking outside the box" and instead suggests "tearing away the box" to come up with entirely new solutions. Prof. Schwella calls for a substantive debate about transformation, arguing it should be driven by the values of the South African Constitution (Article 195), emphasizing effectiveness and ethical conduct, rather than the "corrupt exploitation" of the National Democratic Revolution's ideology.

Concrete Handling Proposals for the Agricultural Sector: Prof. Schwella stresses that involvement is crucial, not just as individuals but collectively and through institutions. He outlines specific strategies for growth and overcoming scarcity, which should involve distributing growth and prosperity, not scarcity. His recommendations include:

• Inclusive Social Innovation: This involves inspiring ideas, inclusive institutions, and impactful implementation.
• Prototyping: Build smaller versions of desired solutions, continuously test them, learn from the results, and refine them for better functioning before scaling and spreading.
• Co-creation and Collaboration: Farmers should cooperatively co-create and pool their innovation.
• Commercializing Expertise: Pool and commercialize the vast knowledge, patents, and intellectual property within the agricultural community to generate capital and capacity.
• Self-Funding Infrastructure: Explore developing decentralized, self-funded solutions for tertiary roads, acknowledging existing capital and capacity challenges.
• Cooperative Banking/Social Enterprises: Establish cooperative banks or social enterprises (like a "VBS bank with integrity") to address capital and capacity problems, providing financial support that traditional commercial banks might not. He cites the example of "Medicope," a medical cooperative, as a model.
• Capacity Building for Essential Needs: Collaborate with institutions like the University of the Free State and generic medicine manufacturers to create capacity for producing essential items like vaccines.
• Knowledge Cooperation: Form a knowledge cooperation to pool, commercialize, and offer knowledge nationally and internationally, leveraging the fact that knowledge grows when shared.
• Internationalization: Encourage younger generations to gain international experience and build global networks within comparable agricultural unions to leverage opportunities, including exchange rates, for the benefit of local initiatives.
• Continuous Learning: Maintain experimental and continuous learning as "farmers are people with plans".
• Creating an Innovation Center: He suggests establishing a center for innovation within the Free State agricultural union.

Prof. Schwella concludes by sharing several "wisdom sayings," including that what hurts you is not what you don't know, but what you think you know. He also emphasizes the importance of self-knowledge as the foundation of wisdom and the necessity of never running out of options.