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Business Management: Charts Ease Decisions

January 30, 2013
p22 Charts Ease Decisions
Harry Knobbe, owner of Harry Knobbe Feedyards, Livestock Sales & Commodities, takes time to teach a high school ag class marketing basics.  

Commodities and diversity provide security for Nebraska family farm

Eyes glued to the computer screen, with a 15-year file of February market moves and a phone that rings every five minutes, Harry Knobbe of West Point, Neb., is like a kid in a candy shop. "It’s exciting," he says. "You have to be prepared to make quick decisions, but control your emotions."

Knobbe, who started farming in 1960 with a vision of 160 acres and a few head of cattle, says the same ability to make fast decisions while keeping a level head and emotions in check can be applied to farming, and he looks for it in his employees, regardless of their role.

"I’ve always got my eye out for opportunities. Not everyone can win. You have to try to outmaneuver others."

Today, Knobbe farms and owns Harry Knobbe Feedyards, Livestock Sales & Commodities, Inc., in Cuming County, which is 24 miles by 24 miles with a population of 9,500 people and 330,000 cattle on feed any given day. With customers in 25 states from Virginia to Montana to Utah, Knobbe has earned the respect of farmers and ranchers across the country, marketing 720,000 cattle a year.

Though agriculture has become increasingly volatile during the last decade and risk management has never been more critical to farm and ranch sustainability, Knobbe says farmers are lucky. "What other industry has the ability to lock in prices?" he asks. "The automotive business is completely dependent on consumer spending, which fluctuates. The construction industry is dependent on the economy, with little to no ability to control its future from year to year."

Knobbe is diversified within and outside of the cattle industry and says he is in a comfort zone. "I’ve got commodity markets to deal with my risk and can hedge, set a floor and forward-sell." Admitting that it took him about 20 years to figure the markets out, Knobbe relies heavily on history and charts, as well as his employees. Two walls of a makeshift classroom in the basement of his office are covered with cattle market charts dating back to 1967 and have been marked every week since.

Student Turned Teacher. Knobbe, a student of the commodity markets, takes advantage of professional development opportunities and networking, and gets involved in organizations and boards at the local, state and national levels.

"I’ve always got my eyes open, looking for opportunities," says Knobbe, who partnered with four others in West Point, Neb., to open a hotel and provide visitors with an alternative to Super 8. "Not everyone can win. You have to try to outmaneuver others."

He explains that the market has made a lot of $18 moves during the past 30 years. In 2011, fat cattle went from $126 to $108. In 2012, they went from $129 to $111. This is good, Knobbe says. "You can’t make money on a sideways market," he notes, acknowledging that some disagree with his philosophy.

Knobbe continues to learn, but now his focus is on helping others excel. He opens the doors of his business to local high schools, allowing them to come in and learn about commodities and marketing, while exposing them to different agricultural professions.

Knobbe advised a class of students to be curious and ask questions. "Get involved in extracurricular activities, work in the field and do some research on the job or career you’re interested in," he said. "I will hire someone who has had internships and experience compared to someone who hasn’t, even if they both have the same degree and interview well. It tells me you take initiative."

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FEATURED IN: Top Producer - February 2013



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