Building a Sustainable Business Plan
So, what is a registered Dexter worth?
How much will a Dexter heifer cost?
How can I, as a Dexter owner myself, set my own selling prices?
I hear these questions often as I converse with Dexter owners and prospective owners. Since Dexters are not a typical commercial bovine, pricing seems to be a difficult thing for people to grasp. And because Dexters are mostly a niche market, it’s difficult to compare Dexter pricing with the price of other breeds of cattle.
In grappling with this issue ourselves, we have built a pricing system that helps us confidently set the prices of our Dexters. I have written this blog post in hopes that it will help both buyers and sellers of Dexters get a sense of the issues surrounding Dexter pricing and, hopefully, settle on a pricing system they believe is fair and reasonable.
The steps we used in building this pricing system were two-fold:
Establish a set of Core Values that guide us. Without core values, there would be no real basis for our decision-making.
Set up Foundational Pillars that drive our decision-making. The pillars make the process of setting prices predictable, easy, and repeatable.
Our Core Values
Yours might be different from ours, but HAVING values is the point.
We will only sell ADCA registered cattle. This is the type of Dexters we want to raise, it is the only type we will buy, so it is the only type we will sell.
We will not sell an animal to someone else that we would not want to keep in our own herd. Any animal deemed a “cull” will be processed for beef, not sold to others.
We will not sell Dexters as pets. We believe that the Dexter breed’s hope of preservation is their use, their promotion, and their value as production animals. Dexters are meant to be beef producers, milk producers, and draft animals. For this breed to survive, they must find their niche in the agriculture community in those three categories.
We will make a profit on our Dexter sales by balancing our selling prices with our operating expenses. We set our prices solely on our own ability to raise these animals in a thrifty manner, promote them as production livestock, and sell them at a fair profit therein. This encompasses the idea that we will not bolster our profit on the backs of other Dexter owners using the “buy low, sell high” business model.
Whatever price we set for our own Dexter sales is the same price we will gladly pay other folks to purchase Dexters from them.
We will sell our Dexters according to their real value as production cattle, not according to any market fads that might currently be circulating. We will not, therefore, add up-charges for any trait that we deem to be a non-production trait. In our mind, non-production traits include color, polled status, chondrodysplasia status, and A2 status.
We will not negotiate with our prices. We set our prices very purposefully and will not raise or lower them situationally. We do, however, offer discounts on prices if someone buys more than one Dexter at a time . . . which we see as a client courtesy.
Our Foundational Pillars
These 4 things under-gird all our pricing decisions.
Perhaps this list will help you develop your own foundational pillars for setting your prices.
Our prices are established by studying our costs. We keep close records on what it costs to raise these wonderful animals. We track our expenses on hay, feed, vet visits, pasture maintenance, vaccinations, wormings, fly treatment, and anything else that is an expense (including testing and registering them).
Our prices are calculated to include the profit we need to stay sustainable. For example, our price for calves is calculated by adding these factors together:
cost of keeping their dam for one year
a share of the cost of maintaining a bull for one year
the cost of the calf’s upkeep through weaning
the per-head profit we must make on each calf to stay sustainable.
Our price for cows and mature bulls is calculated similarly, taking into consideration any special value each animal may add to the equation like pregnancy, trained to milk, etc.
Each animal is priced according to their production value. Non-production traits are ignored in determining the value of an animal, so we have no up-charges for traits like A2, polled, color, etc.
We realize that a fair and sustainable Dexter marketplace is extremely important to the preservation of the Dexter breed. Therefore, our participation in the preservation effort as seed stock producers has an affect on the pricing or our animals and the business practices we employ. Not only should a Dexter’s price reflect the incredible value they bring to the agricultural community, but potential buyers should be offered fair prices and ethical dealings. We believe that overpricing or under-pricing Dexters does not benefit the breed or the community that raises them. Basically, we try to do our part to help the Dexter marketplace stay healthy and sustainable by offering excellent value at a fair price.