Buffett on cattle ranching business:
Simple logic but often overlooked, most comodity businesses are price takers, specially ones with low entre barrie.
Maybe thats why Wellard been trading for decades but did not expand much in the livestock production segment.
Munger has clearly done the study in cattle ranching business before, and came to a conclusion: Businesses that can’t set their own pricing, are tough to get ahead when its hard to differentiate your product from the rest.
Farmers may get couple good years in 10 years and those are bad years for wellard, but it can still source cattle from whereelse, if not for the debt issue due to bad timing for expansion, it could make profit in even toughest period...
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