Editor’s note: BEEF magazine’s serialization of Kenneth Eng’s industry history and personal memoir, entitled “Started Small & Just Got Lucky,” continues with the consulting nutritionist’s thoughts and recollections on the decade of the 1990s. The book debuts later this month at the Dr. Kenneth & Caroline McDonald Eng Foundation research symposium, set for Sept. 18-19 in San Antonio, TX, click here for more information on the symposium and ordering the book.
CHAPTER 25: The 1990s – Building a yearling business and downsizing
In 1990, my wife Caroline was becoming more involved in my business and we decided to concentrate on running yearlings. We usually ran 8,000 to 10,000 each year in Texas, Oklahoma and New Mexico. We bought small calves (3 to 4 weights) and backgrounded them at Mason County Feeders in Texas and other yards nearby. We grazed them on either wheat pasture or summer grass.
Donny Stockbridge from Mason Cattle Company bought a lot of my calves, and while they weren’t the prettiest, they had a good outcome. We fed the “tail end” we didn’t sell as yearlings. Normally, we fed a couple of thousand head. Although our feedlot cattle were the “plainer” end, they performed well. I delivered a lot of them on the fat futures until they got picky about how cattle looked. Their yield and grade was great, but they didn’t fit the picture of what some thought a deliverable animal should look like.
Delivering cattle on the futures could be aggravating. We delivered one group to the packing plant at Dumas, TX, and they cut out an outstanding steer and called it a bull. It had a Mexican brand, so I knew it shouldn’t be a bull and I told the grader he just had a big cod full of fat. The grader told me how ignorant I was, and I could see I might win the battle, but lose the war. I said, “Go ahead and kill him separately, but if you would, send me the testicles.” There were none. The funny part of this story is they screwed up on the carcass weight and the animal yielded 75% and brought a big premium. Once again, it’s not a perfect world, but it’s good to be lucky.
Our main bank was Farm Credit West in Paso Robles, CA, and occasionally the bankers would come to check the pasture cattle. This was a bigger chore than they thought.
The banker, John Goldsmith, would always tell Caroline, “If you wanted to screw us, you could figure a way so I don’t know why I bother looking.”
Caroline said, “John you’re right, but we’d never mistreat you,” and that was the end of that story.
We sold a lot of our cattle on the Superior Video held every other Friday in Fort Worth in the old stockyards district. Caroline and I both loved the area. She loved it especially because there was a Leddy’s western store next door. John Goldsmith and Bob Cox from California Farm Credit went with us to one of the videos where we had several lots of cattle for sale. We stayed and ate at the Stockyards Hotel, which is a real treat, if you’ve never done it. Also the White Elephant Saloon across the street can be pretty entertaining and just as western as it was in the old trail driver days.
The next day at the video, it occurred to Goldsmith this was a good way to check our inventory figures. John said, “I don’t need to go to the pastures, I’ll just go to the video at Fort Worth to get your inventory.” John liked eating and sleeping at the Stockyards Hotel and partying at the White Elephant better than bumping across country in a pickup.
Selling beef and buying boots
Caroline and I both loved going to the Superior Auctions in Fort Worth and we often spent 2-3 days there. We sold a lot of yearlings and calves on their video and they treated us well. Also it was a chance to meet old friends and to eat at great restaurants and bars. For Caroline, it was a western wear shopper’s paradise. Leddy’s Western store was next door and was Caroline’s favorite, but she also found other stores in which to spend our money. One summer evening we got to the Stockyards Hotel after the stores closed, but a pair of boots in the window at Leddy’s caught Caroline’s eye. I said. “If we have a good sale tomorrow, and they’re your size, buy them.”
She came into the auction just in time to watch our cattle sell. She told me she bought the boots, and proceeded to give me a blow-by-blow account of the purchase. First of all, they were a pair of custom-made boots, but the customer who ordered them never showed up to claim the finished boots. Second, they were exactly her size, which was a sure sign that God wanted her to have them. Finally, she was able to get $150 off of the purchase price so it was a “win-win” situation.
However, the purchase price was still $850. I told her, “God must have also known our cattle would sell well.” I’ve still got the rose-colored boots, and I guess I’m looking for a Cinderella they might fit. In reality, I suspect I’ll take the boots to my grave because I doubt I’ll find the foot size or the personality to match the boots.
Caroline also loved to buy purses, and would buy a purse at each new location where we stayed. I put all the purses together after she died, and I believe there were 125. It’s easy to find friends that fit a purse, so I’ve only got about 25 left. One of them is a Versace pink purse that she bought on our last trip to New York. She called to say she was looking at an expensive, but “one of a kind” pink purse. It looked like her and she loved it! So I said, “Buy it.” Turns out it cost $2,000. It was worth every penny because she carried that purse every day the rest of her life through pastures, ballrooms and everywhere. She loved it, so it was money well spent.
Caroline was actually a very discriminate shopper and most items she purchased never went out of style. Abe Turgeon, his wife Ericka, Caroline and I were at a beach party in Hawaii one night and Ericka told Caroline she loved her new gown which was drop-dead gorgeous. Caroline informed her, “Ericka, this is not a new gown.” She then asked Ericka how old she was. Caroline said “Ericka, this gown is five years older than you are.”
Colorful characters and friends
Buzz Williams, a Superior representative from Southern Colorado, repped a lot of our cattle regardless of the location. He’s a good rep who did his best to take care of both the buyers and sellers. He and I would usually sort the cattle together, and we had a few disagreements, but Caroline would help settle them.
My favorite Buzz Williams story took place when we had several loads of cattle to be delivered on a Monday from a rough ranch near Tucumcari, NM. The owner of the ranch called Buzz Sunday night and said he had the cattle gathered, which was no small job, and he’d be ready at daybreak. Buzz had just had back surgery and was high on drugs. He told the rancher, the delivery was not until next week and turn the cattle back out. What a wreck. By the next morning when Buzz figured out what he had done, Caroline and I and the rancher were ready to put him back in the hospital. We gathered the cattle again and rescheduled delivery. From that time on, I figured Buzz owed me one.
Buzz, Caroline and I traveled a lot of pickup miles together to various ranches, videoing and shipping cattle. Buzz was a lot of fun and always said “Kenneth, you don’t know how lucky you are to have Caroline as a wife and partner.” Caroline and I would often argue about how to sort and market the cattle, but after a few drinks we would go to bed happy. Buzz was wrong, I did know how lucky I was.
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Tommy Gibson from Eastern Cattle Company bought most our cattle either direct or on the video. I know he ran into a lot of trouble later and I’m truly sad for all concerned. Fortunately, our experience with Tommy was always the best and that’s how I’ll remember him. As an illustration, one year he bought several thousand cattle from us on summer pasture in northeastern New Mexico. We had a late winter snowstorm, and when it came time to gather the cattle, we were several hundred short.
I told Tommy, “I think the cattle are there, we just can’t find them.”
He said, “Gather whatever you can, and I’ll wait for the rest.”
We were running most of these cattle with Benny Gilbert. He called me that Easter Sunday and said, “Doc, it’s not a pretty picture. We’re in a hell of a blizzard and we’ve got cattle drifting all over northern New Mexico and southern Colorado.” He further said, “We’ll do our best to gather them this fall.”
I knew he meant it. In the meantime, he asked if I would partner with him to lease a ranch by Canyon, CO. Benny basically did everything himself.
“Benny,” I told him, “you’re going to kill yourself working this hard and driving so many miles. Let’s leave that ranch alone.”
Unfortunately, he leased the ranch, and in the fall after we had started shipping our cattle, he drove up there on Saturday night and back Sunday morning. On the drive back, he missed a mountain curve and “bought the farm.” Caroline and I both loved Benny, and Caroline did most of his bookkeeping. Benny was a hell of a cowboy who some said had a drinking problem so he stayed at the ranch. I never saw him take a drink and he really worked 24/7. We would go once a month to check our cattle and Caroline would check his figures and pay him at the end of each month.
In addition to running yearling operations, Benny had a great string of Hancock strawberry roan quarter horses that were flat out beautiful. Caroline and I had a couple picked out to take home that fall, but after Benny was killed, that went by the wayside. Another fascinating story about Benny’s horse business is he had problems with the bears coming down from the mountains and running his horses through the fences near his headquarters. Somebody told him if he got hogs, they would keep the bears away. He bought a group of Hampshire hogs and let them run wild around the area. He said, “I don’t know if it was because the horses got used to the hogs or the bears didn’t like the hogs,” but he had no longer had bear problems.
However, the hog population got totally out of hand, and because it was a closed herd they continued to reproduce straight Hampshire’s except for one difference. Natural selection was taking place and each generation would have longer snouts. Picture it, perfectly colored Hampshires with snouts 6-10 in. long. The end of the story was Benny got tired of the pigs and decided to take them to Guymon, OK, to the hog slaughter plant. I don’t remember the number, but it was enough to buy a new Ford pickup. I would bet if you check the back country 40-60 miles north of Clayton, you might still find a few Hampshire hogs rooting around.
When Benny was killed, Caroline and I were both devastated. To make matters worse, his family had no idea he was running so many cattle for us. Caroline said, “Why do you think I’m writing him the checks every month?”
After we had gathered the cattle nearby, we were about 300 short. We hired a couple of cowboys with dogs and they took off for the mountains. They found 300 to 400 more cattle that filled out our count. However, some of them were actually cattle that had been lost a year or two before. Age was not a big deal, so it all ended well.
You’ve heard of outfits that are snake bit, and the Colorado ranch that Benny leased was one of those places. I think it belonged to a former major league relief pitcher who was losing it. Whoever took it over was short on help and Vic Ogle, Benny Gilbert’s main man, went up to gather the last of the cattle. There was a car accident near the ranch, in which an elderly couple had hit the cattle trailer and were killed. Shortly thereafter, the fellow managing the ranch was kicked in the head and killed while shoeing horses. Obviously, the place was bad news, and I was glad I declined to become involved. Nonetheless, Benny Gilbert had a nice family, and will remain one of my all-time favorite people.
Most of the country cattle we sold to Tommy Gibson were received by a rep from Amarillo, TX. He was a good guy and I liked him, but if you gave him four head of cattle, he would sort them four ways. We had a few disagreements but they worked out. The big problem was that he often wouldn’t know where the cattle were to be shipped until we got them sorted and ready to load.
Once, near Wagon Mound, NM, I had sold Tommy four loads of cattle, and we sorted them four different ways. I told him that was alright except we were going to weigh them up first for the pay weight. They were a pretty even group of cattle, but in spite of that, the rep insisted on lots of sorting. We finished and were waiting for the trucks, but they never arrived so we went to lunch. Then Tommy’s man reported that he only had a place for two loads today, and he’ll take the next two loads tomorrow. I said, “That’s fine, but write me a check for all of them and take whichever loads you want.” We went back to the pens and he couldn’t remember which loads were which, so all the sorting was for nothing. I got really pissed off, and Caroline warned me, “Don’t mistreat him, we’ll need him again someday.” Once again, she was right.
A year later, Tommy’s same man was receiving about 2,000 cattle from us off wheat near Vernon, TX. The morning started out well on the first couple of loads. I decided they didn’t need me and went to a feedlot near Mason. Everything went to hell shortly thereafter.
Caroline called me later and said, “This is the sorriest bunch of cowboys I’ve ever seen. We’re taking all the cattle into a nearby feedyard for sorting.”
I said, “Whatever—but make sure we adjust the pay weight, and don’t let the rep mistreat you.”
She told me, “I’m not worried about him mistreating me. But it’s so damn hot. It’s 110°, and he’s got a bad heart. I’m afraid he’s going to die. You know we’ve got these cattle sold $10/cwt. over the market, so we need to go easy on him.”
“Do whatever it takes,” I said, “even if you have to give him mouth-to-mouth resuscitation or use a hot shot. Just make sure he gets the cattle delivered.”
Caroline said, “I can do the hot shot deal but the mouth-to-mouth is out of the question.”
Because we were running so many cattle in different areas of Texas and Oklahoma, sometimes Caroline and I would split up in the morning and ship cattle separately. I never had to worry about Caroline doing a good job because the truck drivers and cowboys were always on her side. One time we had a group of cows west of Wichita Falls, TX. The person we leased the land from claimed to have about twice the acres as he had. I think he actually believed he was going to get the extra land leased, but he didn’t. I told him to either get more land or we were moving the cows.
He said, “Come get them.” I told him, “We will be there tomorrow.”
Caroline called Larry Ogle’s wife, who ran their trucking company, and said, “I need eight trucks tomorrow morning.” She said, “They’ll be there.”
We were staying at the Holiday Inn in Wichita Falls, and I was shipping wheat pasture cattle the next morning at Burkburnett, TX. I told Caroline to go over and get those cows shipped, but stay away from the guy we leased from. He’s got a reputation of being moody and unpredictable when push comes to shove.
I told her, “Keep a cowboy or truck driver close by.”
We met later that night at the Holiday Inn bar, and I asked her if she had any trouble. She replied “No. In fact, the fellow turned out to be real nice. He and I talked for several hours, but I kept your pistol on the car seat where he could see it.”
I said, “Caroline, that’s a 9mm semi-automatic, and you don’t know how to handle it.”
She responded, “I need to talk to you about that. Would you go out and check it, it’s still on the front seat.”
I went to the car and there was a 9mm Smith & Wesson on full cock with a shell in the chamber. I came back and read her the riot act.
She explained, “That’s why I wanted you to check it out.”
What else can you say about a blonde? Bottom line, we got the cows gathered and moved without bloodshed. Caroline was not only smart and tough, but she was also absolutely fearless. This made everyone from cowboys and truck drivers to managers and CEOs respect her.
The best thing about our cattle business in the ’90s was that Caroline and I could do it together or separately if need be. Often we would get up early, head our separate ways and meet again that night. I never worried for a moment about Caroline handling her end. Occasionally I suspect she’d do a better job than me.
There was a fellow near Wichita Falls called “Wildhorse” who ran a lot of wheat pasture cattle for us. He did a pretty fair job, but he was well named and he hated paperwork. That was another place where Caroline took care of all the charges and billings. He’d come into the bar at the Wichita Falls Holiday Inn with a shirt pocket full of receipts and ask Caroline to sort them out.
The first two days we were shipping, he showed up about 1½ hours late; meanwhile, we had trucks waiting. Everyone knew the stuff was going to hit the fan, and at the end of the second day, I was prepared for a “come to Jesus talk” with Wildhorse. However, Caroline got a hold of him first and led him behind a horse trailer and put the fear of God in him. The last day, the cattle were gathered on time. Had I tried that, Wildhorse would have probably buried me.
Industry advancements in the ’90s
Insofar as scientific advancements go, the ’90s were a pretty slow time. We did get the first estrogen-trenbolone combination implant cleared in the early ’90s and also another ionophore (Catalyst). Catalyst was probably a better ionophore than given credit, but its impact on consumption (or lack thereof) made it more difficult for some nutritionists to evaluate. I’ve always thought this was an underused product.
Feed prices spiked higher again in the mid-’90s, and once again cattle lost a lot of money. Overall, the decades of the 1980s and ’90s were about breakeven for the feedlot cattle and fairly profitable for stocker operations.
In some areas, there was a shift in the profit center in the feedlot business. The feedlot rather than the cattle became the profit center. This had a real impact on some of the larger feedlot operations and made custom feeding less attractive to investors.
The other big change in the late-’90s and 2000 was the widespread but ill-fated feedlot expansion in the face of a declining herd. The result was a lot of excess feedlot capacity that is still haunting us. It has been estimated that we have 25-35% excess feedlot capacity, and we continue to pay for it in many ways. This is not a popular subject, but it is an unfortunate example of ego getting the best of our judgment. The bottom line is that bigger isn’t necessarily better.
Part of this was the result of new players in the industry. The big new gorilla in the room was Koch Industries, which bought and expanded numerous feedyards in the Texas Panhandle. They also grazed several thousand wheat pasture cattle and were active in some of the same areas where Caroline and I operated. They had big plans, big money and big egos, but that wasn’t enough to guarantee success. After about four years, they quickly exited the industry and it’s rumored their losses totaled three-quarters of a billion dollars. They were not the first energy company to try the cattle business, and in general, energy companies have not done well in the cattle industry.
As we got busier with our own cattle in the ’90s, I continued to downsize my consulting pace. Sometimes this was a painful choice, and not popular with Caroline. When I gave up a number of my Northwest clients including Agri Beef and the Rebholtz family, Caroline was really aggravated with me. The Rebholtz patriarch, Bob, had a rare form of cancer, and he died at a young age. Their operation included three feedlots. Frankly, it was more than I could handle with our other personal projects. I told Caroline I needed to give this account up and turn it over to Bill Dicke. She was annoyed with both Bill and I.
The Rebholtz family members are not only successful people, but good people and good friends. Caroline was especially fond of their youngest boy. Paul spent a week with us at our New Mexico ranch. His youthful enthusiasm was a joy to behold. Unfortunately, he was killed in a plane crash shortly thereafter, which left Robert, Jr. in charge of the operation. They’re still good friends with very successful operations, and I’m proud of them.
As we approached 2000, I told Caroline we were going to shift our emphasis to cow-calf operations, and I wanted to further downsize the consulting business. She went along with the idea, and the first decade of the new century treated us well.
I’ve found it somewhat amusing that many cattle people continued to refer to me as a feedlot consultant. Except for special clients, I had substantially decreased my consulting activities in the 1990s and early 2000. This was not due to my lack of interest in consulting, but rather because of my other priorities—including cows and land. In spite of my downsized consulting activity, I still love the business and the communication with my peers. A day seldom goes by when I don’t have several calls from consultants, feedyards, associated businesses, and so forth. I would be bored without them. Like the comparison of ham and the egg, it’s great to be involved, but not committed.
The end of the century, 1999, ended on a profitable note for all segments of the cattle industry even though the ’80s and ’90s were, on average, essentially a breakeven for the feedlot industry. Stocker operators fared a little better, and cow-calf profits were up and down. At the end of the ’90s, many in the industry were still talking about the 10-year cow cycle, but to the close observer, it was obvious times were changing.
Doing It Closer to Home
By K. S. Eng
Sonny was a man of passion
He’d been that way all his life
That was his style and his fashion
He wore out several girls and a wife
He loved those big country ranches
Didn’t want anything small like a farm
He always loved taking chances
He was reckless, that was his charm
When a market wreck wiped him out
You didn’t see him cry or moan
He said “I still know what I’m about
I’ll just do things closer to home”
Once in a fit of passion
He married a trophy wife
She liked the city and high fashion
Soon he longed for the country life
He pursued worldly pleasure and joys
And he coveted lots of space
Then he decided he had enough toys
And yearned for a smaller place
Bright lights and gold lost their shine
And he begin to slow his pace
Peace and love was his new
As he prepared for the final race
He was relaxed when I passed through
I said “I hear you no longer roam”
He said “I still do just what I want to
I’m just doing it closer to home”
Next week: 2000-2010 – A new millennium and a new direction
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