Pendergrass Cattle Company
National Stocker Award Winner and Backgrounding Division Winner
Too much death loss, too many sick cattle, too much wear and tear on the cattle and the people taking care of them.
That's why John Frank Pendergrass and his son John Paul, of Charleston, AR, made a wholesale change in their procurement program. Starting four years ago, they began buying calves direct from ranches rather than through auction barns the way they had ever since John Frank can remember.
“We're not bashing the sale barns; they can only market what producers bring them,” John Paul says. “The success we're having in the backgrounding yard hinges upon the efforts put forth by cow-calf producers doing a good job of vaccinating, selecting sires, delivery and all the rest. Our efforts are just building upon their good practices at the cow-calf level.”
In late July, they'd gone 11 loads without losing a single dead to bovine respiratory disease, and the sick pen looked like a ghost town.
“Had they been commingled calves, castrated bulls, I'll bet we'd have at least 40 head in the sick pen, especially with this hot weather. We doctor a few, but they respond,” John Frank says. These days Pendergrass Cattle Co. won't buy calves without knowing their vaccination history.
“The point is the intensity of the work is easier to handle. The expense per pound of gain is tremendously less. We're doing this with five people,” John Paul says. That includes both of them and John Frank's wife Kaye, who handles all the books.
Procuring cattle this way means cattle cost more up front — a premium for cow-calf producers — and calves still must be bought worth the money, but it's paying dividends.
Besides the reduced workload and expense, there's a matter of potential.
“We didn't want to be put in a position where we could only have mediocre productivity,” John Paul says. “I've been fortunate enough to have a dad who is motivated, willing to try new things, and wanted to grow and do better so that I had the opportunity to come back. I want my kids to have that same opportunity.”
John Paul is the sixth generation on the ranch.
Starting the future
Though stocker cattle were always a focal point, John Frank began growing the business in earnest when he took over management in 1972. A decade later — five years after John Paul returned home — they built a starter yard here that's since served as the fulcrum of operation flexibility and growth.
“The starter yards give us the flexibility to run cattle on our own grass, on someone else's grass, on grain pasture, or to take them straight to the feedyard, so it's really the hitch pin of our whole operation,” John Paul says. In effect, it's also enabled them to run three sets of cattle on their own ground each year rather than one like they used to.
“Not all of managing risk is managing price risk,” points out John Paul. “Being able and prepared to move cattle into another production phase is part of it, too. Having that flexibility, that's another benefit of the alliances we've established.”
For instance, several years ago the Pendergrasses established a close working relationship with a Flint Hills, KS, ranch, so close it really functions as more of a partnership. They run a number of cattle though an early-season, double-stock program, normally shipping off grass in July.
“That's had as substantial an impact on our operation as anything in the last 10 years,” John Paul says. It's allowed them to expand numbers and exploit early-season grasses in Arkansas with some heavy feeders to market from the home ranch in June and July.
It's the feedmill John Frank built here 25 years ago that makes the starter yard and subsequent flexibility possible. As ingredient costs increase, the mill's value grows as well. They figure the cost of the feed they mix today is 40% less ($70/ton less) than if they bought it mixed.
Reliable expansion is key
“Since I came back home, I've always felt that if we were going to grow and expand we had to either do it down the chain or up the chain. We didn't feel we could stand a substantial investment in buying more land to expand that way. So, we integrated up the chain into cattle feeding,” John Paul says. “At that time, buying into a feedyard cost less than buying another section of land. And we felt like if it turned out to be a mistake, it would be one we could overcome more easily than if we made a mistake buying land.”
Today, the feedyards they have interest in are also part of Innovative Cattle Services and AZTX Cattle Co., a collective of independent yards that work together to offer customers a broader range of services.
“Those feedyard alliances have also offered us the chance to sell feeder cattle to customers of the yards,” John Frank says. “Our alliances have been good to us. You can't ask for a better group of people to be in business with.”
Combine that flexibility with their new procurement program and they have even more options. Though unthinkable to many stocker operators, the Pendergrasses buy a fair volume of their cattle well in advance of when they need them. In late July, they already had cattle contracted through October.
“That's another way to manage market risk,” John Paul says. “You don't have to do it all on the board, or all at one time.”
Finding new ways, more effective ways to build feeder cattle has been both necessity and driving philosophy at Pendergrass Cattle Co.
“To a certain extent, we've stayed with what we know, growing grass and cattle, and we've never ventured very far from it,” John Frank says. “If we continue with these high grain prices, I think there is all kinds of opportunity to grow feeder calves.”
Recognizing the best
The National Stocker Award (NSA) was developed by BEEF and Elanco Animal Health to recognize stocker-cattle operators and cattle backgrounders for the vital role they play to ensure consumers have quality beef available to them every day of the year.
The overall winner receives $10,000 in cash sponsored by Elanco, as well as expense-paid trips to the National Cattlemen's Beef Association Annual Convention and the BEEF Quality Summit. The other two division winners receive $2,500 in cash, also sponsored by Elanco.
The NSA competition is open to producers who derive at least half of their annual cattle-based income from their stocker and backgrounding operations.