2000 Cattle Feeders Annual Article

"The future is ours to shape," says TCFA's millennium chairman.

Paul Hitch will fool you. To watch him conduct a meeting in his self-effacing style or to ask him how he describes himself, you might get the impression of a laid-back sort of a person-one who lets the flow go where it will, moving along with the current, taking each bend in the river as it comes.

Dig a little deeper, however, and you'll find an entirely different Paul Hitch. The one with almost boundless energy, the one with an insatiable thirst for knowledge, the one with an intensely strong desire to see a better cattle industry not just for him and other cattle feeders, but for all participants in the marketing chain.

If TCFA's "millennium chairman" is anything, he's complex. But his agenda for TCFA is simple and straightforward-keep cattle feeders in Texas, Oklahoma and New Mexico ahead of the curve so they can effectively deal with the many changes facing cattlemen.

"The main thing I'm going to have on my plate for the coming year is to try to bring a consolidated marketing plan together," he says. TCFA has been considering the idea of group marketing for several years. In Hitch's mind, it's now or never.

"I've talked to a lot of people about consolidated marketing and they ask me if I think it will work," he says. "My answer has always been the same-I think it will. But I can guarantee one thing-if we don't do it, it's guaranteed not to work. I think there will never be a better time than now to put a consolidated marketing program together."

His reasoning is sound. "We've got a reduced number of cattle for sale in the foreseeable future and I think this perhaps puts the seller in a better bargaining position. I think the packers are at least willing to listen, if not immediately embrace, the concept of consolidated marketing to the extent we can make the beef production process work smoother to deliver a more desirable product."

The key, he says, is making the beef production process work better for everybody-"the retained owner, the feedyard, the packer, ultimately for the retailer and the consumer-so that we come out with a better product that hopefully is more efficiently produced. And in the process have the cattle owner share in what I think are going to be some rewards for producing a better product in a more efficient system."

While many of the details have yet to be worked out, Hitch envisions such a system starting with the consumer and working backward. "I think our consolidated effort will be some sort of formula sale. The question is, what do you base the formula on? I think there's a lot of work that could be done to try to base the formula on what the packers sell-what products are moving best at retail."

Current formulas, he notes, are all based on what packers pay in the cash market. "We desperately need to move closer to the consumer and we need to get on the other side of the packing plant and get a formula based on what they're selling meat for."

While consolidated marketing will take up much of Hitch's time as TCFA Chairman, there are other issues he intends to address too. "I'm real concerned about regulations in general, specifically concerned about regulations in the environmental area."

The Association

To that end, he sees TCFA playing an ever-increasing role in the years ahead. "I can see a continuing and unfortunately, I think, an increasing need for TCFA to participate in the lobbying process. I think TCFA has got to lobby not only on behalf of the industry, but it needs to encourage individual members to write letters and make phone calls to present a coordinated front against what I consider to be a fairly hostile regulatory climate at this time."

The fact that TCFA is attempting to midwife the birth of a group marketing process indicates that the Association recognizes its role in the industry will change, Hitch says. And that changing role will manifest itself in many areas.

"Clearly, since we have mandatory price reporting, TCFA will have a role to play in helping develop that process," he says, in addition to an explanatory role in helping members understand how mandatory price reporting will impact the cattle market. Group purchasing of electricity is another example. "I think there are some unexplored avenues as far as amalgamating our purchasing power. There's a big need there and a big opportunity and I think TCFA is admirably positioned to do it."

While one of Hitch's overarching traits is his ability to think ahead of the pack, he also is an appreciative student of history. And he notes that the beginnings of the beef checkoff happened in a TCFA Board of Directors meeting not long after the Association was formed.

"It is essential that we keep the beef checkoff," he stresses. "Without it, our industry is hamstrung and the wolves in chicken clothing won't take long to close in for the kill."

Most cattlemen are aware of the uptick in beef demand that began in 1999. Hitch is quick to say that the checkoff can't take full credit for that trend, but he adds that the odds are very good that checkoff-funded programs have helped.

As an example, he points to the many new beef products that are now on the market, and the continuing stream of new products coming on line every day. "There are some exciting new products out there and being accepted quite happily by consumers," he says, noting that the push behind those new products came from the beef checkoff. And the future is bright because of the convenience they offer consumers. "We could see new products at 20% or 30% or 40% (of market share) quite easily in the next six to eight years," he predicts.

But he cautions cattlemen that the beef industry is a long way from the end zone in the consumer marketing game. "Poultry is prosperous and well entrenched. We've developed a whole bunch of people who are trained to eat chicken and we've got to untrain them."

In Hitch's mind, the beef checkoff is the best vehicle cattlemen have to accomplish that challenge. "We've got to continue to develop new products and make it easier to use the beef that's become fashionable. We've got to continue to tell the story that beef is not only good tasting but good for you. We've got some momentum going for us now and we've got to continue pushing real hard."

TCFA will be a different organization in the future, he predicts, "and it's certainly going to be a different organization than it was 20 years ago. But as far as the need for Texas Cattle Feeders Association? I think the need for TCFA is going to increase."

The Man

Ask Paul Hitch what motivates him and chances are he'll start talking about his family and his employees. He cares deeply about people and it shows in how he approaches the business of running Hitch Enterprises, a diversified cattle feeding, ranching and farming operation headquartered in his hometown of Guymon, Okla.

And it shows in how his employees talk about him. "He's a nice guy-what else is there to say?" one of his long-time employees answers. "He wants to take care of his employees the best he knows how."

Hitch grew up in agriculture, the son of one of the legendary pioneers in cattle feeding-Ladd Hitch. "Although I didn't really appreciate how much fun this business was until I got out of college," he admits. "I went to school at Oklahoma State and got a degree in animal science, then went to Stanford and got a master's in business administration and returned to what was then a growing cattle feeding organization in the summer of 1967."

Hitch says that was a great time for a young man to get into agriculture, particularly cattle feeding, because the industry was new and beef was king. And he's ridden all the ups and downs since-the first being the devastating "Wreck" of the early 70s. He got into the feeding business, he says, just as it was beginning to boom and participated in the whole process. He's seen the industry change and fully expects to see it change more-perhaps significantly-before he steps aside to let his two sons try their hand at what he calls "an endlessly fascinating thing."

His love for the industry and people in it are genuine. But behind the laid-back image that most people see lies what those who know and work with him closely describe as an amazingly intelligent and complex person.

"He's a very critical thinker, a good decision maker and its amazing how he assimilates information," says one of his long-time co-workers. "He's very well read and he's got such a broad base of knowledge that there's hardly a subject that he can't converse on."

Not only does that broad knowledge base make him a good decision maker, those around him say, but it allows him to think outside the box with comfort. "As an industry, we get in some ruts and we tend to think along the same lines. He can think outside the box and because he has this insatiable desire for knowledge, he can look at things from a slightly different perspective."

Hitch describes himself as forward thinker, a trait those around him concur with. "I think what drives him is not necessarily the day-to-day, bottom line part of the business, although he understands all of that very well," says another co-worker. "I think what drives him is the thought that he might be able to change something."

That change, Hitch has learned, comes from both private enterprise and from the associations that represent cattlemen. And his leadership style follows his inherent belief that good people will find good solutions. He rarely pushes his own personal agenda at a Board or Executive Committee meeting. "I'm inclined to seek some sort of conciliatory ground on which everyone can agree," he says. It's kind of like cattle feeding. You find your outliers, the ideas that are too far to the right or left to accommodate, then find someplace in the middle where we can all agree to accomplish something. We all come together and go somewhere, although it's more a group decision than mine about where we're going."

Hitch has no illusions that the future of cattle feeding will be anything like its past. But he's optimistic that the future of cattle feeding will continue to allow entrepreneurs the chance to be successful. "I look at what's happening in the pork industry and I see cattle going down the same road. It doesn't matter whether or not I like the road-that's the way we're traveling and I don't see any way to hold back the tide and say I want to make it be 1967 again."

The future, he says, is ours to shape. "We can't rearrange everything to suit our purposes, but there's a ball that's rolling and we can nudge that ball one way or another and I think we'd be remiss if we didn't do that. I want us to work together to produce a better product and share the rewards. That's going to be the focus. Can I get that done? I'm sure going to try."

Editor's Note-Burt Rutherford is TCFA communications director.

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