Paul Engler

TCFA's Chairman is an old hand at cattle feeding. 

by Burt Rutherford

Paul Engler is a man in a hurry.  Has been, ever since he was a kid pulling a coaster wagon laden with quart jars of fresh milk up and down the streets of the dusty Nebraska town where he grew up.

"Contrary to what a lot of people might think, my father was not in the cattle business," Engler says.  "We lived in a very small town of about 400 people and he had the neighborhood filling station.  However, because he grew up on a farm, he felt it necessary that every young boy should learn how to milk a cow."

And that is how the owner of the world's largest cattle feeding company got his start in the cattle business-with his head pressed into the flank of a milk cow.

"At that particular time in history, everyone was poor," Engler remembers, and his family was no different.  So selling milk to the neighbors brought in some much-needed money.  "He thought that was a pretty good idea, so he kept expanding to where I was milking about 10 cows.  I sold milk by the quart in a little coaster wagon I pulled around delivering to the neighbors."

As times changed and the Engler family's fortunes improved, Paul's father bought a small acreage where they could winter some steers and graze them on summer pasture.  "It was my job to take care of those cattle."

While Engler's start in the cattle business might have been a little inauspicious, the lessons he learned from milking cows, washing milk bottles and keeping his customers happy-neighbor ladies who not only expected but demanded consistent performance-formed the basis of his work ethic and his approach to business and life.

He sums that ethic and approach succinctly-work hard and be totally dedicated to your business and industry.

Paul Engler describes himself as a driven man.  It's a trait he learned early in life.  "My father, despite being the fine man that he was, didn't believe in paying me anything for the work I did," he says.  "I got tired of that, so one day when I was 13, I borrowed the money and bought 100 head of cattle."

Milking cows, taking care of the family's small stocker operation and then owning 100 cows might be enough to distract any young man from his school books.  But Engler wasn't just any young man.  He graduated from high school when he was 15 years old-the age when most youngsters are just beginning their high school years.

Engler figured if he could finish high school at 15, he could be in as much a hurry to finish college.  Which is what Engler did, enrolling at the University of Nebraska in animal husbandry.  And graduating in seven semesters instead of eight.

So, at an age when the biggest decision facing most young men is where to take their Saturday evening date, Paul Engler, with diploma in hand, launched himself into the wider world.  After getting married and starting a family, he taught vocational agriculture and ran some cattle on the side.  "Then I experienced my first serious losses in the cattle business, which forced me to get a full-time job.  I was fortunate to start working for a cattle company, buying feeder cattle and having an excellent teacher."

It was in 1955 that he got his first taste of cattle feeding when he went to work for Louis Dinklage, a man that Engler still refers to as "Mister" and whom he says was his mentor and benefactor. In fact, it was a Dinklage partnership that prompted Engler to first look at the TCFA area for its cattle feeding potential.

"I was in Hereford one day in 1960 weighing up cattle to put them on a train to ship them to Nebraska," Engler recalls.  "While we were getting the cattle ready to load, a train pulled in that was made up in Amarillo bound for the Imperial Valley in California.  And it was 50% milo and 50% feeder cattle."

Engler asked the rancher who sold him the calves why they were exporting the two main resources that could be used to establish a cattle feeding industry in the state.  "He kind of flippantly said it's because we're waiting for someone to come down and show us how to do it."

Engler pondered that comment as he was driving back to Nebraska, and mentioned it to Mr. Dinklage.  "He said absolutely, it will work."

So Engler returned to Texas , bought land, put together a group of investors representing bankers, ranchers and grain people and began building Hereford Feedyard.  However, it wasn't as simple or as smooth as it might seem.  "I assumed all the time that he (Dinklage) would be my partner because we partnered in Nebraska.  But at the last minute, he declined."

The only cattle scheduled to go into the new feedyard were 120 heifers that Engler had on wheat pasture.  So he convened his board, told them they had a feedyard about ready to open and no cattle to fill the pens.  "Every one of my directors, when I hit them up to bring some cattle, said they had never fed cattle.  They thought they'd see how we got along.  And I said we're not going to get along," without any cattle to feed.

Just as the deal looked as if it might crumble beneath him, Dinklage came to Engler's rescue.  "He had a very good reputation in this area and people could see if Louis will do it, it's going to be all right.  It wasn't long before we were building pens like mad to take care of the demand."

With that impetus, Engler continued to grow and expand, adding feedyards and ranches and joining with an oil well servicing company to form a cattle feeding venture called Prochemco.

"Then IBP offered me a very attractive deal to buy my stock in that company and go to work for them."  Engler accepted the offer and spent three years with the packer as vice president in charge of the carcass division, as well as cattle buying, the hide division and by-products.  "But I found I didn't really like the packing business.  So I proceeded to negotiate my way out of a 10-year employment contract.  And I came back down (to Texas) to re-establish myself in cattle feeding."  That was 1975 and that's when Cactus Feeders got its start.

Engler describes himself as a workaholic.  "I think there are a lot of people around who are a lot smarter than I am.  And I've had to compensate for that with a lot of hard work.  I'm not afraid to take a risk and I think that's a very important ingredient if you want to be successful in something as risky as cattle feeding."

He's also not afraid to surround himself with people who are as hard-charging as he is.  "We're very cognizant of the importance of people management," he says.  "You know, when you really come down to it, you can only do so much yourself.  Past that point, it's your ability to manage people."

In a move Engler describes as "one of the better things I ever did in my business career," Cactus Feeders set up an ESOP, or Employee Stock Ownership Plan, about 12 years ago.  "The employees own a little more than 30% of the company.  They are employee-owners, not employees, and that's been very successful.  There is really no substitute for pride of ownership and I firmly believe that."  The Engler family owns the remainder of Cactus Feeders.

Engler visits with each employee annually about the ESOP, and they often ask what they can do for Cactus.  "And I have a standard answer.  I say the way you reward me is when you drive through that gate in the morning, you drive through as an owner, not just an employee.  If you program your mind to think as an owner, you'll reward not only me, but yourself and your fellow employees many, many times over.  And it works."

Role of TCFA

Cattle feeders have faced, and will continue to face, a whole laundry list of challenges.  Without TCFA , Engler believes those issues may well have overwhelmed individual operators.  "And the environmental issue is the best example I know of."

The industry was blessed when it first became established in Texas, he says, because it had the support of city fathers and governmental authorities who could see the long-term economic benefits.  "But now we're past that.  Now we have more people who have come on the scene subsequent to that and they have focused more on the environmental considerations instead of the economic considerations.  And I think you might as well not only get ready for it, but find means to satisfy their concerns."

Enter TCFA.  "TCFA should be complimented for their role in government affairs, both at the federal level and also the state level," he says.  The Association has taken the initiative to not just represent members, but the entire industry, as well as taking an active role in assisting feedyards in monitoring, record keeping and understanding the regulations.  "TCFA provides experts in those areas where a lot of feedyards couldn't afford to do it themselves."

Engler also lauds the Association for its work in keeping members informed on the market.  "I think we all counted our blessings that we had such a strong market reporting system and personnel in place when the government came with Mandatory Price Reporting and all the problems we had with that, " he says.  "We fell back on TCFA for our market news to the point now that we don't pay a lot of attention to the USDA reports.  And thank goodness we had that in place, otherwise it would have been catastrophic when USDA was trying to get Mandatory Price Reporting."

As Chairman, Engler continues to remind members and Directors that TCFA is, in his mind, without question the most successful state cattle organization.  "And with that position, we have to continue to exercise a leadership role in national affairs.  I think that's an obligation-we can't isolate ourselves."

Industry Outlook

In Engler's mind, the past five to 10 years in cattle feeding are indicative of what cattle feeders can expect in the short term future, particularly if the industry continues to resist the changes that are sweeping all sectors of food production.  "I don't think anything's going to change from the standpoint of it being a continuing challenge," he says.  "I think it's going to continue to be more difficult from the standpoint of marketing your cattle and supplying the consumer with the quality of meat that's going to be important in maintaining demand for the product."

Engler is often asked what the industry, and more importantly, individual feeders, can do to remain competitive.  "My advice is to do one of two things-get involved in a strategic alliance with a packer or join a marketing group such as Consolidated Beef Producers," he says.

"I think the small cattle feeder, not doing either one of those, is going to have a very difficult time.  And I'm not a proponent of either one of those, necessarily.  But I think that's the way the industry is going to go."

Everyone seeks a level playing field, he says.  "And to the best of my thinking and knowledge, this is about the only way we're going to get it."

One aspect of the cattle business that has always concerned Engler is the adversarial relationship that exists between segments, particularly between cattle feeders and packers.  "It's one of the few instances that I know where you have an adversarial relationship with your best customer."  While Engler fully agrees that the ultimate beef consumer must always be kept in mind, he says the person who writes you the check is your customer.

"I maintain that we're not going to get where we really want to go with our industry until our adversarial relationships break down and we realize we're after one thing, and that's to provide the consumer with a good, consistent, high quality product and have a more profitable relationship with one another."  

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