Building a vertically-aligned production system connecting cattlemen with consumers to provide a superior beef eating experience was James Herring’s vision. Today, through that vision, Friona Industries, the company Herring led for a quarter-century, operates six state-of-the-art feedyards that supply 1.3 million process-verified cattle per year to Cargill Meat Solutions for branded products sold to seven retailers in nearly 3,000 U.S. stores.
“Beef industry success stories in the future,” Herring says, “will be about entrepreneurs who create practical, efficient, cost-relevant production systems that deliver consistent quality and quantity year-round, and provide maximum protection to capital and risk. Those producers, no matter in what segment, will display entrepreneurial curiosity, technological innovation, situational awareness, decisiveness and mission focus.”
A native of Amarillo, Texas, Herring earned a degree in finance from the University of Texas, and an MBA from Harvard in 1974. Between earning the two degrees, Herring’s career in the beef industry began as an understudy to legendary Texas oilman T. Boone Pickens.
“The cattle feeding industry was booming in the 1960s,” Herring says. “I got a job right out of college as Boone’s administrative assistant, carrying his bags around. That was very exciting, and I learned a lot from him.”
Pickens became interested in the cattle business and diversified his Mesa Petroleum interests by launching Mesa Agro with the purchase of two feedyards. Herring left Mesa to earn his MBA, but returned in 1974, working for Pickens until he sold Mesa Agro in 1975.
Herring eventually left Mesa and ventured into the stocker business, where, he says, “I made a killing on my first set of cattle, and that’s the kiss of death.” In other words, Herring was hooked on the cattle business.
With his enthusiasm for the industry and his business acumen, Herring grew his stocker operation in the early 1980s to a peak of 54,000-head grazing 1.2 million acres from California to Texas.
“That was the golden-age of the cattle industry,” he remembers. “A cattleman could buy cattle cheap, put them out on grass relatively cheap and hedge them against the October Feeder futures contract. It was a fabulous time.”
With Change Comes Opportunity
Changes to the U.S. tax code in the mid-1980s and an evolving U.S. cattle industry significantly altered Herring’s stocker business model. A new opportunity opened, however, as he was recruited by a Dallas businessman to help sell his fledgling company—Friona Industries.
Rather than sell the company, he thought, what if “I created an 11-point business plan to turn the company around? And if I did, could I have an equity interest in Friona?”
The proposal was accepted, and Herring embarked on his 25-year stint as president and CEO of Friona Industries in 1989. It was at Friona that Herring’s visionary approach to the cattle industry created tremendous benefits and opportunities for ranchers and helped revolutionize the beef industry. Along the way he earned the respect, admiration and affection of his peers and co-workers. During his tenure as CEO, Friona became the third-largest cattle
feeding company in the U.S., with six feedlots in the Texas Panhandle with a capacity of 440,000 head.
Herring’s vision for Friona went far beyond previous feedyard models that sought to buy cheap cattle, manage their costs and haggle with packers for price on finished cattle. He believed the industry’s future was in alignment with other segments.
“We needed to create a better product,” he says, “and the way to do that is to build alignment in the business that takes five different segments of the cattle industry and ties them together so you can create a consistent product.”
Herring describes alignment objectives he envisions for the five-segments:
- The cow-calf segment must respond and align with upstream demands for more consistent and valuable genetics.
- The stocker segment must create stable and predictable relationships that will allow forward pricing and consistent year-round demand.
- Feeders must align with the processing industry to create a predictable market that allows timely harvest at a predetermined, consistent formula for value.
- Packers must successfully create a predictable interface with the consumer through an effective and consistent relationship with the retail establishment.
- Finally, of course, all of us in the beef trade will have to focus on thoughtful, consistent delivery of a predictable eating experience to our eventual customer.
Friona Industries’ model for success paid “close attention to genetic production protocol, pre- and postharvest platforms to create and deliver a consistent beef product,” Herring says. “Today, Friona produces about 5% of the U.S. beef supply, and the model represents what I believe to be the future of the business, producing a more consistent product. I spent my whole career focusing on that.”
With a 40-year career in the beef industry as his guide, Herring believes beef has a bright future, but remains convinced alignment of the five segments is crucial.
“Huge capital requirements, monstrous volatility, aging demographics of our producers and our old Achilles’ heel—the impossibility of an easy, seamless, vertically aligned production system—will all contribute to constant pressure throughout the beef system, with its five distinct segments for innovation, efficiency, product quality and consistent delivery.”
While such vision led to the success of Friona Industries, Herring’s dedication also drew the attention of other industry leaders.
“When most people saw a road block, James saw an opportunity,” says CattleFax CEO Randy Blach. “I think we’ll look back over the next decades and recognize just how far ahead of his time he really was.”
Ross Wilson, president and CEO of the Texas Cattle Feeders Association says, “James is a visionary businessman with an uncanny ability to foresee and capitalize on opportunities in the beef industry, many which have not been easy to achieve.”
In addition to his induction into the Cattle Feeders Hall of Fame, Herring was presented the Vision Award for 2008 by the National Cattlemen’s Beef Association Foundation, and in 2014, he received the National Ranching Heritage Foundation’s Golden Spur award.
Herring is a past president of the Texas Cattle Feeders Association, former director and member of the executive committee of the National Cattlemen’s Beef Association, and past chairman of CattleFax. He is past chairman of the Cal Farley’s Boy’s Ranch Foundation Board of Trustees and is past chairman of the Amarillo Area Foundation. In 2004, he was appointed to the Texas Water Development Board and was named its chairman in 2008 by former Governor Rick Perry.
Herring and his wife, Margaret, will celebrate their 50th wedding anniversary in 2019. Together they have two children, Edward and Rebecca, and seven grandchildren.
Cattle Feeders Hall of Fame
The Cattle Feeders Hall of Fame was launched in 2009 to celebrate the rich traditions of the cattle-feeding industry and recognize individuals who have devoted their careers to producing safe, quality beef and improving production practices. Merck Animal Health, Osborn and Barr, and Drovers are the founding partners. A reception in January was held to formally announce the 2019 inductees: James Herring and Bill Foxley.