Cattle Feeders Hall of Fame: Paul Engler

The Cattle Feeders Hall of Fame is a new program, launched this year to celebrate the rich traditions of the cattle-feeding industry and recognize individ-uals who have devoted their careers to pre-serving its mission and improving production practices. Early this spring, a committee nominated a handful of deserving individuals, and cattle feeders from around the country voted for their top two.

Intervet/Schering-Plough Animal Health sponsors the program and plans to hold a reception in June to formally announce the hall's first two inductees: Paul Engler of Cactus Feeders Inc., Amarillo, Texas, and the late W.D. Farr of Greeley, Colo.

Drovers is proud to present profiles of the inductees, offering a glimpse at the business strategies that contributed to their long-term success.

Texas-sized vision

Paul Engler's resume is full of some of the most notable accomplishments in the cattle-feeding industry. He's been showered with accolades and is considered a legend in his own time. But when you visit with Engler you meet a man who still embraces old-fashioned values and the idea that a handshake is as good as a contract.

 It is for those reasons that Engler has been nominated to be one of the first inductees into the newly created Cattle Feeders Hall of Fame. A native of Nebraska, he started working at the age of 9 at his father's filling station and bought his first set of cattle when he was 12. Engler's ambitions didn't stop there, as he started college at the University of Nebraska at the age of 15 and paid his tuition through his cattle sales. After that, there was no stopping him. But Engler is quick to give credit to others who helped him along the way, most notably Louis Dinklage, an industry legend in his own right, who really got Engler started in the cattle-feeding business.

It's a story that has been told many times. While still working for Dinklage in the late 1950s, Engler was taking delivery on some feeder cattle in Texas and watched a train loaded with cattle and milo headed to California's Imperial Valley. "That's when the idea germinated for me that there was no reason to ship cattle and grain out of the state when it could be done right there," Engler says. "I went back to Mr. Dinklage and asked him what he thought, and he agreed that the potential was there." Dinklage gave Engler his blessing to start looking for a likely location to build a new feedyard in Texas.

That location was some land near Hereford. Once the property had been purchased, Dinklage had a change of heart and decided not to partner with Engler on the feedlot, so he had to scramble to find investors. "Once the lot was complete, we didn't have enough funding to buy cattle and had to depend on custom feeding for income; however, I couldn't line up any customers," Engler says. He had 120 of his own calves that were grazing wheat pasture and that was it, until an old customer of Dinklage's called him and said he had some steers ready to sell. Engler passed the message along to his former boss, and instead of feeding the cattle in Nebraska, Dinklage shipped them to Engler's yard and reserved additional pens for more cattle. "When people saw that Mr. Dinklage was feeding cattle with us that made a big difference in lining up customers. He really came to my rescue."

It was that experience that cemented for Engler just how important building solid relationships and a good reputation were to the ultimate success of his operation.

Engler continued operating the feedlot in Hereford, Texas, until he sold out his interest to IBP. As part of the agreement, he went to work for the packer and served as the head of its carcass division for three years. During that time he initiated the establishment and design of the IBP Beef Slaughter Plant in Amarillo, which at the time was the largest in the country. "IBP was very good to me, but I wanted to go back to feeding cattle."

The year was 1975 and Cactus Feeders Inc. was born. But what is it about Cactus, which is now the largest privately owned fed-cattle operation in the United States, that makes it a leader in the industry besides its sheer size? It is really Engler and his commitment to focusing on strategies that have helped the company survive and thrive for almost 35 years.

"Early on, I was very cognizant of the ‘people" aspect of the feedlot business," Engler says. "We have to employ people that recognize that this isn't a factory we are dealing with biology and people have to like the cattle that are in their care." To help encourage his employees to take more pride in their jobs, Engler developed an employee stock ownership plan in 1990, a practice that was really unheard of in the industry.

Engler tells a story about an employee who was in his 70s when the program was first introduced. "That old boy told me he had been punching cattle all his life, but he had never owned any until then. That was when I knew that offering the ESOP had been a good decision." Engler says that the ownership plan has encouraged the approximately 500 employees that work at 11 Cactus operations throughout the Texas Panhandle and Southwest Kansas to think like they are working on their own operation. "When our employees think like that, they reward themselves, they reward me and they reward the entire company."

When the history books look back at Engler's career in the cattle industry, it probably won't be his legacy as the pioneer of large-scale cattle feeding that will gain the most recognition, but his focus on value-based marketing. During his days working with IBP, Engler recognized that not all carcasses were created equal and, as a result, were valued differently. Unfortunately, the fed-cattle markets of the past paid on averages and on a live basis, and only rewarded the lowest common denominator. "It made us as an industry extremely uncompetitive," Engler says. "That's why I have always looked for ways to get paid for what you produce. It only makes sense for the better cattle to get better money." As a result, Engler pushed for fed cattle to be valued based on their carcass merit. While Engler has freely admitted that formula-based marketing is not always perfect, it is a first step in receiving true value for what you produce. By sheer will, Engler changed the way that cattle are valued, thus creating a better end-product.

That commitment to selling quality cattle also led Engler and Cactus Feeders to focus on the cattle they procure and to create more opportunities for producers. The company works with people interested in retaining ownership but also willingly shares performance information with those producers who do not feed cattle on contract. "When the industry was selling fed cattle on a live basis, there was a tradition to not share information with producers, as the cattle buyer felt like he had ‘paid" for knowing how those cattle performed," Engler says. "I think that's short-sighted and we should have transparency between the various segments. There are times when it doesn't make sense for a producer to retain ownership, and I can't in good conscience tell him to do otherwise. But I also want him to continue to improve his cattle and create a better product, so we're happy to pass information back."

The company's size has its advantages in economies of scale; however, Engler says it also has its limitations when trying to source cattle. "When runs are light, we are sometimes forced into a market. Working with producers helps offset some of those challenges," Engler says.

Cattle feeding is a risky business, and Engler feels it's unique compared to other industries for that reason. "We have to identify all of the potential risks and create strategies to minimize them," Engler says. "That has allowed us to stay in business during some real downturns, including the one we're in now." But for Engler, the most important part of his strategies for success can be traced back to some of his earliest experiences when all it took was a handshake to cement a deal. "Our reputation is the most valuable asset that we have. You really can't put a price on that."