Beef State: Jack & John Maddux

Feeding cattle has been a Maddux family business since Woodrow Wilson was president, but John Maddux wonders how long that can continue, given burgeoning environmental regulations and dwindling irrigation potential for area farmers who provide reasonably priced grain.

(Pictured to the right are Jack Maddux, right, and John Maddux, left.)

Maddux Family Has Been Feeding Calves At Home Ever Since 1918
By Colleen Schreiber [Livestock Weekly, November 6, 2003 -- used with permission of the publisher]

WAUNETA, Neb. — "If I ever make it to heaven, I know the good Lord is going to be feeding steers."

That was just one of a handful of popular sayings coined by the late rancher/feeder Glen Maddux. Maddux was one of the earliest cattle feeders in Chase County, Nebraska. He began feeding cattle on the family ranch in 1918, and the family has been at it every day since.

Today the 3000-head capacity feedyard is run by Glen’s son and grandson, Jack and John Maddux. They feed all of their home-raised calves here plus 1200 head or so of Mexican steers that come off grass beginning in early September. And because drouth has forced them to cut back on cow numbers, the father and son team also buys a few natives to feed at home as well. John also feeds at several commercial yards in Kansas and Nebraska.

"There have only been three or four good years since 1918," Jack Maddux jokingly insists, "but we keep doing it because it’s been the enterprise that ultimately helped us expand."

In addition to their 3000-head feedyard, Maddux Cattle Company encompasses a 2500 head cow-calf operation on some 40,000 acres of deeded and leased land in the Sandhills of Nebraska.

John says his grandfather was a "value-added kind of guy." It was because of that approach to the cattle business that he also imparted two other philosophies to his son Jack — "never ever sell a bawling calf and never ever sell a bale of hay."

"He thought there was value to be added by retaining ownership in his cattle," John says of his grandfather, "and the hay had to be fed to that bawling calf. We pretty much hold to those truisms to this day. I can’t remember the last time my dad bought a heifer to feed, and I can’t remember him ever selling any hay, and I know that we’ve never, ever sold a bawling calf."

Jack adds, "If I ever sold any hay, my daddy would roll over in his grave, and second, he would come back and haunt me. It’s because we’re cattle people. We don’t want to sell it; we want to feed it. Same applies with the bawling calf."

Though Jack says his father was one of the first to feed cattle in the area, by the mid-1920s almost every farmer in Nebraska fed a load of cattle.

"If you raised corn, you fed some cattle. It was not the day of specialization; it was the day of diversification."

The Maddux family got its start in Nebraska in the late 1800s. Taylor Maddux, John’s great-grandfather, moved from Iowa to Santa Fe in the mid 1870s and worked as a teamster hauling freight from Santa Fe to the surrounding silver mines.

In 1880 he moved to Culbertson, Nebraska, and soon after to nearby McCook, where he ran a livery stable until the turn of the century. Family accounts indicate that Maddux liked to drink and gamble. He particularly loved to race his horse.

"My great-grandmother Clara, on the other hand, was a teetotaler Methodist woman who didn’t appreciate drinking, gambling or race horses," John says.

She apparently got her fill of her wayward husband, because in 1886 she took up a claim outside present-day Wauneta, on Stinking Water Creek (the creek was apparently appropriately named, because buffalo would often get stuck in the muddy creek bottom and die there). That original homestead is the headquarters of present-day Maddux Cattle Co.

"My great-grandfather stayed on in McCook and ran the livery stable," John says, "but he would ride out on his horse, Skank, every month or so to see his wife. It was a 60-mile ride one way."

During the 1890s it got extremely dry. Many of the early settlers were desperate to survive, and Taylor Maddux found himself trading horses and even saddles and spurs in exchange for land. Later he expanded his operation with tree claims. Forty acres of planted trees garnered a homesteader a quarter-section of land.

By the turn of the century, Taylor Maddux had accumulated enough land to get a toe-hold in the ranching business. He sold the livery stable and a herd of Angus cows and moved back to his wife and the ranch on Stinking Water.

Taylor Maddux died in 1917, at which time Glen Maddux took the reins and continued in much the same fashion. He prospered through World War II. In his heyday, Jack says his father fed upwards of 1000 head of cattle.

"Back then, everything was done by hand with a team of mules and a No. 14 scoop," Jack says.

Glen Maddux saved the money he made from his feeding operation, and during the Depression the young entrepreneur was able to accumulate additional land by buying people out of bankruptcy.

Today, the feedlot operation revolves around Jack and John’s longstanding practice of early weaning. They started that practice years ago, primarily because the economics, at least for them, say it is cheaper to feed their calf crop on low-cost corn and byproducts in a feedlot setting than carry them on grass to the yearling stage.

March-born calves are therefore weaned off their mothers at 70 days of age, in June or early July. They’re straightened out over a 45-day period on cool season irrigated pivots and some native meadows. The young calves are enticed to come to the bunks scattered out on the pivots by a sweet-smelling ration of corn gluten and distillers’ grain. By the end of the 45-day period, they’re bunk broke and eating six to seven pounds a day. They come to the feedyard in August, generally weighing on average 390 pounds.

Last year 2300 head were weaned at the ranch and they lost only eight head. John attributes the low death loss in part to the calf’s clostridial immunity, which comes with early weaning, and also to the fact that the weather is ideal for starting young calves.

"In June and July we have consistently hot weather. We don’t have hot days followed by cool nights to contend with," he explains.

The Maddux employees are also avid students of Bud Williams, who is known worldwide for his animal handling techniques. John says incorporating Williams’ philosophies and principles into their operation has made a tremendous difference in their health program. Not only are the cattle worked and handled in a much calmer manner than might be used in a traditional commercial feedlot setting, they’re also exercised up and down the alleyways at least three times a week.

"My grandfather would roll his eyes," John admits. "He hated to move cattle around because he figured it was just taking off the gain."

Death loss minimal since they’ve incorporated Williams’ techniques, and dark cutters are almost nonexistent.

The Maddux family has always considered themselves ranchers, not farmers, and the economics, John insists, have always favored that predisposition. In other words, Maddux Cattle Company has always found it cheaper to buy the majority of their grains than to raise them themselves. Their rations are oriented toward cheap corn byproducts and high-moisture corn as well as some dry corn, a little bit of ground hay (home-raised, of course) and a protein supplement.

They buy their feedstuffs almost exclusively from farmers within a 25 mile radius of Wauneta, many of whom they’ve done business with for more than 50 years. They’ve established relationships with these farmers whereby the farmer agrees to sell half up front at market price. If he so chooses, he can store the remainder in pit silos at the Maddux feedyard at no cost, and he has until April 1 to price the remaining 50 percent of his grain.

"Our neighbors like it because they get free storage on half their crop with very little freight, and we get to attract all that high-moisture corn," John explains.

They have capacity for about 150,000 bushels of high-moisture corn, and they’ll feed 30,000 to 40,000 bushels of dry corn in a given year. This concentrate is supplemented with extensive use of byproducts — distillers’ grain from ethanol and corn gluten from corn sweetner production, all of which is trucked in from about 250 miles away.

The cattle do well on this byproduct ration. The big end of their home-raised steers will gain on average 3.3 pounds per head per day over the 200-plus days on feed. Cost of gain, John says, is competitive with most commercial yards. Last year, for example, it averaged out at about 42 cents. He attributes their competitive cost of gain in part to the fact that young, lightweight calves convert much better than a typical yearling.

The Madduxes have a strategy for everything they do, and their feedlot business is no different. Everything, John reiterates, revolves around economics and the seasonality in fed cattle slaughter, which dictates that they target the March-April fat market because that traditionally is when the market peaks. The Choice-Select spread is also relatively narrow during this timeframe. Their early weaning practices help accomplish this goal. The young calves are pushed hard and slaughtered at 13 months of age.

Cattle have been sold exclusively to IBP for many years now, and everything is sold on a formula basis using IBP’s real-time grid.

"It’s worked extremely well," John says. "Because our cattle are on feed for so many days, they’re high yielding — 64.5 percent. These calf-feds will also grade anywhere from 65 to 70 percent, and we think that’s pretty acceptable for such a young animal. That’s why, as a general rule, we’re much better off selling everything on a carcass basis rather than on a live basis."

All cattle are processed at IBP’s plant in Lexington, some three hours to the east.

They generally don’t hedge their cattle.

"Our hedge," John says, "is basically that we’re selling in the spring of the year, we’re feeding our home-raised cattle, what cattle we buy are light, and if we put on cheap gains we keep our breakevens low. In other words, we feel more comfortable managing risk by managing breakevens rather than using futures and options."

Another somewhat separate part of the Maddux feeding operation is the cutting bull enterprise. Some 500 head of bull calves are kept intact annually at weaning. The bull calves are sorted and culled down, and about 300 of the 500 head are selected for a 45-day gain test. At the end of the test they’re sorted and culled one more time. Those that don’t stand up to the rigorous selection process are castrated and put on feed.

The remaining 200 head of bulls go into the breeding program. Those bulls are kicked out with the cows as yearlings, but they’re only used for one season. Immediately after the breeding season, which occurs the latter part of July, those 1000-pound yearling bulls are castrated and put on feed. They come off feed at about 18 months of age beginning in November and December, and weigh about 1400 pounds.

"They don’t convert like the calves," John admits, "and consequently the cost of gain will be higher, but we weigh into that the fact that we’re able to sell them at steer price rather than as cow meat."

Both John and his father wonder about the long-term viability of feeding their calves out at home.

"A family-owned and operated farmer/feeder kind of an operation is pretty much a dinosaur," John admits.

Thus far they’ve been able to keep up with all the regulations, but John worries that in the near future a 3000-head feedyard will no longer be an economically viable enterprise with impending environmental regulations.

Curtailment of groundwater pumping for irrigation purposes is another reason the Madduxes worry about the viability of home-raised fats. They’ve already seen a significant drop in the Ogallala Aquifer in recent years, and pumping for irrigation purposes is limited to 14.5 acre-feet per year. Further restrictions, John opines, will be needed in the near future.

Jack has other reasons for questioning the viability of their feeding operation.

"We have so much bunk capacity in the U.S. today," he points out. "That, coupled with the management tools that are available, hedging, for example, has helped fuel the demand for feeder cattle to a point that we almost always bid any profit out of them.

"That’s always been kind of true in this business," he adds, "but it’s even more the case today. We have all these commercial feedyard managers who are being pressed to keep these yards full, and we have all these feeding complexes that are willing and eager to accept returns based on yardage.

"I’ve heard some numbers quoted, and I believe they’re true. If you have a reasonably priced yard, and you keep it full, you can make 20 or 30 percent on your investment. That is so different from how it was in 1918," Jack concludes.

All Video Extras with Jack & John Maddux:

Jack and John Maddux, a father-and-son team who own the Maddux Cattle Company, tell the story of their failed initial attempt to... more››
John Maddux says he's from a "mixed" family: his grandmother was an FDR Democratic and his grandfather was a hardcore Republican.
John Maddux tells the story of his grandfather's deathbed admonitions to his dad.
John Sibbitt says he's always done business with a handshake. Melvin Nation and Jack Maddux agree that your word is your bond.