Searching for the Right Niche

New Mexico Business Journal, Sept, 2001 by Paul Krza

Running beef cattle in the best of times is a tough, rough business -- and these aren't the best of times

A MID THE ELECTRONICS AND eclectic new-wave growth, an Old West industry-- livestock ranching-still survives in New Mexico. In fact, in 2001 there are almost as many cows in the state now as people, about 1.6 million, surprisingly down only slightly from the all-time high of 1.9 million in 1922. Nationally, New Mexico ranks about 20th in overall cattle numbers. But it's not only beef. The cattle count has stayed high due to the dramatic growth of New Mexico's dairy industry (see related story).

Ranching is a business, but it's one that conjures up romantic images-- rugged cowboys working the range, breathing fresh air outdoors, far from car-clogged commutes and eight-to-five routines. In reality cattle ranchers put in long hours and face an array of uncertainties, ranging from unpredictable weather to big swings in demand for beef.

"We're making a little bit of money, but it's really a way of life ... it's the best place to raise kids," says Phil Bide-gain, a third-generation Tucumcari-area rancher and president-elect of the New Mexico Cattle Growers Association. With about 2,500 cattle ranging on around 200,000 mostly-deeded acres, the Bidegain spread is one of the tenth largest in New Mexico. The sheer size of his operation makes it economically feasible, he said.

But during the last decade, times have been anything but flush for many ranchers, says NMGA executive secretary Caren Cowen. They've weathered record-low prices, a severe drought, rising imports and lately, "environmental extremists trying to eliminate cattle" from public lands in the state, she said. Though there are the big-spread ranchers like Bidegain, "most of the ranchers in New Mexico probably average 100 cows or less ... family ranches, and a lot of them work in town to be able to have their ranch," says Jimmy Bason, current NMGA president.

Still, though industry ranks have been thinned, prices rebounded this year, injecting an element of optimism. The average price hovers around $70 a head, "better than three years ago but not as good as the past," according to Charles Gore, a Las Cruces-based statistician with the U.S. Department of Agriculture. "Folks have had a tough time, but if it rains and if the market holds, we're at the point of turning the corner," Cowan says.

But the economics over the long haul suggests that ranchers have considerable work to do if they want to survive in today's global marketplace. Over the years, costs have escalated and profits have remained stable. "I've sold cattle in 1979 for the same price as last year," says smaller-scale Carrizozo-area rancher Sterling Spencer. His family has been in ranching for four generations, and he runs an 800-head cow-calf operation on about 45,000 acres. Nevertheless, even though he now produces twice the tonnage of beef on the land as in previous years, his costs have spiraled upwards to the point "where we've lost 83 percent of our purchasing power."

Spencer is a member of a NMGA committee that's studying possible alliances among state ranchers to produce, slaughter and sell beef in a niche market. It's an attempt to wrest control from the few big companies that dominate the packing industry. "We know at the retail end there's money that's not getting back to the producer," Spencer says. "We're the finest and most efficient producers of protein. The problem is we don't know how to market it."

Meanwhile, the industry is in the legal trenches, fighting pitched battles over attempts to limit grazing on public lands. "Radical left-wing environmentalists" like the Forest Guardians are simply trying to "put cattle ranchers out of business," says Bason, who holds federal leases as part of his Hillsboro-area operation. Kirsten Slade, a grasslands ecologist who works for Forest Guardians, says the organization has filed suits asking that cattle grazing on federal lands be "conducted in a responsible manner." But she also said that grazing is "ultimately an unsustainable use" on fragile lands. In many instances allotments should simply be "retired" and ranchers should be paid up to $100,000 to stop using them, she said.

Cowan said the grazing lease struggle is the biggest issue facing the cattle growers, "an uphill battle" that's taken "a lot of time and money" to fight.

But it's the niche-marketing plan that offers the best hope for the future, and "to preserve this culture," Spencer says. "I would say it's five years away, and we needed it ten years ago."