Betty Jo Gigot, Editor and Publisher

Once part of the mainstream, Scott Keeling has quietly and resolutely watched the 17,000-head capacity, independent custom feedyard he and his wife, Karen, own become somewhat of a rarity. Not only that, but he knows there will be fewer and fewer of his kind as the industry continues to consolidate. High feeder prices, close margins and rising feed-grain prices have made customers hard to come by, and many feedyard owners have had to bite the bullet, find the equity and fill the feedyards themselves.

From the ‘old school’
For some feedyard managers, life without customers is a relief, making management a great deal simpler by not having to cater to outside interests. Keeling sees it differently. “I had an out-of-town banker here recently,” he said. “He asked me why I feed for customers at all. My answer was simple. I like dealing with people. Everyone who works here is proud of our customers and enjoys the relationship we have with them.

“Times have changed in that regard. I used to buy boxes and boxes of Christmas cards and have the staff put labels on them to send to my customers. Now I buy one box and address them myself by hand,” Keeling joked.

Keeling has absolutely no doubt about his profession. “I am a cattle feeder! It doesn’t matter if I have to feed 100 percent of them myself, I will continue to feed cattle. As long as my customers stay with me, though, that is one part of the business I enjoy a great deal.”

The company stays at about 30 percent company-owned and partners with many of their cow-calf customers.

Keeling may be swimming against the tide, being small and independent, but he certainly keeps up with the industry when it comes to the rest of his operation. Utilizing the services of Consolidated Beef Producers (CBP) is one way he has been able to compete.

“The first and second time that they tried to start a marketing program, I passed,” Keeling said. “I knew that I could market my cattle better than they could, but as marketing has become more complicated, I was glad to share the responsibility.” Now, CBP markets all of their feedyard cattle and Keeling feels that CBP’s Bruce Cobb is a definite asset.

Keeling noted that, in the beginning, one of the CBP’s goals was eventually to market a branded product but, back then, he had no concept of how difficult that side of the business was.

“I had a chance to spend a full day at Cargill in Wichita several years ago,” Keeling said. “I got a chance to see how they look at things. As one of them said, ‘You think it’s tough to deal with packers? You should try retailers.’” Keeling certainly doesn’t want to go to work for the packers, but does appreciate the fact that they need each other.

Necessary changes
Keeling knows that finished cattle, feeder cattle and fed prices are all at a different levels, but still remembers that the bottom side is still there. “I remember when 75¢/cwt was a real good ticket. Now 75¢ would kill us.”

As with the rest of the industry, most of his yard’s cattle are coming in preconditioned or backgrounded and at heavier weights. “For the last three years we haven’t been drowning in 400-500-weight cattle like we were in the past. That has changed.”

Keeling has also made changes in his purchases. He uses Schwertner Select and other programs like it to source cattle. The company also owns 2,000 acres of land for wheat pasture, although current prices dictate that part will be grazed, part ensiled and part combined. The wheat pasture allows Keeling to add cheaper gain to feeder cattle before putting them in the feedyard.

Ethanol has come to Hereford, and, although they haven’t signed on for it yet, Keeling will be looking at feeding wet distiller’s grain (WDG). They currently use corn gluten but anticipate WDG will fit well. Keeling feels the jury is still out on ethanol production where subsidies are being paid to produce fuel while raising corn prices.

More of an issue for Keeling is the upcoming implementation of COOL. “COOL scares me a lot,” Keeling said. “I not only feel threatened by the expense, but also feel it will be detrimental to the industry as a whole.”

Keeling buys some of his feeder cattle from Mexico and is troubled about the packers’ reaction to having to sort them out at slaughter time and how the products will fit on the shelf. Interestingly, the numbered ear tags required for Mexican cattle makes those cattle easier to trace than most from the U.S. “They are as easy to sort off as Holsteins,” Keeling said. “My nine-year-old son can sort them and they would all be in the right group.”

Keeling wonders what will happen to the cattle that don’t have the proper COOL papers.

“If it works, I will be the first to admit it, but right now I certainly have my doubts.”

One lucky man
All in all, Keeling feels very blessed with a job he loves and a successful feedlot. The evolving Hereford community and growth of the area’s agriculture industry have made it a good place to live and raise a family.

Even better, with a son just out of college, one in high school and a nine-year-old, Keeling’s business has allowed him the chance to participate in his sons’ lives. “I never miss a game,” Keeling said. “It doesn’t get much better than that.” gladly share.