Multigenerational Ranching

from The Cattleman - November 2022

Building a Profitable Operation

Communication is vital to preserving a family ranching business.

By Chrissy Fly

Three years following the Alamo, in 1839, Coleman Locke’s great-great grandfather, Joel Hudgins, first arrived in the area around Hungerford.

Over time, he put together quite a bit of country he used to raise cattle and farm. The land was plentiful enough that future generations were poised with opportunities to continue the operation.

Joel’s son, J.D., formed a partnership with his children in 1908, marking the beginning of J.D. Hudgins Inc. — and one of the first American Brahman herds. Today, J.D. Hudgins Inc. is among the top 10 largest U.S. purebred producers, with more than eight divisions within the operation.

Any family business standing the test of time for more than a century has learned a few lessons along the way.

Coleman and his son, John Locke, recently joined TSCRA Talk host Kristen Brown to share what it’s like to live and work on a multigenerational ranch.

TAKING THE REINS

When John, the sixth generation, returned to the ranch after graduating from Texas Tech University in 2001, he said he felt empowered by his father to share his input. From there, he was able to start from the bottom and work his way up into management roles.

However, he admitted succession planning is perhaps one of agriculture’s greatest challenges.

“It’s tough because you’re usually dealing with people in different stages of their lives and people who have had different experiences,” John said. “I think it’s important to try to step outside of yourself and put yourself in someone else’s shoes.”

As a young person returning to the ranch, he remembered being full of energy and ready to make his mark. Someone approaching retirement age may not share the same opinions on taking risks and charting new territories.

“From the younger generation’s perspective, don’t think you have to conquer the world in one day,” John said. “And then from the older generation, there’s hesitation to bring the younger generation along because it feels like you’re losing control.

“If you can take small pieces to use as a learning opportunity and build their confidence, they will be set up to be more successful and take risks themselves.”

The previous generation’s experience helps equip younger family members for what is to come.

“You need to have them involved in the management and the decisions that are made,” Coleman said. “If you wait until one is 50 years old to give it to them, they’re not going to know what to do with it.”

As both Lockes would agree, a successful generational transfer in a family ranch begins with a clearly communicated plan.

“There’s only one way the next generation is going to be capable,” John said. “And that’s if they are given opportunities, if they make mistakes and if they are given some level of control. My advice to the older generation is to have a plan, communicate the plan, and go out there and do it.”

Coleman likened working with different generations to marriage — communication is key.

“Working with family can be hard,” Coleman said. “I think communication is probably the main thing, besides a little give and take along the way.”

J.D. Hudgins Inc. hosts a monthly formal meeting to discuss business matters and ensure all families are kept up to speed.

Daily communication also serves as an extremely important pillar in their success. By allowing everyone to have input, each division of the partnership can be part of ranch decisions.

Coleman and John Locke represent the fifth and sixth generations, respectfully, of J.D. Hudgins Inc.

At the foundation, it is important to remember the ranch is a business. And don’t assume the kids will always want to come back, John said. Make the business fun, profitable and as easy to operate as possible. Doing so will make it enjoyable and, odds are, the next generation will want to be a part of it in the future.

“If you do a proper job of building a business and having it a joy to be part of, and a blessing that serves people, then there’s a good chance that your kids will want to come back,” John said.

STUDY HISTORY

In his family, Coleman said he encourages younger generations to know the family history and ask questions. Traditions are passed on from generation to generation and it’s the best way for younger family members to learn.

“I would tell a generation coming up to get very acquainted with what has gone on over the years in your family’s business on the ranch and work to continue that; not only continue it, but improve on it,” Coleman said.

Their ranch faced a crossroads in early 1960s. The family had to work together to change their business approach. They divided the land among five families and created a corporate structure to move the operation forward.

“And so everybody had to work harder,” Coleman said. “Today, we operate about twice as many cows as we did in 1962. We operate a lot more efficiently.”

Understanding family dynamics can be tricky, and enlisting support from a professional mediator or attorney can help guard against any resentment and ensure roles are clearly defined.

When the dust settles, the ability to learn and appreciate the strengths of each generation, and work together to establish a clear-cut business plan, will help secure an operation’s future for generations.

“If you set up the business and do the hard work, then you can reap the benefits for a long time to come,” John said. “The fact that we are still operating today is a testament to the wisdom of the ones who set the business up all those years ago.”

To hear more of the conversation, download TSCRA Talk, a podcast by Texas & Southwestern Cattle Raisers Association, via Apple Podcasts, Google Podcasts, Spotify or Stitcher. T C

Chrissy Fly is a freelance writer and graduate student at Oklahoma State University.