A TOUGH BUSINESS under any circumstances these days, agriculture is even harder when the operation must meet the expectations of multiple owners. Such is the case with the family-held corporate outfit in Mississippi where Ted Kendall IV is one of 13 heirs as well as co-manager with a cousin.

Agriculture Is A Challenge
For Family-Held Corporation

By Colleen Schreiber

BOLTON, Miss. — Gaddis Farms, a family-held corporation, has been in operation for right at 100 years. Naturally, as the family grew, the number of heirs has grown. That in itself challenges any family-held corporation, and today's limping agricultural economy adds yet another challenge.

"In 1900 there was one owner. In my dad's generation there were four owners. In my generation there are 13 of us. Those folks want a return on their investment, and I don’t blame them," Ted Kendall IV says.

The family migrated to the area from Georgia. The last Gaddis, Lloyd Gaddis, died a number of years ago. He had no offspring. Ted's father, Ted Kendall III, a nephew to Lloyd, grew up in Jackson where his father was a banker, but he spent his summers at the farm, working and learning all he could from his Uncle Lloyd. His uncle died soon after Ted III completed his college degree from Mississippi State University, and he immediately returned to take over the family operation.

Today he remains president of the company. Son Ted IV and a cousin, Kendall Garraway, are the only other family members involved in the operation on a day to day basis. Ted IV is primarily responsible for the livestock and corn operations while his cousin handles the cotton and soybean operations. The two share responsibilities on the timber operation and hunting club.

Like his father, Kendall returned to the family operation right after college. Kendall says his biggest challenge today in the cattle operation "is generating enough profits to justify having them out there."

Data collected from Integrated Resource Management program coordinators on 50 herds in Mississippi ranging from 20 to 500 head in size indicates that the minimum cow cost in that state is in the mid-$300 range and as high as $500 depending on how many cattle get bred. Additionally, breakevens on calves are in the 90-cent range in some instances, Kendall said.

"You can't hardly make that work," he remarks.

Gaddis Farms owns in excess of 20,000 acres of land, consisting of a number of farms that lie in a geographical area between Raymond, Bolton and Big Black River. Encompassed in that is 500 acres of hybrid bermuda hayfields, 12,000 acres of improved pastures, and 2000 acres of winter grazing. The remaining land is used in timber management, wildlife leases and unimproved pastures.

Their brood herd consists of approximately 2000 commercial cows; 20 years ago they had more cows but they're handling more stockers today. They background all their home-raised calves plus an additional 2000 to 3000 head, depending on the year. They feed approximately 1500 head of cattle year in and year out.

Gaddis Farms has long been a believer in diversification, and each enterprise, whether it be the brood herd, winter grazing or the background and stocker enterprise, is evaluated individually based on performance. Each must stand on its own merit, and Kendall uses that to identify what's working and what's not.

"We've diversified so that we can balance our risk a little," Kendall remarks, then adds, "or maybe we're just locking ourselves out of making a big profit. I don't know. On some of these cattle deals, if you’re not willing to take some risk you limit the kind of profit you’re able to make.

"The cattle deal has been tough," he continues. "The farming deal hasn’t been much different. This year we're looking at some really low markets."

Gaddis Farms has always maintained a commercial cow herd.

"Before my time, everything here was Herefords and then we brought in the black bulls to make a black baldy," Kendall says. "Then we tried the Brown Swiss and then some Brahman bulls. From there we went to Charolais, Simmental, Beefmaster, and kind of arrived at where we are today."

They have remnants of some eared cattle in the herd, but Kendall says the market has dictated that Brahman blood be kept at a minimum. Now Angus, Brangus and Gelbvieh are used in a modified three-way cross. Angus bulls are used on the first and second-calf heifers, Brangus bulls are used on the Gelbvieh cross cows, and Gelbvieh bulls on the black cattle, Kendall explains. Many of the bulls he buys are performance tested nearby. Others come from some of the well-known local breeders in the area.

"We’re sold that the Angus-Brangus type combination really fits what we’re trying to do," Kendall says. We’re striving for more moderation in our cows and calves, and because we raise our own replacements we pay a lot of attention to maternal traits," he explains.

Gaddis Farms maintains a spring calving operation and weaning begins in late August with calves averaging around 500 pounds.

"We wean fairly early so we can get the cows back into condition and since the calves all go into the background winter program, weaning weight is not something we push particularly hard," Kendall explains.

Their entire calf crop is preconditioned and carried through on a winter grazing program. Animals are backgrounded for 45 days using a receiving ration and bermuda hay, corn silage and whole cottonseed. Gaddis Farms retains ownership on about a third of them with the majority being fed in Kansas and Nebraska. Some come to Texas and a few to Iowa.

Kendall doesn't worry much about feeding his southern cattle up north, primarily because he doesn't feed many during the winter. Those he does feed are under shed in Nebraska or Iowa, or they're fed in Texas.

Some of the fat cattle today are sold on the rail on a grade and yield basis.

"It's worked for us," Kendall says. "We’ve beat the market doing it that way, but I’m not sure how much it's hurting the cash market. I've been satisfied, but there's some real problems out there trying to determine what the animal is actually worth."

Gaddis Farms has also fed some of their cattle through various alliances like Precision Beef Alliance in Iowa, and most recently they rented a slot with U.S. Premium Beef to feed a particular set of cattle and to see how that program works.

"Somehow we have to get paid for what the animal is worth," Kendall insists.

In mid-August when weaning begins, Kendall also begins buying additional stockers to carry on their winter grazing program. Like the raised calves, the stockers are backgrounded for 45 days prior to going on winter pasture. Gaddis Farms also retains ownership on a percentage of these cattle, partnering with certain feedlots when they come off in May or June.

The majority of the cattle for the stocker program are bought direct out of the country, mostly from neighbors with whom they've had a longstanding relationship.

"It works for both of us," Kendall says of the program. "We get fresh cattle that haven’t been exposed to things that auction barn cattle have been exposed to, and at the same time we provide the producer with a good outlet for their cattle. They don't get hurt as much on shrink and we save them some money on commission."

Weaning facilities consist of six pens capable of holding 250 head each. July and August, their hottest months, are the only time when the pens are not in use.

Ryegrass is planted in September, and if all goes well cattle can be turned in November 1. On ryegrass Kendall figures about 1.5 head to the acre. Last year Gaddis Farms had 3500 head of stockers, which included their own raised calves. Animals gain on average three pounds per head per day.

The winter grazing program has been in place for many years, but more recently Kendall has also added another program in which he buys heavier weight cattle to go through a 45-day preconditioning program and then straight to the feedlot. Gaddis Farms partners on some of these cattle as well.

Once the fall run is over, Kendall goes to auctions to pick up additional cattle for the backgrounding program.

On occasion when there's excess grass, Gaddis Farms also backgrounds some calves for summer grazing, but mostly their cow-calf pairs are run on native pasture, generally at a rate of a pair to two to four acres. The best native grass, Kendall says, is Bahia grass. It gets tough however, in later stages, so hybrid bermuda fields are used as hayfields.

Supplementation begins with a little protein in October to help the cattle finish off the grass. Cows are fed about two pounds of whole cottonseed a day along with silage prior to calving. During lactation, it's increased to about four pounds per head per day. He uses whole cottonseed because they own a gin and have ready access to the product.

By November a little hay is generally needed, but the main supplemental period is from Christmas through March. During that time, corn silage is fed in fenceline feedbunks.

"We're geared up to use corn silage," he explains. "We can feed our 2000 cows plus 3000 or so calves in the winter a lot more efficiently with silage than we can with hay. Plus, it's probably better than hay."

In buying outside cattle, Kendall doesn't necessarily buy the very best quality cattle.

"If we're going to feed them, I look for something I know will feed well," he remarks, "something that will perform, something for the right price."

For the last six or eight years Gaddis Farms has sold what yearling cattle they sell direct off ryegrass through Producers Video Auction in Fort Worth.

In addition to their cattle operation, Gaddis Farms has substantial farming interests as well. Today the family corporation farms 2300 acres of cotton, 800 acres of soybeans and 1600 acres of corn.

When Kendall's father took over the operation, a large percentage of the operation was in tenant farms.

"We kept 200-some mules on hand, and every morning the farmers would get their mule and go out and farm their 40-acre cotton patch," Kendall says.

"There was a little tenant house on every little hill. I can remember lots and lots of them; they’re about gone now, and everyone had their own chickens and pigs and a garden, and there were cotton gins all over this country.

The landowner got a percentage of the crop. It worked," Kendall says, "but mechanization eventually changed all that."

Cotton and soybeans are planted the end of April and early May and are harvested in mid-September. The farm plants Bt Roundup-Ready Cotton, a variety that is specially engineered to help protect it from bollworms. Roundup-ready, Kendall explains, means that Roundup herbicide can be sprayed over the top of the cotton when it's small.

Cotton, Kendall says, is by far the most expensive farming enterprise and most labor-intensive, but it has a greater potential return and consequently is their number one cash crop. Average production runs about a bale and a half to the acre.

"We pay for that technology," he says of the special cotton. "The Bt technology is something like $32 an acre and the Roundup technology costs $6 to $8 an acre. We're also in the boll weevil eradication program, and that’s another $24 an acre. So we’re loaded good on the front end. We've had a light insect year so we should make a good crop, but we don’t know about the market."

There are not nearly as many gins in the area as there once were, but Gaddis Farms has maintained their privately held gin all these years, one of the farthest south in the state.

"There’s just less cotton around here and we have to go a lot farther to get it. The module has helped revolutionize the cotton industry," Kendall says. "Now we go 100 miles to get cotton."

Producers pay a fee to have their cotton ginned and the gin keeps the seed. Sometimes the seed covers the cost of ginning and sometimes the farmers get a rebate, Kendall explains.

Corn is planted in March and April, and combining begins mid-August. The farm has someone else cut their silage and bale the hay, but all other farming they do themselves.

In theory, Kendall says he is 100 percent behind Freedom to Farm.

"We in the U.S. can outfarm anyone, but we need a level playing field. We have to deal with a lot of things that cost us money that other countries don’t have to deal with, plus a lot of other countries do more subsidizing.

"Certainly that's the way we need to operate, on supply and demand, but at the same time we need agriculture here, and there are times like this year that there’s going to be some serious problems in agriculture, more in crops this year than in cattle. I think we're going to have to have some help."

The last major enterprise on Gaddis Farms is their timber operation, which consists of extensive hardwood forests, about 7000 acres, and some pine stands as well, which are mainly in the CRP program. About 15 years ago the family hired a consultant to inventory and prioritize the place. Now the entire farm is under a timber management plan. The timber consultant works for Gaddis Farms on a commission basis based on the volume of sale of timber.

The hardwood forest is a mixed stand of primarily many different species of oak trees as well as some gum and ash trees. The better grading hardwood timber goes into furniture and hardwood floors.

Some of the unproductive tracts have been harvested and acorns have been planted, which Kendall says is something of a new practice. Oak trees have a 50 to 60 year maturity.

Their hunting program goes hand in hand with their timber management program. Forests are managed for wildlife as well as trees. Hardwoods, Kendall notes, are far superior to pines for wildlife habitat.

Gaddis Farms began a hunting club about eight years ago.

"It's just another way of adding some extra income by taking advantage of an existing resource," he says.

Memberships are sold on a yearly basis. Today there are 28 members mostly from nearby Jackson. The farm is working with a game manager, but improvement, he says, is slow.

All in all, Kendall meets the challenges he faces on a day to day basis, and though he doesn't regret his decision to be involved in the family operation, the future as in anything is uncertain.

Land today in his area is worth a whole lot more than it was 10 years ago, but ag value, Kendall says, has nothing to do with it anymore.

"There are lots of people coming back to the country, but they’re not coming to farm or ranch it. They have 10 acres and a horse or two."