"SOMEBODY'S MISTAKES" is how Larry Runyan characterizes the calves he buys from local auctions, preconditions and feeds. Runyan has found his place in the cattle business picking up the small chips that most big operators leave on the table.

Cattleman In Missouri Profits
From Other People's "Mistakes"

By Colleen Schreiber

STEWARTSVILLE, Mo. — Larry Runyan has found his niche in the cattle business. That niche is in buying lightweight sale barn cattle, the kind he describes as "people's mistakes." Runyan preconditions them, backgrounds them and then carries them on through the feedyard, selling them on a formula.

It's something he's been perfecting since the late 1970s, though he's been handling cattle all his life. He started out running cattle on grass but he needed somewhere to start them and didn't have the facilities, so he built them. The business grew from there. On an annual basis he turns over some 3000 head. Some of them he starts for his dad, some for his siblings and some are just his. Either way, someone in the family carries the cattle all the way through the feedyard.

The Runyan family has lived in the northwestern part of Missouri for a good many years. Larry's grandfather had a farm just outside St. Joe, where he bought fat cattle on the "bricks." He later moved to Kansas City, where he signed on with Swift & Henry Commission Company. The company later split and today Larry's father, Jim, operates Swift and Henry Order Buying Co.

Larry spent every summer and weekend at the family farm, doing odds and ends like cutting thistle and hauling square bales. They were chores he didn't particularly care for, but that never diminished his love for the cattle business.

"I always knew I wanted to do something in the cattle business. I had the opportunity with my dad and uncle to be in the order buying business and I sort of enjoyed it, but I really wanted to be more involved in the production end of things," Runyan says.

Upon completion of his agriculture economics degree from Kansas State University, Runyan returned to the family operation. That was in 1979.

Today Runyan, along with his four sisters and brother, operate Seis Cattle Company, a family corporation. Larry lives on the farm and handles the day to day operations.

"It’s kind of a yours, mine and ours operation," he explains.

Runyan handles steers almost exclusively because he says they gain better and require less management. He prefers lightweight English crosses, the black-hided kind, weighing anywhere from 275 to 425 pounds. The bulk are in the 350 to 400 pound range and they're typically six to 10 months of age when he buys them.

"They're probably most people's mistakes," Runyan remarks. "The producers who are really doing good with their calves are going to have a uniform set of calves and a lot of them to sell. I don’t want to pay for those kinds. I want to make a living off of other people's mistakes and off of smaller producers who don’t have load lots to sell."

From his dad, Runyan says he learned that everything has a value.

"I don't know if he really said it that way, but you make a profit or a loss the day you buy these cattle, so it's critical that you buy them right. You have to buy the condition, the kind, and kind can be anything, really. Every kind has a value," Runyan explains. "By condition, I mean that most of the ones I buy are not the big, fat, juicy calves. Fat calves are the hardest ones to start. They just fall apart and melt like butter. A little thin calf kind of knows how to fight for himself."

Another reason Runyan prefers the light kind is because he says he gets along better with them health-wise, plus he doesn't have as many dollars tied up in them.

"I can usually grow my way out of trouble," he remarks.

Time constraints keep Runyan from doing his own buying, so his uncle and a few others handle that chore for him. About 90 percent of the cattle are bought within 90 miles of home. He buys a few country cattle, but the majority come out of local sale barns. He only buys country cattle if the owner follows his prescribed vaccination program.

The bulk of the calves he buys come straight off their mamas. They're vaccinated the day after arrival. The vaccination program he uses is fairly typical except that he prefers a modified live product over a killed virus because, he says, he has much better results with the modified live product. He doesn't generally give a booster shot.

All calves are implanted, wormed and given a numbered eartag on arrival. Individual health records are kept so Runyan can get a better handle on what's working and what's not.

The cattle are never confined while at the facilities. The central facility is surrounded by 10 to 12-acre improved pasture traps. Most all of the ground had been farmed at one time or another, and when the farmers put it back to grass they generally used fescue or brome. In most areas fescue has taken over. Sometimes fescue can cause problems, Runyan says, in that some animals won't shed their hair.

The cattle remain in these traps except for a couple of hours each morning when they're gathered and brought in to check for sickness. Keeping them out of the dust and mud, Runyan says, helps minimize sickness.

While in the traps, they’re supplemented with a starter ration and free choice hay. Decox is generally used in the ration for preventive measures because coccidiosis is often a problem.

In terms of ration, "I like whatever commercial product I'm using to have a lot of soybean hulls in it," Runyan says. "The cattle really like soybean hulls, plus, they're highly digestible. I've started them on just straight soybean hulls with a little corn and it worked pretty well."

Runyan is considering putting in a mill on-site so he can formulate his own rations.

As might be expected, early fall is when Runyan has the most health problems.

"It gets hot in the day, cool at night, and then it starts raining. They just haven’t had any cold weather on them," he explains, "and they're just not tough yet. By December and January they've lost a little of their bloom."

Runyan can generally run 300 to 400 animals at a time through his facilities depending on their size, and he has cattle of all sizes that he straightens out at the same time.

"If I turn out real uneven cattle and I have enough numbers, I can keep going through them and sort off two loads at a time and come back and get two more loads a month later or 45 days later," he explains. "It's just a way for me to scatter my marketings."

Each animal is charged a set fee to be at the facilities for the first four weeks. After that, the fee is replaced with a per head per day charge. Runyan figures, on average, it costs about $1 per head per day to run animals through his preconditioning facility. Broken down, it comes out to about 40 cents a day just to have the cattle there; 40 cents to feed them and then anywhere from $7 to $12 per head for processing and medication.

"I can make that back up," Runyan insists, "but I have to own the cattle a lot longer than 28 days."

The cattle, on average, remain in these grass traps for four weeks, sometimes a little longer on different sets of cattle. Once Runyan feels comfortable that they're over the hump, the cattle are turned out on bigger fields but they're still kept close to the central facility. After a time, they're moved to grass on one of the family's nearby farms. The bulk of the cattle are carried on grass until they weigh on average 700 pounds.

Because he buys cattle basically year-round, Runyan is constantly shuffling cattle in and out. That makes rotating the larger pastures critical.

"I turn out awfully heavy in the spring because I want to utilize that spring flush of grass and I don’t want to put it up for hay. Around my house this summer, I turned out approximately 750 pounds to the acre and came out with two loads of cattle the middle of June, two loads the middle of July, and some more in September. I'll finish shipping those calves sometime in November."

On average, however, if it’s a good year and he has good strong grass, Runyan stocks at one 500 pound steer per acre per season. There is a little greenup in March, but he says there's really not enough growth until about the second week of April. The growing season generally stretches through the first part of October.

Runyan began cross-fencing pastures into smaller units to even out his distribution across a pasture and keep the cattle from spot grazing before intensive rotational grazing became popular. He had some positive results, so he added more pastures. Now he's working on adding more waterings so he can subdivide even further.

"Early in the spring I rotate fast, every day to be exact. I just want the cattle to top the grass," he explains. "When we get into the heat of the summer, we rotate every three to four days and then speed back up in the fall when we begin to see some new growth again."

Gain, of course, varies depending on time of the year.

"If I gain 1.6 pounds in a day I've done it all," Runyan remarks. "Most will only gain about 1.3 to 1.5 a day. In the winter we’re only going to gain a 1.25 to 1.2 with supplementation.

"It's not like the Flinthills," he continues. "Our grass isn't as strong. The grass there is a lot stronger in the heat of the summer than ours is, and consequently our cattle won’t gain much during the summer."

After he began rotating, he doubled his production; in some instances it's double and a half.

"I’m not in business to put up hay," Runyan remarks. "If I let that grass mature in the spring, the nutritional plane drops dramatically, so if I don’t have the numbers of cattle to graze that grass properly then I’ve lost the game."

Most of his pastures are primarily cool season grasses consisting of a predominant mixture of timothy, fescue, brome, bluegrass, orchardgrass and usually some legume component, either red clover, lespedeza or birdsfoot trefoil.

Red clover, Runyan says, has to be planted every two years. Lespedeza is persistent and trefoil will persist if managed properly and allowed to go to seed every few years.

Taking care of the grass, Runyan says, is really important. "One of the old sayings is probably the truest saying there is — I’m not really a cattle rancher; I’m a grass farmer and cattle are my vehicle to market my grass. Grass gives me the opportunity to buy cattle and get them started."

His grass inventory, he stresses, dictates how and when he sorts off his cattle.

"The finish weight is not the same every time," Runyan explains. "We're extremely flexible in the way we handle cattle. We've sent cattle out weighing 850 and some weighing 550. It all depends on the market and what I think the cost of gain will be at the feedlot. If I think there’s an opportunity, I might go out a little earlier. If I don’t have the grass there’s no reason why I can’t go to the feedlot weighing 550."

The majority of the cattle are fed out in the Platte River Valley of Nebraska, near Lexington. Very seldom do they sell steers as feeders.

"I think there is too much compensatory gain left in our cattle, and I think the performance in the feedyard proves me right. Our cattle on our grass here in Missouri typically don’t get fat like the cattle on the Osage or the Flinthills.

"If I had fat yearlings coming off the warm season grasses of the Flinthills," he continues, "then I’d say I’d want to sell them, but as green as our cattle are, most times I can’t get the premium I think I ought to get for the type of cattle we’re selling, so we feed them out. Our conversion is good, cost of gain is usually good, all-around performance is usually good."

Medication costs are nil, so he knows his vaccination and preconditioning program is working well.

Their medium-framed English cross cattle, Runyan says, sell well on the formula and most are sold in this manner.

"Nine times out of 10 we come out ahead on the formula. On a weighted average, most of my cattle bring about 35 cents a hundredweight above the cash market," he says.

Like other formula sellers, Runyan worries some about price discovery and the diminishing number of cattle being sold on a cash basis, but he is of the opinion that it's here to stay.

"We better learn how to discover price and live with it," he adds.

Runyan uses the futures some, but for the most part he prefers to take his chances, taking the good with the bad, because he says, in the end it generally all averages out.

The last couple of years have been tough ones for Runyan, but the time right after the dairy buyout affected him more because he was just starting out. He says he can handle risk a little better today because he has more equity built up and because his marketings are scattered out. On the other hand, he's handling a lot more volume today.

"I think I probably shoot too much from the hip. Whether my gut feelings are right or wrong ... that’s kind of what dictates what I do," he remarks.

That's not to say that he doesn't worry some about the future. Runyan says his greatest competition comes from urban encroachment. Just south of where Runyan resides, the land about an hour from Kansas City sells for anywhere from $2000 to $3000 an acre; on the north end of the county it's $1000 to $1500.

"I don’t like the encroachment, but everyone has the same rights. If they can afford the ground they can do whatever they want with it, but they can’t make a living on it at that price. The only way you can expand is to expand with the equity that you have in your other ground.

"The biggest reason for the exodus of young people from agriculture," he continues, "is that they can't make a decent living. If I can’t make a decent living, no matter how much I enjoy it I'm not going to do it. I’m out here to make a living.

"I like the sound of a family farm, but I think the family farm by and large is a thing of the past. We all have a bottom line, and if we can’t figure out how to make a living, someone else is going to do it."

Growing and changing with the times is part of survival, Runyan says, that and being better at something than the next guy. Though it's a seven-day a week job, it's a job that Runyan enjoys. He hopes it will continue to be profitable on into the future.