Shrinking Giant

Once upon a time, the Matador Ranch was a cattle empire of more than a million acres. Today its herds graze a mere 128,000. That transformation is a tale of modern Texas.

August 1998By Comments

FOR SEVENTY YEARS THE MATADOR RANCH, WITH MORE than a million acres of grazing land, was one of Texas’ mythic, mammoth cattle empires, along with the King Ranch in South Texas and the XIT and the JA in the Panhandle. In the early part of this century the Matador’s holdings were scattered from West Texas to Wyoming, Montana, South Dakota, and Canada. What’s left of the Matador today—128,000 acres spread over Floyd, Motley, Cottle, and Dickens counties northeast of Lubbock—is a fraction of the original ranch. “The days of sun, sweat, and saddle leather of the past have gone,” says William Pearce, who lives in Lubbock and is the author of a definitive early history of the ranch, The Matador Land and Cattle Company, published in 1964 by the University of Oklahoma Press.

The story of the Matador parallels the big changes in Texas ranching—dwindling acreage as large ranches downsized or were broken up, a trend toward corporate ownership, fewer employees, less big-sky romance, and more bottom-line reality. But the Matador also anticipated some of the changes, surviving and even prospering because for more than one hundred years it has been run like a business. Since 1953, under the ownership of the wealthy Koch family of Koch Industries, based in Wichita, Kansas, the Matador has remade itself as a ranch that can do more with less, rewriting the Texas myth espoused in books and movies like Giant. “You’ve got to really cut out the fat and do things differently sometimes, and that’s hard in the ranching business,” says Bob Kilmer, who started out as a ranch hand at the Matador in 1976 and is now its manager. “It’s a very traditional business, and it’s hard to get some people to change.” But his bosses aren’t afraid to break with tradition and neither is he. “It has always been understood that things weren’t going to stand still around here,” Kilmer says. “We’re expected to continue to improve and be innovative and entrepreneurial. That’s what it takes to survive.”

In late May Kilmer, dressed in the rancher’s uniform of jeans, long-sleeved cotton shirt, cowboy hat, and boots, showed me around the ranch in his white pickup. It’s colorful, rough country—green mesquite brush, tawny native grasses, red canyons carved by winding creeks, far blue ridges. This land on the edge of the Llano Estacado, the high plateau stretching across the Panhandle into eastern New Mexico, is considered some of the best cattle country in North America. The Matador’s founder, Henry Harrison Campbell, picked the site because it was “cattle heaven,” with many types of native grasses and ample water from creeks and springs. In the late 1870’s Campbell, who had moved to Texas in 1854 with his parents and had later become a cowman while recovering from a Civil War injury, put together a herd of cattle and took it to Chicago, selling the animals for a tidy profit. There he met a banker named Colonel Alfred Markham Britton, who agreed to back him in setting up a ranch. In 1879 Campbell, Britton, and three other entrepreneurs established the Matador Cattle Company on 320 acres, starting with 1,300 head of cattle bought in South Texas. The animals had a wavy V brand that the Matador acquired along with the cattle and adopted as its own.

The early years were profitable, since there was plenty of free grass and water, expenses were few, and beef prices were strong. The prospect of big cattle profits in the West attracted foreign investors, especially Britons and Scots, who were familiar with raising livestock. In 1882 a Scottish syndicate based in Dundee, Scotland, bought the Matador for $1.25 million and established the Matador Land and Cattle Company. The Scots, who made annual visits to the ranch, were “hard-nosed in business, demanding that their ranch be a profitable, progressive operation,” wrote the late John Lincoln, who was the president of Koch’s Matador division in the early eighties, in his book about the ranch, Rich Grass and Sweet Water, published by Texas A&M University Press in 1989. “They would not be distracted from fundamental bookkeeping discipline even though this policy conßicted with a cowboy’s idea of ‘rugged individualism.’” The new owners hired the independent-minded Campbell as ranch superintendent, but they clashed more than a few times, and he resigned in 1891. Murdo Mackenzie, a Scotsman who became one of the West’s leading cattlemen, succeeded Campbell and moved the ranch headquarters from Dundee to Trinidad, Colorado, where he lived. Mackenzie embarked on a long-term program to upgrade the Matador’s herd and leased northern ranges in South Dakota, Montana, Wyoming, and Canada, since the ranges in Texas were being carved up by farms. In 1902 the company also bought 210,000 acres of the famed XIT Ranch to use as a holding pasture for cattle on the way to the northern ranges. The changes paid off—Matador cattle fetched better prices and won blue ribbons at major livestock shows, earning the ranch a reputation for producing top-quality beef.

The Matador dominated life in Motley County. It held dances on holidays that went on for days. Campbell had laid out the site for a town in 1891, and Matador, the county seat, grew up about a mile north of the ranch headquarters. The town had a bar—the Dew Drop Saloon—a bank, a hotel, a livery stable, a post office, a courthouse, and a general store. By 1940 Matador boasted some sixty businesses and 1,300 residents, but the population has since dwindled to about 750. “Most everybody in Motley County had family that worked on the Matador at some time,” says Matador’s mayor, Gary Lancaster, who worked as a day laborer on the ranch and whose father and grandfather were Matadors, as the ranch hands have been called for generations. One of the ranch’s full-time employees, J. D. Russell, is a fifth-generation Matador.

The Scots needed a place to live during their visits, so in 1917 they built a seven-thousand-square-foot house on a hill overlooking the barns and corrals. The massive structure is still in excellent shape, with two-foot-thick walls built of sandstone quarried on the ranch, several large porches, and in the yard, a ßock of wild turkeys. One wing of the house has been turned into modern offices; Kilmer, his wife, and their teenage daughter live in the other wing. Most of the other original structures are gone. The old Matador Cattle Company office, a white clapboard building dating back to about 1880, has been moved to the Ranching Heritage Center in Lubbock. The bunkhouse burned, and the old blacksmith shop was torn down years ago. The sandstone cookhouse is still standing, but it has been more than twenty years since the ranch hands ate there. One of the most interesting structures on the property is a tall rock water tower that was built by the Scots and looks like a castle tower.

The Matador was profitable under the Scots’ strict management, especially during World War II, when beef prices rose and the company’s income skyrocketed. So it was surprising when rumors circulated in 1950 that the ranch might be sold. “Taxation is what finally got them,” says historian William Pearce. “They were taxed in the United States and in the United Kingdom too. So I think they just gave up the ghost.” In June 1951 the investment firm Lazard Brothers (now Lazard Frères) offered $23.70 per share for all of the 800,000 outstanding shares of the Matador Land and Cattle Company. The Scots accepted the offer, and Lazard put the ranch into voluntary liquidation, forming fifteen corporations and dividing the land and cattle among them. In 1953 Fred Koch’s Rock Island Oil and Refining Company bought three of them, the Wolf Creek, TeePee, and Rodatam (“matador” spelled backward) corporations, the latter of which included the Scots’ headquarters. The rest of the Matador was sold to groups and individuals and divided into many small ranches and tracts sold to cotton and wheat farmers. The Scharbauer Cattle Company of Midland bought some of the land that had once been part of the XIT, and the State of Texas bought land in Cottle County and turned it into a game preserve.

Fred Koch (pronounced “Coke”) was born in Quanah in 1900 and grew up around historic ranches like the Four Sixes, the Waggoner, and the Pitchfork. But buying the Matador wasn’t just a sentimental decision for Koch, who also owned ranches in Montana and Kansas. Strong-willed and independent, he was a shrewd businessman who carefully analyzed everything before he spent a penny. His father, Harry, was a Dutch immigrant who became a pioneering newspaper publisher in Quanah.

The younger Koch attended Houston’s Rice Institute (now Rice University) for two years and earned a degree in chemical engineering from the Massachusetts Institute of Technology. He made his fortune when he and another inventor came up with an improved process for making gasoline out of crude oil.

Fred Koch’s mantra, drilled into every employee, was that change wasn’t only good, it was necessary to survive. That philosophy was fine in a technical business like oil and gas, but it was foreign to a traditional industry like ranching. Sterling Varner, who was Koch Industries’ president from 1974 to 1986 and then its vice chairman for three years, recalls that Koch was always experimenting on his ranches, trying different kinds of feed, grass, and irrigation techniques.

After Fred Koch died in 1967, his son Charles took over Koch Industries and transformed it into a multibillion-dollar conglomerate. With annual revenues of more than $30 billion, Koch Industries is the second-largest private company in the country, behind agriculture giant Cargill. Its main business is refining oil and operating extensive networks of pipelines, but it is also one of the nation’s top producers of beef. Beyond the Matador, Koch has a major presence in Texas, with two refineries in Corpus Christi that handle more than 325,000 barrels of crude a day, a pipeline system that runs from Corpus Christi to San Antonio, Austin, Waco, and Dallas—Fort Worth (the company is the largest supplier of jet fuel to the Dallas—Fort Worth International Airport), feedlots in Hale Center and Lubbock, and about four thousand employees.

Koch is a private company in more ways than one, with a long history of keeping a low profile and shunning attention. Recently, though, it was catapulted into the public eye by an extremely bitter family feud. Two of Fred Koch’s four sons, William and Frederick, sued their brothers Charles and David, who own most of Koch Industries and are, respectively, its CEO and executive vice president. (David, who is William’s twin, lives in New York City, where he and his wife recently bought Jacqueline Kennedy Onassis’ Fifth Avenue apartment.) In their suit, William and Frederick said that, when they sold Charles and David their stake in Koch Industries for almost $1 billion in 1983, their brothers misled them about the value of some Koch assets and that they are owed billions more. The long fight got so nasty that William accused his brothers of everything from racketeering to stealing oil from an Indian tribe. In June a jury in Topeka rejected William and Frederick’s claim, but William vowed to appeal.

The war between the Kochs seems far removed from the Matador, where Charles and William worked in the summers when they were growing up. Although the Kochs are absentee owners—unlike the proprietors of a lot of historic Texas ranches, who lived on the land and became the equivalent of Texas royalty—they aren’t completely objective about the Matador. Sterling Varner says that Koch’s top brass has considered selling from time to time. “Every once in a while they’ll say these ranches aren’t returning a very good profit and we ought to sell them. But Charles always puts the price up so dadgum high he’ll never sell,” Varner says with a laugh.

Like his father, Charles Koch expects the ranch to be run as a business. “We’re always focused on the bottom line,” says Bob Kilmer. The ranch is profitable when the weather and the cattle market cooperate, he says, but in keeping with the company’s super-private nature, he won’t divulge any figures. The Matadors are encouraged to come up with new ideas for increasing profits. For instance, several of them thought up the idea of rotating cattle through a series of paddocks to keep the grass from becoming overgrazed, and they can fine-tune the project as needed. “Our guys have a lot of autonomy and decision-making rights,” Kilmer says, “and they’re accountable for their decisions.”

In the early part of the century, the ranch regularly employed more than one hundred men and ran about 70,000 head of cattle; now it has only eight full-time employees and runs about 7,500 head on its 128,000 acres and 75,000 acres it leases. Like many ranches, it contracts out most of its fencing work, windmill repair, and branding to cowboys who are basically day laborers. “It’s nothing like it used to be when I started working here,” Kilmer says. “We did everything ourselves back then. Basically our guys today do full-time cattle care.” That has allowed the Matador to double its ratio of cattle to men from about 500 to one in the early eighties to around 1,000 animals per employee now.

The Matadors keep trying new ideas. They’ve introduced new grasses to complement the native grasses on the ranch. Instead of building concrete watering troughs, they’ve found a more economical and efficient trough made from huge rubber tires originally used on mining equipment in Arizona. And they’ve put up electric fencing rather than the more-expensive barbed wire for some of the pastures inside the ranch’s perimeter. “That goes against the grain of some dyed-in-the-wool cowboys,” says Kilmer, “but at some point economics has to come into play.”

Until recent decades the Matador’s cattle had a well-deserved reputation for wildness. There were so many dense thickets of mesquite brush and shin-oak in the draws that it wasn’t uncommon for cowboys to find ten-year-old “outlaw” cattle that had never been branded. Much of the brush where the cattle used to hide has been cleared, and the once-wild cattle are pretty docile now, although Kilmer says that mavericks still manage to evade roundups. The ranch occasionally uses a helicopter for rounding up cattle and is using dogs for the first time in one area.

But the biggest change on the Matador is the cattle themselves. Historically, the ranch ran Herefords, which Murdo Mackenzie had worked so hard to improve when the Scots owned it. In the mid-eighties, though, the Matadors noticed that their Herefords weren’t fetching top prices. The main problem with the Matador cattle was that the meat wasn’t marbling, so after careful research, the ranch started cross-breeding its Herefords, first with Brahman bulls, then with Black Angus. “We literally bought Angus by the truckloads,” Kilmer says. “Within five years we turned our cow herd black.”

Although its focus is on producing beef, the Matador is diversifying in one area: It’s allowing a lot more hunting. Mule and white-tailed deer, quail, turkeys, and doves are plentiful, so the ranch is leasing more of its acreage to bird hunters and offering guided deer hunts.

Kilmer drove me out to one of the corrals to watch a crew branding the black calves born this spring. Branding is one thing that hasn’t changed much at the Matador, except that now the ranch hands heat the irons in a propane burner instead of a campfire. As the cowboys seared the V brand into the hide and a sweet, smoky smell filled the air, a hundred years seemed to fade away. One part of the Matador legend, at least, lives on.

Related Content