Need a head or a herd? A Schwertner company can absolutely, positively get it to you overnight.
YOU’RE IN A HURRY to get into the ranching business. You want a hundred heifers the same age and breed and they absolutely, positively have to be there overnight. Who you gonna call? In Texas, the likely answer is Capitol Land and Livestock in the Central Texas town of Schwertner, a company some ranchers call the Federal Express of the cattle business. The largest livestock dealer west of the Mississippi, Capitol employs a battalion of buyers who make the rounds at auctions within a three-hundred-mile radius. Every day, they truck in hundreds of cattle, sort them by size, weight, and sex, line up buyers, and then immediately reload them for shipment across the county or across the world, often within twelve hours.
“We can control everything but the weather,” says Capitol’s 45-year-old president, Jim Schwertner, whose great-grandfather Adolph founded the town around the turn of the century. Indeed, at the moment Schwertner and a lot of other cattlemen are facing one of the worst droughts in decades. Feed prices are high and cattle prices are low. But bad news for the rest of the state may be good news for Capitol. Because its revenues are directly linked to the number of cattle it handles, it is one of the few companies in the state positioned to profit from hard times. As ranchers have begun reducing their herds, Capitol’s head count—1,100 cattle per day—has shot up by 30 percent.
That influx has made Capitol’s method of operation even more vital. “We use a hub system,” says Schwertner, explaining that just as most FedEx packages pass through Memphis, all Capitol cattle pass through the town where the company is headquartered. Most go to feedlots, the rest to ranches and packing houses; Schwertner rarely knows where the cattle will end up until the last minute. “We speculate on almost everything we buy,” he says. “We hedge ourselves through time. We liquidate everything every twenty-four hours—win, lose, or draw.”
As you might expect, Schwertner has the business in his blood. His grandfather Herman traded mules and farm equipment; his father, Eugene, started the company in 1946 and at age 75 still buys cattle. Today Capitol turns around 400,000 head per year—7 percent of the total sold at auction in Texas—and its annual revenues approach $150 million. Capitol’s parent, Schwertner Farms, also owns and manages 23,000 acres of farm and grazing land in Bell, Williamson, Travis, Bastrop, and Caldwell counties.
If the weather stays dry through the summer, Schwertner says, Capitol’s business could jump by 20 percent in 1996. Of course, higher volume this year will mean lower profits in the future, as ranchers will have fewer cattle to sell. Yet Schwertner calls the drought a “blessing in disguise.” The industry simply has too many cattle, he insists, and a reduction was inevitable. “After this liquidation is over, prices should shoot up,” he predicts. Right now, the only thing that would please ranchers more is a week of rain.