The Maddox Ranch: Getting Out from $3 Million in Debt

HMI recently attended the Texas Land Conservation Conference March 1 – 3, 2017 at the Hilton Austin Airport Hotel.  HMI had a booth at the conference and was also a presenter at the conference as well.  One of the stories shared at the conference was from Holistic Management Certified Educator Peggy Maddox.  We’d like to share her story with you today.

The Maddox Ranch: Getting Out from $3 Million in Debt
by Peggy Maddox

As we look back over our life in the ranching business, there are sign posts that appear and one can say, “I was changed at this point in my life.” Joe and I have three such sign posts we can point out that changed us.
The Maddox family began practicing the principles of Holistic Management in 1986. The road that took us there is the same as for many others — “We aren’t making it in ranching. After 70 years of ranching, spanning four generations, we were nearly bankrupt.” We could see that the land was deteriorating, more bare ground and invasive species, and we knew that our stress level was only increasing.
Our ranching operation was located in Mitchell and Nolan Counties of West Texas. We ranched 22,000 acres of owned and leased property. The livestock was pastured using a light, continuous grazing management practice. Over the years, we had tried cow/calf, sheep, custom grazing, and winter wheat farming. We even summer grazed yearlings on what is now called the Valles Calderas Preserve at Los Alamos, New Mexico. If you were in the ranching or farming business in the 1970’s it was believed that the way to continue to make a profit was too get bigger—get more land—expand. Money was easy to borrow and so we fell right into that trap. You went to the bank and asked for a bigger loan, somehow never expecting to make a profit, but just get by one more year. And that’s the way we had been doing it. We just mortgaged more assets. Maybe it would rain more, or prices would go up. But by the late 1980’s we were heavily in debt.

In 1981 and 1982, our children, Marjori and Dalton, went off to college. I went back to college also because I knew I needed a job to bring in some income. By 1985, I had graduated and was teaching school. Our daughter was married, and we had convinced Dalton to stay at Texas A&M and get a master’s degree because we were not going to be able to stay in the ranching business. It was at this time that Joe heard about a guy who said you could double your stocking rate. He went to San Angelo, Texas, and listened to a talk by Allan Savory. He came home very excited about the possibilities of our being able to stay in ranching. Joe decided he had to go take a course in Holistic Management. Our first life-changing sign post.
Then Joe did a remarkable thing. He took me and our son, Dalton, with him to that course in Albuquerque. The course was 7 days long, and by the end of it we had gotten the message that our situation was our own fault. It wasn’t the weather, cattle, sheep, or wool prices, the government, the banks, or anything else. It was us and the way we managed and made decisions. We never were thinking for ourselves, just going with the flow or simply doing what we had always done. So we had gone to Albuquerque to learn how to double our stocking rate, but we learned a new decision making framework. We learned that we had to decide what we wanted—what was important to us—as a family and in our business. It was great that Joe took the family with him because we all were ready and felt like we knew how to change things.

We wrote our first holistic goal in our pickup on the way home. It was pretty simple—we want to be out of debt. At that time it was $3 million—interest $900 a day. We questioned everything we were doing. We put all our livestock together into one herd—5,000 ewes and 400 cows. We sold property; we sold equipment; we monitored our expenses every day. At one point, we were using a team of mules and a wagon to move things on the ranch. We took more Holistic Management courses.
After learning Holistic Management financial planning, we went to the bank and we asked them not to foreclose. We asked if they would let us just cash flow the next year, and because we had the financial plans that we had learned to put on paper, they agreed. We became proactive, not reactive. In the past, we were always reacting to a crisis. Debt was controlling our lives. We took back control when we began to look at things holistically and with an open mind to a world of ideas. We were not afraid of being creative anymore. We did not borrow any money that year and the bank did not foreclose.

One of the creative things we did was to involve others. The main ranch we had was 17,000 acres and it was leased property. It had been leased by the Maddox Family for 60 years. That ranch was held in a trust by a large bank in Fort Worth, Texas. We went to them and told them about Holistic Management because our land was not the only property they held in trust. We convinced them to send someone to a Holistic Management course. They were able to see the importance of what we were trying to accomplish on the land. After that, we were able to get financial help from the trust to build the infrastructure we needed for the whole ranch land plan. Our owned and leased property was divided into 13 paddocks. Over the next few years, we eventually had the property divided into 65 paddocks. The paddocks varied in size from 95 acres to 1,050 acres.

“Grazing our sheep and cattle together, using Holistic Management planned grazing, became a great benefit,” says Joe. “In just six years, bare ground decreased from 28% to 14% without any seeding of new grasses. Dozens of new and preferred plant species such as Indian grass, Texas blue grass, Arizona cotton top, big blue stem, and hooded windmill cropped up where only prickly pear once stood.”
Changes in the natural environment of our property were very rewarding. Before we never considered the work the dung beetles and microorganisms like earthworms were doing for us. We began to celebrate the signs of their work. And then one day, we found a new spring on the ranch or an old one that had been recharged. We knew we were trending toward the future resource base in our holistic goal.
And then the next big advancement the family made happened when Bud and Eunice Williams came to live at the ranch. Our second life-changing sign post. Low-stress livestock handler, Bud Williams, taught the Maddoxes his techniques for handling all kinds of livestock, managing for predators, plus shearing our sheep the Australian way. Handling the livestock became easier. The stocking rate increased from the recommended one animal unit per 30 acres to one to 13.5 acres. The ranching operation was supporting 30 rams, 900 ewes and lambs, 650 cows and calves, and 800 yearlings.
Over the next 12 years, we continued to improve our financial situation, our land, and our lives, just like we had written in our holistic goal. Dalton returned home and married Gretchen soon after. Their honeymoon was in Amarillo, Texas, for a course in Holistic Management. She told us, “I am a city girl, but I love the ranch and want a family raised in the country.”
Dalton and Joe worked the ranches together. Dalton added a hunting operation to the ranch enterprises. He was always thinking of new ways to bring in income. We changed our bottom line from debt to profit. I was always trying to cut expenses and we had some lively discussions at our planned team meetings. We increased our average gross income to $1400 per day. We cut our cost from $100 per head per year to $20 per head per year.
Each year, when it came time to do our financial planning, we tried to make it a special time, even getting away from the ranch for the planning. We always included more training as part of our wealth generating expense. Dalton used his knowledge, whether it came from his agriculture background or his ability to think “outside the box” to keep the ranch improving its bottom line. As part of our quality of life, we added a family vacation every two years as a must for us. We began that tradition in 1989 and have continued it every two years since.

Training in Holistic Management saved our family from disaster. I think that the looming financial disaster was what made it so easy for our family to make the changes needed and not look back. Over the years, allowing ourselves to think creatively, has helped us to move forward. In 1999, we learned that the trust was planning to sell the 17,000 acres of our operation that had been leased by the Maddox family since the 1920s. Once again we were looking at debt as we began to proactively plan for that sale. This time, the debt required to buy the irrigated land we wanted was not so scary. We knew we had the tools to make the debt work for us. When the sale came and the ranching infrastructure of our home place was moved off, we found our next sign post.

Joe and I received a call from HMI, asking us to check out a property the organization had inherited near Ozona, Texas. Later in 2001, Joe, and then I, in 2002, went to work for the organization whose training had taught us so much. Dalton and Gretchen and their family built a house and moved to the newly purchased irrigated farm. He continues to manage the ranches today while running a real estate business on the side. We have since started our own herd of cattle suited for grass finished beef.

As the family has grown to include six grandkids; two married, one of those expecting, three in college, and one in high school, family vacations are more difficult to plan, but we have one coming up in 2017. We don’t know where we are going yet, but we know we have a tool that will help us keep on track to move toward what we value and help us create the life we want.Peggy Maddox is a Holistic Management Certified Educator in Hermleigh, Texas. She can be reached at [email protected]. In 2003 Peggy created an exciting program called Kids On the Land, which is now a thriving nonprofit getting school children all over Texas engaged in a relationship with the land. Kids on the Land is unique among environmental education programs because it is designed to teach children about the place where they live, using the property of local land stewards.