Practically Ranching
Join Matt Perrier as he visits weekly with interesting, thoughtful, entertaining individuals within the beef community. Conversations will inspire curiosity and creativity while maintaining the independent spirit and practical nature for which ranchers are known.
Practically Ranching
#70 - Don Schiefelbein, Authentic Matters Most
Don Schiefelbein is President of Schiefelbein Farms, a large seedstock operation near Kimball, MN. He is the past-president of the National Cattlemen's Beef Association and the American Angus Association.
In this episode, Don outlines his family's business structure and efforts to sustain their family business for generations. He also shares his hopes and vision for the beef industry leadership in the National Cattlemen's Beef Association.
Links:
Grappling with the Family Farm - Sports Illustrated Vault | SI.com
Thanks for joining us for Episode 70 of Practically Ranching. I'm Matt Parrier, and we are here thanks to Dale Banks Angus, your home for practical, profitable genetics. We'll be opening our Spring Private Treaty Bull Offering on March 12th, so stick around at the end of the show to hear details about the bull offering. This week we have the second of several conversations that I recorded while I was at the Cattle Industry Convention and Trade Show in San Antonio last month. Don Schiefelbein is a leader in every aspect of the word. I first met Donnie when I interviewed with him for a job at the American Gelbvieh Association almost 25 years ago. I didn't take the job, but Don really impressed me that first time I met him as a highly motivated, straight shooting student of the industry. And guess what? He hadn't changed a bit. In this episode, we talk about two main topics. First, Don goes into depth about the business structure of Schiefelbein Farms, his family's operation near Kimball, Minnesota. it is owned by him and his eight brothers and their families. It's a fascinating story and history and a tremendous model for how a large family can grow a production ag business to make room for everybody who wishes to come back to that farm. In the second half of our discussion, we talk about leadership, specifically within our nation's beef industry organization. Now rest assured this isn't going to be your typical membership drive, but Don shares why we need more members, more engagement, and more visionary leaders in the National Cattlemen's Beef Association. Now as aggressive of a competitor as Don is, We don't even touch on his family's wrestling careers and all the competitive nature of those brothers, but you can click in the notes, to read a Sports Illustrated article that was written back in 1991 about the family. But as competitive as Don is, he's also a consensus builder. He not only expects input from others, he demands it. From his family farm to the industry organizations that he has led, he proves that someone doesn't just need to be a yes man to be a good leader in an association. They need to be authentic. They need to be willing to listen and ready to take action. It's why I think you'll really like this conversation with Don Schiefelbein. Tell us kind of the size and scope and, and, family members that are involved and everything else. You won't want to go individually because that may take the hour podcast, but tell us if you would,
Don:a little bit about, uh, Schiefelbein Farms today. Well, as you know, it's an all family operation. So. Unlike many operations of our size, we have no hired help, so every job done at our place is all family. And it started with dad, he, you know, he started with dad and mom, began the operation. They started to have one son and grew the operation for one son, then they had a second son. Grew the operation to hold two sons, and then three sons, and then four sons. Five, six, seven, and eight sons. And finally the operation grew to nine sons. So nine boys, dad ran the table. baseball team of nine boys, uh, miraculously, and everybody said he couldn't do it. They said, Frank, you'll never even get three of these sons to come back and farm with you. And he did eight of nine. So one of my brothers did not come back to farm, but eight of nine all farmed together.
Matt:That's amazing. And no sisters. No sisters
Don:that we know of.
Matt:That's good. That's good. And the range in age of all nine of you is how many years?
Don:Today would be 20
Matt:years roughly.
Don:All right. 20 year span. We're good Catholics, so we're pretty regular.
Matt:That's good. That's good. That's very good. So the first question on anybody's mind is how in the world does everybody get along? Eight different families. And now you have
Don:We have seven in the next generation. Okay. That's what I thought that are back. Yep.
Matt:So all total, you've got 15. And are those all male Schiefelbeins? They are to this point. Okay.
Don:And that's all been a little barrier that we, you got to mature as you go along and get everybody comfortable. Right now, our growth effort has been so much labor focused, we need the young, strong backs, if you will, sure, sure, that there hasn't been as much need for People who aren't going to be the ones lifting the bales every day.
Matt:Gotcha, gotcha. Well, with technology and some changes therein, I think that opens some doors. It will, it will. And in your particular case, if any of your children come back, it's definitely going to need to, uh, Yes, because I've got all three daughters. Yes, yes, which is great. And our daughter Ava has gotten to know at least one of your daughters, I know, at K State. And so that's, that's great stuff. how, from a structural standpoint, and we can get as deep into the weeds as you want because this is really interesting to me about how you all, keep everything going and make decisions with an operation, A, of that size and scale, but B, where all the labor, all the management, all the business decisions, all the strategy, everything comes from within Your family. How do you do it? How does everybody get along and not get too territorial?
Don:Well, I'd be lying if I said we all get along all the time, okay? And it would actually surprise some that when there's 8 of you, or 15 when you go with the outside family members, or with the family members in the next generation as well. Wow, I mean, basically, you could be mad at a brother for a long time and it not even impact anything, right? There's just so many of us. What Dad did when he set it up, and I think it was absolutely genius, you may know the story, but he basically sent us out to colleges across the United States. And his idea was gather information far and wide, and once you gather that information, come back home with something that you can bring to the table to grow the pie. So, from our standpoint, and I'm sure you're familiar, is like, we got degrees then from Kansas State, Iowa State, Michigan State, University of Minnesota, North Dakota, South Dakota, Texas A& M, and Colorado State.
Matt:Wow. And so was that specified by your folks that each of you have to go someplace different or did they just kind of gently push you or nudge you? How, how was that all structured? Or did he know you're going to A& M? Nope,
Don:it was totally your choice. Now, as the, you can imagine as a 20 year span of the children, right? Right. Okay. Dad tended to direct you kind of towards which college was.
Matt:The leader at the time. And
Don:so that's kind of how it evolved. Where we went, why we went, when we did.
Matt:And then I know you and Tim, went elsewhere to work, straight out of college. Did everyone take a place of employment after their undergrad, or did some come straight home?
Don:No, some came straight home, but the rule was for dad is, You didn't have to go to college after you graduated, but you had to leave the farm for four years.
You just had to go somewhere.
Don:Most of them chose to go to college. One brother went to the school of hard knocks. He didn't go to college. But, uh, you had to leave for four years. Then you came back with knowledge to say, okay, now what can I bring back home? And before you come back home, it was very different than in a lot of cases today, where you have a last name right to come back home.
We
Don:basically had to interview back home to how you're gonna do what you're gonna do so that you grow the pie so that because you're back, the operation isn't dividing the pie more ways, it's growing the pie, and the net effect is having more pie for everybody.
Matt:That's, that's fascinating. So that interview process, when you decided it was, and let's just take you for instance. I know everybody's was probably a little bit different, but um. When you decided that, hey, it's time for me to leave the, and I guess we should say you moved up the ranks and were executive director, executive secretary, CEO of the American Gelbvieh Association, um, and then moved back to the family farm in, what, 2003? 2003. Okay. When you did that, in that interview, how was that structured? I mean, Were your folks actually, or was your dad actually listening in that interview to what comes out, and then I know where Donnie is going to be, or was it just a thing that you have to do, but in the back of his mind, he already knew what you were really capable of and what you
Don:were destined to do? In my situation, it's probably different. It probably has more merit in the grandchildren phase of it. Okay, fair. I had established with Timmy, those South Dakota sales where most of our revenue was occurring. So I was well established. You were a value creator for the operation and you were the ones creating the sales and getting the bulls sold, etc. So that was where we were contributing at that time. Where it really has merit now, and this is where most operations get into trouble. It's not the first generation. They usually are the ones that Figure out they have to bust their butt and they've got to earn it. But once you create an asset that somebody can use and are used to using and not having to pay a fee to use, it becomes real complacent for a lot of folks to say. Uh, I'll just live on what's been made. And that's where Dad drew the line, and it was when the grandkids came back, by and large, saying, okay, if we're going to come back, you're not just going to take your dad's role, or you're going to take some sub par of the group from the, some of the whole, you're going to say, how are you going to carve out more space for us to be more successful long term in the operation?
Matt:So it's not, I know some families will set it up as when you come back, you have to bring business that day. You have to either start a new segment of our business. You've got to take on some extra grass or some extra cows or whatever the case may be. It sounds like your setup was more that if we hire you, you're going to come on board and we expect you to grow our business in some way, shape, or form. It's not that you have to bring assets to the table.
Don:We're actually maybe a notch more formal, so you have to be gone for four years. Okay,
Matt:right.
Don:You come back and you have to present us with an interview where, what is your plan? Okay,
Matt:so you have a plan of how you're going to pay. What do you
Don:entail? What are key elements are you going to bring to this operation to make it successful? Then what we do different than some. Is, we accept the plan and we may adjust the plan with them and say we think you should do X and Y or we really need Z done. Okay? But then what we do is we do a tenure period of five years. So you are just, as an employee, not a part owner, for five years and you're earning your tenure. You're earning your ability to stay a full partner. And at the end of five years, we vote on Did they accomplish what they set out to go? Are they growing the pie like they said? And if so, do we vote them in as a partner?
Matt:Interesting. Has anyone, stop me if I'm asking too many questions and getting too deep, but has anyone not made the vote thus far?
Don:They have not, but as you can imagine when you're going through that period, and you've been in a family situation. You know if you're doing good or not doing good, right? And so you learn and you say, I better start drifting back here to the left where I need to go. Right,
right.
Don:And so it's been actually incredibly a positive situation because believe it or not, it's unhealthy for young people coming back not to have a true purpose. Sure,
sure.
Don:What, what are you bringing to the table and make them feel like I'm not just Don's nephew who's carrying on his coattails, right? I'm blazing my own trail here too, and this is how I'm doing it.
Matt:And so how do you divvy up, let's just start at the tactical level of, of, you know, cleaning pens or building fence or some of these things that, that, you know, may be considered a little more monotonous types of jobs. Um, gets to do those, or do you have so much breadth and depth that there's somebody that absolutely loves doing some of the tasks that someone else Despises and does it just work
Don:itself out The answers both? Okay, but but the reality is and that's that's we're growing up as a pure group of brothers Nobody feels they're exempt from having to work.
Okay
Don:Everybody feels, when it's hay time, guess what we do? We square bale hay, right? When it's time to process calves, guess what we do? It's time to process calves. When there's time to build fence You're
there. You're there.
Don:We build fence. And there isn't like, by gosh, I am Don Schiefelbein, president of Schiefelbein Farms, I do not fence. There's none of that goes on and it wouldn't carry water with anybody if I tried that.
Matt:You probably wouldn't be president next year. Exactly. Exactly. I think that's part of your structure. And again, I'm getting ahead of you, but as president of Schiefelbein Farms, you're, I believe, elected to that position by your board. Yep. Which is made up of whom?
Don:Each one of the family streams has a leader. Okay. Right now it's all brothers, right? Because they're all still alive and they're all still active.
Okay.
Don:But the way our system is set up is when let's say my oldest brother Frank, if he were to pass on, he would pass his voting decision to one of his sons who are back with the farm. And the reason we did it that way is because that way no one family Can begin to corner the power structure of the whole family.
Matt:Okay. So there's basically eight board member positions. And at least, unless something changes in your structure, that will maintain throughout. Whether you have one, zero, three of your kids come back. Correct. There'd be, there, that would, that would be static. So that's interesting. Correct. And then. That board votes on what, besides who the president is?
Don:The big things on the overall, what is our strategic plan for the coming year. So just the big, the macro things, the big things of, are we going to be a growth position? Are we going to be aggressively purchasing land? What is the vision that we have for the coming year?
Matt:And then within those, if you're president, do you also have a CFO or individual, um, folks that are a sublevel below you as managing another component or the farming or the cattle side or things like that?
Don:And let me make this, this real clear because you said level, and there's no levels with us. Okay. I want to clear that. Absolutely. Good. So, even though I have a title that says president. The group trumps the president, okay?
Matt:No veto power.
Don:Yeah, exactly. In our system, the group trumps, regardless of your position, what you may think we ought to do.
Okay.
Don:So we have a chief operating officer, somebody who calls the day to day operations.
Sure.
Don:Okay? He calls day to day, but if he gets out of hand, the group can always trump him, they can always trump me, the group still drives decision making, and it keeps that balance of authority in place, and this is the wise thing that dad did, is you don't want somebody to be in a position where everybody's angry at him or because they're envious of him. They're saying the reason he's there is we think he's the best at it. He has no more power than I do. But he's more capable in that area to make that part work the best for us. And we take the politics out of it that way, so that, uh, Boy, the title president sounds good, but the reality is, do they want to do the book work?
Probably not most of them, right? Probably not.
Don:Okay, and they're saying you're best equipped probably to do that book work. You're probably more equipped to doing some of the public relations that I do, and so let's put the best people in the best places, and this is what dad did, which I thought was, uh, ingenious. Regardless of age, where they need to be. So just because you're the oldest doesn't mean you are the president, right? You used to say, well, let's put the skillset where the skillset belongs and let's grow the way we ought to grow with people doing what they're best at doing.
Matt:And what's fascinating to me is that as competitive and capitalistic of a family as what you all are, it almost has hints of this commune or socialist type of structure, so the business can be as effective. And there are ironies there, but it is fascinating that that's how, that's how your folks set that up. And, and, uh, going forth that it's obviously withstood the test of time.
Don:And dad actually has been on record saying from a, from a management standpoint.
Matt:Right. If
Don:everybody gets along. Communism works really well.
Matt:Interesting.
Don:Yeah. And so if you look at our system, it is very much along that way. It's just, uh, we have checks and balances to hold everybody accountable, but the whole idea is if you cooperate together, good things happen. Yeah. And I'll add one thing that'll even make it even more communist sounding.
Okay.
Don:Okay? Regardless of how long you've been working there, regardless of your age, Regardless of whether you're a brother or a nephew, everybody earns the same. Wow. Okay? Where we are set up is, the differentiation where you really gain value is profit share is everything.
Okay.
Don:And profit share is divided equally among the workers, 50%. And 50 percent among the owners. So that's our distribution, if you will. So all we do is take the net profit, half of it gets divided up among who owns the business, where the brothers primarily own it, there's nephews that are getting increasing percentages of it every year, okay? The other 50 percent gets divided equally among the workforce that created the net gain.
Matt:So, total workers today would be how many?
Don:Would be 15.
Matt:that's what I thought. Eight brothers
Don:and seven nephews.
Matt:Nephews. Now let me correct it. They aren't
Don:all vested. You have to be vested to get the profit share.
Matt:Okay. Even on the worker side of things. Even on the worker side. Okay. Yep. And so that's that five year tenure. Correct. That they're on their way, hopefully.
Don:Correct. Yep.
Matt:from a structure standpoint. And I think sometimes as we talk about generational transfer and ownership and things like this, we get too hung up on estate transfer and the death tax and all these things. Share if you will and if you can. What kind of business structure? I mean, are there LLCs? Is the grand umbrella organization different? How did you set that up? And I remember you saying, I'm leading the witness here a little bit, but I remember you saying one time on a panel. 15 years ago that, um, you talked about how you set that up and when attorneys got involved and things like that. But share a little bit about, about how that structure is today.
Don:Yeah. And it actually has evolved and that's the idea everybody has to get in their mind. Things can evolve. So they, they worry about getting it perfect first. No, do something first, perfect as you go along. And what. What creates a lot of people from getting into it is they want the perfection from the start right off
the bat, and
Don:you really learn by doing, and we really haven't perfected our operation till we are probably 10 years into actually trying to live the rules we put into place, right? The way we are structured is our operating companies. So we are separated into two operating companies. We have a feeding operating company, and then a farming seed stock operating company. So it's Schiefelbein Farms and Schiefelbein Feeders. They're both limited liability companies. Okay. The key is we have our land in a LLP, limited partnership.
Matt:Okay,
Don:gotcha. So Schiefelbein Angus Farms Limited Partnership. So that's a partnership. So that's very different than an LLC. That is where all the land gets held into. The way our operation is set, and it's, it can be set up differently forever, but the way our operation is set, the way dad set it up, is the land is the key to the success for the operation long term. It's the big asset, right? Sure, always. It's the big asset. So, when land goes into the limited, uh, partnership, it's in a lockbox.
It doesn't get sold. So
Don:you can transfer ownership. I can transfer it to my daughters, and you can transfer it to your sons, or whomever. But you can't get it out.
Matt:Interesting. Okay.
Don:But we, we basically, the operating company, Farms, the LLC, rents the ground,
right,
Don:from the limited partnership. Okay, so income flows into it. Okay, and then that income gets distributed back out to The owners of the land. And it allows, and as you know from estate planning, what you really want to do is you want to transfer assets that are appreciating, not depreciating, right? Sure, sure. So you want to put it in that lockbox, okay? And then when it's in the lockbox now, you can be free to transfer it, get it out of your name early, so that as appreciation occurs. You're safe from an estate planning standpoint. So it's in the lockbox. My daughter can have lots of acres in that lockbox, right? But all she really has control of is she gets the dividend receiver from the rent money that it earns. The other thing we did differently than most on that limited partnership is there always has to be a general partner. Okay? Okay. So in a limited partnership, there's a general partner. And he is God. Okay? General partner can do anything. Okay? They can sell land, they can mortgage land, they can do anything. Okay? Dad used to be our general partner.
Matt:Right.
Don:When Dad, when we were transferring it over, Dad was like, Well, Donnie, you become the general partner. And I stopped and I hesitated. I want this, because I think it's a worthwhile learning experience here. Sure. How are your other brothers going to think if you have full control over the biggest asset on the operation?
Matt:Just what he didn't want from the whole farm structure.
Don:Exactly. And exactly. And I said, Dad, that's not going to work. So we, midstream, we changed that before we initiated it. And we made the operating company, the LLC, the general partnership. Oh,
Matt:okay. So
Don:they are the general partner for the LLP.
Matt:So when that LLP was created, did you move? Obviously as you purchase land and expand, that goes into the LLP. The original acres that were already in the operation, did you transfer them over at that point in time?
Don:We did.
Matt:So you can move that into a partnership. It's just that the different partners own that and their percentage of that ownership in the partnership is if they put a hundred acres in and there were a thousand acres total, they have 10 percent ownership. That's exactly how the
Don:math is done. And every year, the only land that goes into the lockbox is paid off land.
Okay.
Don:So as you're paying for land outside, the operating company's paying for it, right? Okay. And so, when the land is paid for, whoever the current owners are in the operating company, become the transferees into the lockbox.
Matt:Okay.
Don:You follow me? I
Matt:think.
Don:Okay. So, if, for example, Dad is no longer in the operation. Okay? My dad passed away. There's eight brothers, and now four, I believe, vested nephews. So there's twelve of us.
Okay.
Don:If we pay off land this year, that acreage, divided by twelve, and those various names, get transferred into the lockbox. Okay?
Matt:So there won't necessarily be Don Schieffelbein goes out and buys a quarter of land and it goes in and that increases his percentage ownership of the LLP. It's still entering into that LLP through your LLC. Correct. Okay.
Don:Correct. Got you now. Correct. Actually, you have to go out and in to be actually more technically correct. Okay. So, you do have to go out and in, but we do that all in one seamless transition. Sure. Sure. Yep. Yep. And so then it begins to grow, so your percentage begins to flex depending on how your ownership goes. And a good example of this to visualize is my brother Mike, right? Right. He's the one who never came back.
Okay.
Don:So, but he got Dad's initial one eighth of the land. Gotcha. You follow me? Yes. Because Dad wanted all of his land to go equally to his brother's.
Right.
Don:Well, since that time, as our operation has continued to expand, Mike's percentage share In the lockbox,
is less,
Don:is less and less and less as we keep dumping it in. He's got equal or more value as it's appreciated, but his percentage number is less.
Matt:Gotcha.
Don:Gotcha. Yep. Yep.
Matt:That's fascinating. And you know, that's, to me, a pretty complex structure, but it has to be. In order to do what it is that all of you and your families need. And that's something that I remember when we were on that panel. It was at an NCBA Cattleman's College, like I said, I, maybe 15 years ago. But I remember you saying that as folks look at starting this generation, this estate planning and transfer, everybody wants to go hire the lawyer and say, draw up a deal that fits us. And your advice to them at that time was, do not hire the lawyer until you've already figured out what will work for you. Then hand it to the lawyer and let them put it into the legalese that will hold up in a court. But if you go to a lawyer and just say, hey, we need you to draw something up, it's not going to be right. Yeah,
Don:and it costs a fortune. Yeah, exactly. You know, because they're rethinking and there's multiple iterations and you can't afford it. If you tell them precisely what you want, lawyers can convert stuff to legal ease for relatively cheap. When you ask them to start thinking, the bringer starts going in terms of dollars. It's thinking it's hard for them to put a price on in terms of what it costs for them to think that up.
Matt:Yeah, yeah, it's uh, no doubt about it. And, and I think that it gets more confusing if we don't already have in our mind designed out what we, what we want the outcome to be at the very least. Exactly. And then they can draw it up and write it.
Don:And, and everybody can do it differently, I'm just telling you our situation. And the reason we're, we're locking the land up as you know, is that's where all the real asset is. And if you look at most of the reasons family operations don't exist, it's because they had to break up the asset of the land. If you can allow that brother or that sister or that relationship to still get economic opportunity from the land they own, but not have to sell it out completely, and they know it 5, years before something occurs, All of a sudden, it's changed the whole dynamic that my children, as an example, are never expecting to get a thousand acres for them one day to sell. They know they'll be getting their rent value from those thousand acres.
Matt:And I think that, as we talk about, sustainability of a business, and as we talk about legacies of a farm and ranch, and all of these things, you've almost formed your own land trust. I mean, you've almost put that into perpetuity that it will be a productive agriculture business for as long as the majority of your owners or shareholders of Schieffelbein Farms. You understood it perfectly. You can't sell a little bit out from under the group and make it hard for the group to carry that business on.
Don:And dad's vision and dad's actually rule was: He wanted all of the advantages to be with those that run the land. And that's what it is, right? Because you could sell that land and get more money for it for those that are not part of it.
Sure.
Don:But that's not the way the rules are written. The rules are written that the land is to serve those that operate the farm.
Matt:Interesting. That was, I mean, so visionary and so insightful. And, and, uh, yeah, it's, it's hard to look that long term and make it where everybody Gets what It is quote unquote fair and equitable, however you structure that, but yeah, that's, it's a great way to do it. I mean, it's a great way to do it. And everybody, like you said, does it differently, but I think that gives, hopefully gives all of us, at least a perspective of what can work as we look at these, these difficult decisions. Let me add one more thing to
Don:you. I mentioned early kind of casually that we're Catholic, right? Yes. But the, the other thing that plays into this is, as you know, sometimes marriages don't work, right?
Right.
Don:When it's in the lockbox, whether you make a good or bad decision with who you choose to be your wife,
it
Don:doesn't matter because it's in the lockbox, right? It just may not be your name that's getting the benefit. It might be that ex wife getting the benefit. You follow me? And so it really keeps a divorce from having a breakup of a family. Interesting.
Matt:Interesting. It may break up the, that couple and that part of the family, but not the whole family farm or ranch.
Don:Yes. And they may choose to buy each other out, if you will, in that partnership if they wanted to. At some decrease more than the value, right? Because there's limited cash value to it. But as you know, I said before we're Catholic. We've had zero divorces to this point. We're 15 in a row. So we're, we're crossing our fingers and hoping things go well.
Matt:that is a challenge on so many levels and it never fun for anybody. But dad never
Don:wanted to be the one to get in there and say, you know, they have all these advanced prenuptials and all these things you do now. Right. Dad was never one to begin A relationship on a negative. And he said, let's build the rules behind the scenes so that you don't have to put these created negatives up front. We're gonna plan on you succeeding. Okay? We're gonna plan that this marriage goes forward. We're gonna plan on success. But if it doesn't happen to be this way, our safety net is it's in a lockbox. Wow.
Matt:I never got to meet Frank. But I see where your strategic thinking might have come from, because that's again, that's pretty visionary to think through it and make sure that that it can hold up something like that. We could go on for the whole podcast on just this type of topic, and I still would be asking questions, but I do want, because of where we are today, and the meeting that we're at, and in the town that we're at, I do want to touch a little bit on industry leadership, and you have, um, served as a board member and president of the American Angus Association for seven or eight years, I guess, total, with the officer position. And shortly after, what, a year or two years after you finished as president of the AAA, you were president of the National Cattlemen's Beef Association and probably were on the board for what, nine or ten years prior to that? Correct. Are you just a glutton for punishment or how in the world, that coupled with being president of Schiefelbein Farms and family and everything else, how'd you do it?
Don:Well, I don't know if it's how I did. The key is I have the background of all the family members at home, right? And Dad, again, going back to Dad, I'll give Dad credit, is Dad said, You can't complain about an organization if you don't do your time.
Matt:Good for him.
Don:And if you think about those organizations, and we've seen it oodles of times within CBA, It's the easiest organization for people who have never put one effort towards making it successful. Complain about it, right? So dad's deal is, don't complain about it. Engage, be part of it. And let's go about that positive way of doing our part to make it successful. And he, he believed, and I believe it as well, is that if you aren't willing to put in the time, you don't have a right to say anything. Yep.
Matt:And that is what is so frustrating. I've had lots of people, this week. Asked me, you know, tell me about this podcast. Why'd you start this podcast? I said, there's various reasons, but the number one reason was because I wanted to be able to share the conversations that happen at meetings like this. Meetings like the local extension meeting, whatever the case may be. And put that nuanced conversation on issues that, if you just heard at the local cafe or saw on Facebook, And had one guy or gal's opinion on an issue and why they thought NCBA or whomever, was opposed or for this issue, it gets lost. And so that's why I think, and again, I bring up the town, we're in San Antonio, Texas. And in 1996, I was a senior in college. 1996. The National Cattlemen's Association, which policy arm, you know all this as I'm pointing to Don Schiefelbein here, who's given this talk plenty of times. But for the listeners, the National Cattlemen's Association was the policy arm, membership arm of the cattle industry. And then we had the Beef Industry Council, the National Livestock and Meat Board, who, for lack of a better description, oversaw the beef checkoff. With USDA, of course. Those two, and I guess maybe with some other things came together as a merger in 1996. So that was where it was formalized, right here in San Antonio. And in my opinion, of course, I was 21, 22 years old at the time. I thought it was exciting as could be, because finally I thought we're going to quit this island mentality of having the Packers on one island, trying to steal a profit from the feed yards on another island, from trying to steal a profit from the cow calf producer, the stalker operator, or whatever the case may be. And we're going to come together and we're going to build an industry that communicates. Don, I'm not sure if maybe it hasn't even made a bigger rift sometimes between the islands. And that's frustrating to me that here we are. That decision was made. It was the right decision. It was made for the right reasons after a lot of discussion and meetings and everything else. And yet, here we are still fighting about whether we should have merged in the first place or we should still be out here on the islands. What do you think? What, what were the reasons? What are the advantages? What have we been able to accomplish? Because we came together and started looking at these issues from all of our different perspectives. And then I guess we'll also talk about some of the challenges it's, it's brought up.
Don:Yeah, and I, I think regardless of the structure, and people think it always, always is the structure. I don't think it's as the structure as much as it is the people. And I think the key to the structure is getting the right people, okay? And that's where I think we've really come and gone. If you look at NCBA and you look at where we are today, I think we're in probably a better position today than we were probably 20 years ago. It's because we had a leadership group who looked beyond what they decided was right and said, You know what? Let's listen to what that regular Joe's and Fred's and Mary's and Susie's are saying out there, and let's listen to them and let them have a say. So moving it from top down to bottom up, and to me, if you have leadership that does that, good things happen. If you get the leadership that you sometimes get into an organization like NCBA, who are doing it for the wrong reasons, for the power sources, and it becomes top down, bad things happen. So I, I think that's any, almost any organization, but that's why I really believe, and that's why I said it just a little bit earlier, it's incumbent upon those in this beef industry to make sure we have the right people. You know, you can't complain that you're being told how to do things by A person that you don't trust and don't like, and then you don't show up to vote whether there should be the person or not the person. Engage. Choose the leadership. Get involved with the leadership. And, uh, truth or, truth be told, and I don't know if you're one of, there's a lot of folks who never believed that someone like me could ever get elected NCBA president. A guy who pretty much will say what he believes most of the time, almost 100 percent with zero filter. But I'm very transparent in my feelings and I will take somebody else's opinion and create my decisions that way. And I think we need to get back to grassroots people deciding. What's this about? And quit worrying about this complicated structure that we have and vote in good people to do good things.
Matt:Yeah, and you're right. I mean, it doesn't matter what we're talking about. It is the people that make the difference. Um, you can fix a poor structure with good people. You can fix,, past decisions that didn't end up there. You can do all of these things with the right people and then I think the next thing is, not only do we have to have good people showing up to serve in leadership positions like yourself, to vote for those who are about to serve, to vote on those issues, there is an incredible amount of value to showing up to these meetings and just hearing the conversation, the debate in the room. This is the first NCBA meeting that I've been to in like seven or eight years, I think. And I've even caught myself, and I believe that that merger was the right thing to do. I believe that we've had good people making these decisions, even if they weren't on the right side, in my opinion. I think that the intentions have been right. I think that the judgment has been sound. But when I'm at home in Eureka, Kansas, and I hear nothing but This was the decision that NCBA made on whatever issue. Marketing, Checkoff, whatever the case may be. And I don't have the context to hear how they got to that decision and whether or not they considered all unintended consequences of said decision. It's harder for me to sit at home and go, Well, that was the right thing to do. I get out here. And I think I'm ready to fight for or against a certain cause and I get into the room and I start hearing the arguments and I go, wait a second. Maybe I didn't have all the information that I needed to have. And now that I get, quote unquote, outvoted, I at least understand why I got beat. Because There are chances that that guy or gal knew more about this than I did and now that I hear their perspective heck I may even change my vote and we don't have very many people who get this opportunity that's one reason again that I started the podcast so we can have conversations like this because Man, oh man, it is so easy to take one issue Especially if that is a marketing issue we talk imports and exports we can talk checkoff or whatever the case may be It's so easy to take one issue and say, well, NCBA said this about that issue. Well, I'm opposed to that, and I'm not going to pay my NCBA dues. I sat in the Washington, D. C. issues update this morning. They had ten lobbyists that we have working for us in D. C. And they put on the back screen a high point, just a few of the issues that this lobbying team is working on, on our behalf. It was like 50 some different issues. And, uh, most of them, I didn't even realize existed, much less that we needed to be lobbying for, and they told us why. And then I went, yeah, there's a reason that we have a full time DVM who is sitting there watching. When is the next screw worm fly going to hit far enough north in Mexico. And she's been talking about this for six years. Watching that on behalf of cattle producers. I didn't even know she had a job. Much less that she was looking at that one issue. And, and, and formulating policy. Science based, economic focused policy that will hopefully help us as cattle producers. But we never hear about that. Unless we're sitting in the room hearing her talk about what it is she does every day. So. You know, there's, there's, it's such a complex issue, and I think that gets in the way sometimes. Because NCBA has a lot of different components, because it is very nuanced, because the beef industry today has so many components, they can't get on one or two issues and just focus on those. They've got to be on 56 different issues. They've got to also be In a separate set of rooms, figuring out how we do more with less checkoff dollars. And, and all of these different things that are, that are, uh, being tackled at a meeting like this.
Don:And they have to balance that with the political reality, right? That we are one and a half percent of the population. Exactly. So we, we, we, we tend to go into our home communities and think, what I believe God has spoken Then you realize, but you're out voted 99 to one.
Right?
Don:So you have to have the right vision and the right people explaining why it's important. here in D. C. to make sure your message resonates. Yeah,
Matt:and that's tough to do, and they have to play the games. Hopefully, maybe there are going to be fewer games at that bureaucracy level and at that D. C. lawmaking level as we go forth, but there is a certain amount of, like it or not, negotiation and communication, and we have to kind of play the game at that D. C. level. And I, I think that's, while that's hard for any of us to understand, it's, it's well worth having, uh, those dues dollars and those political dollars going to D. C. to work on our behalf. Just like it is good for separately, of course, but those checkoff dollars going to communicate with those consumers on our behalf. Exactly. In the midst of that, whether we like it or not, all segments have to be at that table saying, okay, from the feed yard perspective, this is what we need. From the packer processor level, this is what we need. From the cow calf and the stocker and the seed stock, all these different segments. I mean, we have different perspectives and we're a whole lot better off when we're all sitting around the same table figuring out the good of the one
Don:thing I think that's apparent that everybody gets Is that they, they always say NCBA and you've said it many times, it's almost, it's like this third party, this, this organization far removed. Who is NCBA?
It's us.
Don:Those that are members, right? And is there a restriction on you being a member? No. The quickest way to gain power of NCBA is to gain the most members. Okay?
That's true.
Don:Sign up people. Don't, if you're mad at NCBA, the worst thing you can do is quit the organization because guess what just happened?
Matt:Yeah, you lost your vote.
Don:Yeah, the vote went down. It went the wrong way in your favor. You should not, if you're mad at NCBA, you should gather six people, get them to be NCBA members and strengthen your vision of where you think it needs to go. And that's, I think, the mentality that's a little bit offset with how people think of NCBA. It's a membership organization. Those with the most members decide where we need to go. Get more members.
Matt:It's a little like Having ownership in the LLP at Schiefelbein Farms. The minute you quit contributing more and staying active in your management and everything else, your percentage of that and your ability to hopefully move that business and profit from that business goes down. Exactly. Exactly. What's the biggest challenge, of that merger and the wake? And, and when we talk about the merger, and I had to, I had to learn this myself as I went back, just trying to remember, okay, what year was it? What happened? So I googled National Cattlemen's Merger. And I didn't realize this, but there have been two or three mergers throughout the years. Once in the 50s, again in the 70s. And then again in the 90s of different segments because we were even more fractured and fragmented back then than we are today. But the most recent one is probably the one that all of us or most of us remember or at least the fallout from. What has been the biggest challenge from your perspective of that merger and of the way some people packed up their marbles and went a different direction?
Don:You know, that's, that's hard to say. I, I think if you look at challenges going forward, getting more involvement, getting people to believe it's a system that works, is the key. And right now, I just, I am just so frustrated that people see NCBA, oftentimes, there'll be a bandwagon of people thinking they're the enemy, when they can be the vehicle to do things. You saw the lobbyist efforts. If you get in the majority and you want something done correctly, Wow, we've got an incredible vehicle.
Yep, no doubt. Get
Don:people on board. And I want you to think about this, and this is maybe a challenge. And you've got some history in this. If you look at the history of NCBA, and you look at the history of the leadership of NCBA, how many have come from breed associations or seed stock producers? When you go to the leadership number, it's amazing how concerning the political risk of being a leader in that organization could impact your bottom line.
Yeah, that is true. And you think of it. So you don't put yourself out there.
Don:Yeah, they don't put yourself out there. And I want you to think about how costly that is long term to the industry.
Yeah.
Don:Here are the leaders, and some of, I believe, the very best leaders in the beef business, our seed stock producers, right? Because they are on the cutting edge of lots of technologies, right? Right. But you ask them, do you want to be a part of NCBA?
Matt:It's too dangerous.
Don:It's too dangerous? Yeah. And talk about a bad, long term outlook for your industry. And that's what concerns me the most. Is people, when they thought I was, when I decided I was going to go through NCBA, Whoa, your best bull sale's over. Wow, yeah, and think about the pressure that is people don't want to take the risk of What the naysayers may do. Yeah,
Matt:I get it and and you're exactly right. I mean even of course Kansas Livestock Association is an affiliate of NCBA and So there would be a segment Maybe some that are listening to this today. that would not be members or would have some heartburn over stances that KLA have taken. And we have, as a family, had lost a few customers when Dad or I were fairly involved in KLA. And we still are, but as I was president and things like that, I know there were times when people said, you know, if you're, if you're with those feed yards at KLA, I'm not going to buy bulls from you. And, um, yeah, it's It's disappointing, it's disheartening, um, and it's, it's scary for the future. And I think we absolutely need to break that mold. I
Don:really, and that's one of the messages I'm trying to get across in this podcast. We gotta break that mold. We gotta say, you know what? If you want a successful long term industry, Seedstock guys, put your money where the future needs to go. Get involved. Forget about short term losses or gains, and look at long term what the opportunities are if we could get together. And by gosh, being a seed stock guy means you have a leadership requirement. You better start leading this organization, leading those people and saying, If we don't like the way the rules are written today, Let's change the rules. Yeah,
let's get involved. Let's
Don:get enough volume to change the rules. So I think that needs to be a flip. And that's my only concern. And I don't know if you saw that at our upcoming sale. Okay. We have a guest speaker there. I saw that.
Matt:I did see that. And
Don:I'm throwing that out here because this industry just hates confrontation, right? And they're just like, you gotta be on team A or you gotta be on team B. Okay. For the rest of the folks, who is coming to speak at our sale?
Corbett Wall.
Don:Corbett Wall. And people would say, Schiefelbein, have you lost your marbles? Corbett Wall. I've met Corbett Wall. Do we agree on everything?
Matt:Probably not.
Don:No! Do we disagree on some things aggressively? Sure. But gosh, if you guys want to move forward, the guys you need to get along with is guys who have audiences that you can somehow then gain agreement on and say, we may not agree on this issue or that issue, but we can move forward with this issue.
Yeah,
Don:and to me, that's what's broken in this industry, and you would not believe how many people ththought Scheifelbein had crossed over to the the nefarious land by inviting him to speak. And I'm telling you guys, that's what it's gonna start taking to make this world better. We're going to have to start opening our eyes to other ideas, thoughts, and that's how you move an organization and an industry forward.
Matt:That's a little why, and I've said it time and time again, that's a little why we started this podcast. Because I was tired of hearing these one sided conversations. And, like you, I love having these, I like talking with folks who agree with me. But I like even better sometimes talking with folks who don't, or at least have a different perspective. because, you know, some, always I learn something. Sometimes I may shift my viewpoint a little bit. other times I figure out why I believe that I do. But you have to have those conversations. And like you said, I mean, our industry absolutely hates confrontation. And, um, we And we just shut it down. We put a wall up and we say Nope, not part of our team. And to me that's a deadly wall. I'm not going there. I'm not attending their meetings. I'm not going to the same livestock market. Whatever the case may be, I'm just going to, yeah, build that wall. And
Don:so it raised a lot of eyebrows as I've been walking around here with people suggesting that. But to me it opens up this conversation that's needed saying So we don't want that portion of the beef industry to be on board with what Collectively it's best for the industry, we don't.
We just want to just
Don:force us on top of them. No, you don't win the big war that way. You win it by bringing more people in. By encouraging them with the best thoughts, the best ideas. And saying, you know, now that we have a dialogue, I'm probably not nearly as stupid as you thought I was. Right? And then you begin to lure him in and say, you know what? He, he may have an idea on that. Maybe. So, NCBA is good at defending us in these certain reasons legislatively, you know, because I always do hear that, but boy, Chekhov, we don't, they don't spend the money wisely there. I hear that a lot. Sure. But all of a sudden you start bringing them in and they become part of the solution together.
Matt:And not only do, hopefully, those folks that you bring in see things from a little bit broader perspective, we You and I as NCBA members see, Hey, you know what? There is validity in what it is he or she is saying on this point or that point. And we can make better decisions going forth. And I mean, that's just again, you've talked about growing the pie. You've talked about building a business so that everybody gets a little bit more because the sum total there's more to divvy up. That's it. I mean, if you look at and I love, I absolutely love these charts that showed The total beef industry profitability per head from, like, back in the 1960s. Maybe even you could go back further than that to today. And we sit around there for decades and decades and decades. And the total industry profitability spread amongst 3, 4, 5 different segments was somewhere around 20 or 30 bucks, average. That's not counting all the losses and then one or two good years in a cycle. But we did not move that. We just bumped it around. Somewhere around 96 or 97. And granted, a lot of things happened. We formulated a bunch of, member owned beef companies. You know, value based marketing took root., so many other things. We're bringing consumer dollars in. But guess what else happened in 96? That merger. And we finally got everybody around the same table. And made some hard decisions then and have been ever since then. But we've done exactly what we said we needed to do. We had a more transparent, not less, a more transparent industry that allowed us, A, to talk in the same meeting rooms, and to fight, and to discuss and cuss, and B, To figure out how we get more dollars into the beef industry so then we can figure out and let the market share those amongst all the different participants. But without doing that in 96, without saying that, like it or not, we may have to listen to other participants and other segments of our industry, I'm not sure that we'd be here talking about$2 fed cattle plus and$3 yearlings and knocking on the door of$4 calves. And 8 or 10 or probably at Schieffelbein Farms,$12, 000 bulls. I mean, all of this. Not all. A big part of that, I think, is thanks to those decisions that got us more focused on the industry and on the consumer together. And without that, without that communication, you don't get the result that we've finally seen in 2025. So, If you got the opportunity, whether it's Corbett or whether it's folks that were sitting in that room in San Antonio in 1996, who still maintain that, that wasn't the right decision. what do you say? What, what besides that graph that shows industry profitability, why was it the right decision?
Don:Well, and I don't know whether you decide whether it was the right decision or the wrong decision, what you have to believe, and this is the key for me, is you have to believe people made the best of their ability to make the industry better at the time. Good point. Do I believe that? 100%. Anybody involved in there happened to be at that meeting way back in 1996. I'm a little older than you. So I was actually a participant back then. And by gosh, they meant well, was it perfect? No, absolutely not. Do we need more people involved in this process to make all of our decisions better?
Matt (2):Absolutely.
Don:We absolutely do. And that's, that's my plea to this industry is. Don't make haves and have nots and he's in the club or he's out of the club. Share your opinion, get involved, go to the organization that has the influence to make the changes that matter. Which NCBA is the one whether you like it or not. If you don't like what they're doing, get enough members to make sure you're in the majority, right? And if you're persuadable and it's a good idea, Smart people listen to good ideas.
Matt:That's right, and I've seen it happen this week. I mean, already, and we've barely gotten started in committee meetings, but it's not just the power play states or votes or whatever else that get an ear. And, uh, yeah, it is a marked difference. Let me just go back to
Don:your 1996. If you go back to that 1996, and here was Don Schiefelbein, do you think anybody in 1996, as I was sitting there among the thousands of people there, Looked it over there goes. Oh, that guy's gonna have an influence one day. No, probably not right nothing against you That's just a guy that's taking it in I don't remember us 24 probably or something like that and just taking it all in but if you engage and get involved and by gosh, what I just tell guys is I don't care what your opinion is, I really don't. I, what I want you to do is tell your opinion as honestly as you possibly can. And that's what I appreciate about sometimes the other side's a little better at that than we are. If I were to be critical of NCBA, sometimes we're better at sugarcoating things versus just laying it out. And letting grown men hear things in a grown man manner and let them say, you know what? They're talking straight with us, we know that, and to me that fades a lot of issues that occur, and I'll give you an example of that. Last year I was president, they were saying, boy we need more money, uh, this dues increase is absolutely necessary. As we're going through that process, they laid out like a five year plan on how to convince members that we needed to increase dues. Right. And I just shook my head, and I said. This sounds like a marketing ploy. I said, let's just go and tell them we need the money and tell them why. And let's do it in a year. And guess what? When we did it straight up, when we did it exactly in a simplified, to the member, here's what we need, here's why we need it, here's when we need it. We passed it unanimously in one year. To me, that's the mindset that has, don't play games with guys, talk straight with them, explain the rationale. They may not always agree with you, and you may have a different opinion than, than me. But when you're raising your kids, I've always believed, talk straight. Don't play games, talk straight.
Matt:If we've learned nothing else from The Trump administration. The first one was a precursor. This campaign and two weeks into it has made it pretty evident. I believe that Americans are craving to the point leadership. Agreed. They're tired of the 30 second, well polished soundbite. They want to hear what you think and why you think it. And then they want to make the decision and move on. Good, bad, or indifferent. Let's damn the torpedoes and, and go forth. And I think that's something that all of us can learn NCBA, a lot of our leadership organizations. And, and, in their defense, they've had to operate under this politically correct nature of D. C., especially if they have a lobbying arm, for decades. And they're even a little bit deer in the headlights look like, I can see that the rules are changing, and It's going to be hard to change with them, but I think that Americans are ready for it. We're, we want the facts. Just the facts, ma'am. Just the facts. And
Don:I can tell you, and maybe I'm wrong on this, and I, and I could be, but I had the opportunity to testify on some very contentious issues in D. C. Right. Authentic matters most. Not how you say it, not, not the politically smooth way you say it. If they believe you lived it, They trust you, and you're authentic on what you're saying. That's what carries the water. And whenever you're testifying, and this is my advice to those, don't worry about having your slides perfect, and having the words all spelled out the way exactly this Be as authentic and sincere when you testify. People believe, and that's what matters.
Matt:That authenticity, in my opinion, is what has allowed your family to grow your business and to keep both the family but also your customer base going forward and growing. That authenticity as you were leading the American Angus Association, National Cattlemen's Beef Association, is what gave members the confidence to come to you with ideas and know that their voice was going to be heard. Thank you for doing that. Maybe they didn't like the decision that you and the board made, but they at least believed that you did it in good faith. And I think that's all we can ask for, as members, as voters, as customers, as partners, whatever the case may be. We want to know that those who are leading us are operating in good faith, and they are doing what they think, as you said earlier, is going to be the best thing for all of us. Um, even though it may be in the short term a little bit hard for us to stomach, Well Don, this has been a great conversation. As always, I always enjoy my opportunity. But this one I finally got to record and, and, uh, put out there for a bunch of others to listen to as well. So thanks for joining me and best of luck with the sale. By the time this podcast comes out, it will already probably be in the rearview mirror, but, uh, good luck from this point forward,
Don:Matt. Thank you. And you know, you've always been a dear friend of mine for years, and I appreciate the opportunity to know you. Thanks for all you do.
Matt:You bet. Thank you, Don. Thanks for tuning in to Practically Ranching brought to you by Dalebanks Angus. If you liked this show, even if you didn't, share it with someone you think would enjoy it, give us a five star review, and comment so we can keep cranking the content out. As we said at the start of the show, we'll open our private treaty bull offering at 8 a. m. on Wednesday, March 12th, 2025. The bulls will be individually priced in this list, complete with EPDs and pedigree info and dollar indexes, registration numbers, all the information you'd need. will be available by request the Friday prior. We'll sell over 50 spring yearling bulls that'll be freeze branded, fertility tested, and ready for turnout on a light load of heifers or cows this spring. If you'd like to get the list or find out more about this private treaty offering, email me at mattperrier@dalebanks.com or text 620-583-4305. Send us your email address and we'll get you the information as soon as it's available. God bless y'all. I look forward to visiting again soon.
