By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Rancher James Fuqua fancies himself a soothsayer. In 1997, a rainy year, Fuqua surveyed the sprawling fields of green grass near his West Texas ranch in Quanah and smelled impending peril. The uneasiness prompted him to increase his water supplies and buy every blade of hay he could get his hands on, stuffing his barns to capacity. The following year, West Texas blistered under scorching heat without a drop of rain. Yet while other ranchers wobbled on the edge of ruin, Fuqua thrived.
"I'm an educated guesser, and I don't think the people in Vegas hold a candle to a rancher or a farmer," Fuqua boasted in a segment broadcast in August 1998 on CBS Evening News. But Fuqua was clearly more clever than even his fellow cowboys. Using the Bible (seven years of plenty followed by seven years of famine) and data culled from the National Oceanic and Atmospheric Administration (NOAA), Fuqua charts his business in cycles spanning years. His hay-buying binge and his water-capacity adjustments were prompted by information from NOAA's Web site revealing a sudden sag in ocean surface temperatures off the coast of Peru. The plunge signaled the onset of a strong La Niña, a dynamic that rattles global weather patterns. Since 1998, debilitating drought has choked much of the Southwest.
Parched grazing land isn't the only force that threatens to wither the beef industry. Last May, Canadian beef and cattle imports, some 10 percent of the U.S. market, were abruptly halted following the discovery in Alberta of a case of bovine spongiform encephalopathy (BSE), or mad cow disease. The cutoff struck in the thick of a steady upward swing in consumer demand. Supplies, already depleted by drought, were ruthlessly squeezed, stoking beef prices to record highs. Supplies of top-tier grades of beef, such as prime and the upper end of choice, all but dried up, prompting some to suspect that restaurant menus were infested with counterfeit prime. "It wouldn't surprise me at all," says Judd Fruia, general manager of Pappas Bros. Steakhouse. "You never know. "
But the squeeze eased with a crash on December 23, when mad cow disease was reported in a single Holstein dairy cow in Washington State. U.S. beef export markets instantly evaporated. Prices plunged to $78.50 per hundredweight (79 cents a pound) by February after topping out at $94 in November 2003. The beef industry braced for a devastating collapse in consumer confidence and a barrage of new regulations. "It's been a heck of a ride," Fruia says. Prices inched up in March to $84.
This ride doesn't rattle Fuqua. For years he's been gauging a set of subsurface forces that have long threatened to rip the beef industry from its 1930s-era moorings and shove it into the 21st century with its demands for sophisticated product and tracking information. History may record 2003 as the tipping point.
Consumers, long refining their palates with the Food Channel and fortifying their appetites with low-carb regimens such as the Atkins diet, have grown pickier. "By God, they know their beef," Fuqua says. To tailor his supplies to these market shifts, Fuqua steadily has been deploying an arsenal of sophisticated technology to satisfy consumer demands and to meet rapidly encroaching regulations as well. The new gadgetry includes analysis software, electronic identification and ultrasound imaging technology that allows him to determine the quality of his cattle before slaughter. "They want to know where that beef came from," Fuqua says. "Now the consumer is driving the market instead of just someone shoving beef down their throat." But even with such forward gazing, Fuqua has his work cut out for him if he is to successfully navigate these often unpredictable forces. Ranchers who don't grasp the shifting field simply will be cut out.
"I always thought they were just dumb animals," Fuqua says. "Cattle aren't stupid. Cows have extremely long memories. If you go out in my herd and you aggravate a certain cow, if you come back next year, she's going to know exactly who you are, and she's going to explain it to you."
His U Lazy 2 Cattle Co. has been in his family since 1894. Today, Fuqua manages some 600 head of cattle on his 1-square-mile ranch and another 5,000 head in his system across the nation, which includes a feedlot tucked in the northern reaches of the Panhandle.
Fuqua is careful not to startle his cattle or make them anxious. He shuns electric prods and aggressive swats. "There are actually some people in the world who use buckshot on animals to get them to do what they want them to do," Fuqua says. "Stupid."
He has good reason to coddle his cattle: marbling, the intramuscular fat that adds juiciness and richness to the meat. Marbling can mean the difference between beef that grades prime or top-tier choice--the cuts lusted after by restaurants and hotels--and the more mediocre select; the difference can mean hundreds of dollars per carcass. While just 2 percent to 3 percent of U.S. cattle production grades prime, Fuqua claims between 5 percent and 8 percent of his herd grades at those levels. "Marbling is 'fight or flight' energy," he says. "You don't do anything that will burn that energy."