By Gerelyn Terzo, Global AgInvesting Media
While a deep connection to the land is common among ranchers, few have had the opportunity to forge that relationship as early in life as John Heyneman. As a Wyoming rancher with deep roots in the West, Heyneman embodies a commitment to land stewardship and conservation that transcends tradition. Growing up on a ranch in Big Sky Country, and with a strong family connection to the Padlock Ranch in Wyoming, Heyneman’s path has always been one connected with the land.
His mother Susan had a lot to do with it, though it began with her father Homer Scott who started the Padlock Ranch. After growing up in Sheridan and on the Padlock, Susan married Jack Heyneman and moved to his ranch outside Fishtail, Montana. It was there that they grew their extended family and John’s oneness with the land became undeniable. Upon visiting the family ranch decades ago, novelist Wallace Stegner recognized the young Heyneman’s gift for ranching and had this to say of the natural-born rancher in “Crow Country”:
“But of John, eleven, there is little doubt. He is an all-purpose ranch Superkid, a 4-H’er, a great-egg-producer and calf-raiser, a bull-rider and bronc wrangler who prefers to ride backwards, or upside down, without saddle, bridle, or hackamore. . . . Here is the one who will be fully competent to take over the ranch. Privately, Susan thinks he may be off flying airplanes or climbing Everest.”
These days, as chair of Padlock’s board, Heyneman continues to set the standard for ranch stewardship. His work focuses on innovative land management practices and ensuring the sustainability of ranching for future generations coming up behind him. Next month, Heyeman will be joining GAI’s esteemed panel on long-term land stewardship at Global AgInvesting in New York. He spent some time with us ahead of the event to share his insights on balancing tradition with progress, and his vision for the future of ranching in the American West.
1.) GAI News: How has your family’s legacy on the land shaped your own approach to ranching and conservation?
Heyneman: “I grew up on a family sized ranch in Montana with my mom, dad and bothers. My Mom was the daughter of an empire builder and after she met my Dad, she was happy to live with some anonymity in Montana. I grew up in the pure-bred industry and didn’t come to the Padlock till I was in my late ‘20s. The opportunity to work at this great big place was incredible. I fell in love with it.”
2.) GAI News: What does ranching look like for you today?
Heyneman: I’m incredible blessed in a number of ways. “I’m involved in operations at the Bench Ranch in Montana where I grew up. And, I’m the chairman of the board of the Padlock Ranch, a huge place on the Montana and Wyoming line owned by the Scott family with roughly 10,000 cows. It’s an integrated operations so we raise our own forages and operate our own backgrounding feedlot. Nothing we do is unique, but our scale is unusual. Another unusual aspect of Padlock is that we operate on the Crow Indian Reservation primarily on leased ground. The Reservation has some excellent grazing, but also has significant challenges. The complexity of our operations make Padlock is an amazing place.”
3.) GAI News: Do you spend most of your time at the Padlock Ranch?
Heyneman: “My role at Padlock is almost completely of that of an Owner and Board Member. I live near ranch headquarters and try to join crew work when I am able, but I’ve got no formal role with operations at the Padlock.”
4.) GAI News: How do you keep the ranching legacy going with the younger generations?
Heyneman: “That question is at the crux of where I spend my energy. I am generation three. We are wrestling with how to foster a connection between generations four and five and the land. It’s an ongoing debate – the family becoming disconnected is our biggest challenge and threat to our organization.
“There were 19 – now down to 16 – in my generation. There’s more than 50 across the next two generations. Our ownership structure creates an incentive to passing it down to the next generations. My kids own more of the company than I do. But it’s hard to have a connection with something that big. Very few of the younger generations grew up on the ranch. But we elders are very committed to holding the ranch together.”
5.) GAI News: What has been the secret to the Padlock Ranch’s success decade after decade?
Heyneman: “The Padlock Ranch has operated with a core set of five principles developed 20 years ago: excellent people, stewardship of our natural resources, profitability, positive member of the community and serving as a legacy for the Scott family. Those five elements of purpose still guide management in their decisions today through unique challenges that come along with this complicated industry.
“One of those pillars is financial excellence. The reality is that there’s a lot of us in our family and the ranch is really big. There’s only one from my mom’s generation left – my mom’s younger brother is the only one from that generation alive. In their day, they could have, and I think would have, propped up the ranch in times of fiscal need. But today there’s too many of us, and our connection is less steadfast. So, the ranch must stand on its own financially, and it’s doing that. Having a focus on financial excellence has been paramount.”
6.) GAI News: Can you share about the value proposition in ranching?
Heyneman: “What is unique to agriculture and animal agriculture in the West, in particular, is that the appreciation of the underlying land greatly outpaces the value of the product, beef. It’s an unattractive return compared to the value of the land investment. We create widgets – beef is a commodity. But it’s done on land that is appreciating rapidly, especially on land near mountains or live water.”
7.) GAI News: What role does technology innovation play in your ranching operation?
Heyneman: “Padlock Ranch is an interesting combination of 1860s technology and 2020 technology. Our livestock people are riding horses, and managing cattle on rangeland. Cell phones may be their most impactful technology. We are a very punchy cowboy outfit. But we are also a contemporary farm. We operate with variable fertilizer rates and variable planting densities. We gather and utilize extensive soil data. We’re not growing row crops, but for the Rocky Mountain West it’s a very sophisticated farming operation. We’ve embraced technology and we always looking to increase farm production.
“We believe water will be in short supply in the future, so we think our investments in water infrastructure will be some of our best capital expenditures. We don’t have much rainfall – everything we have is through irrigation on the farm and stock water development. Our animals drink out of stock wells, not flowing water. If we can more efficiently use what water we have, which is limited, maybe that increases our output at the same time and maybe that’s a better investment than buying additional acres. That same philosophy is manifested through livestock operation. If we can make water improvements that allow us to get more use of the acres we have, that’s a smarter investment than buying additional acreage. Every ranch in the West has underused acres.”
8.) GAI News: How would you characterize the investment opportunity in agriculture ranchland?
Heyneman: “Ranchland is an incredible investment opportunity, but like anything else, it is not a sure thing. If you buy a ranch, I’d argue the best you can expect from cash flow is for it to pay for operating expenses. It won’t pay for the original investment until you sell it. It’s difficult for generational ranchers, because you only realize a return when you sell it, and when you do that you sell your history. So, it’s complicated emotionally. If you’re an investor, it’s more straightforward.”
GAI News would like to thank Heyneman for his time and contribution to our long-term land stewardship series. You can hear more from him and other panelists at GAI’s upcoming U.S. event, which is taking place April 22-24 in New York. Find out more about attending or sponsorship opportunities here.
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