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Small Town Texas...
by Rachael Jones
A Way of Life - Going, Going, Almost Gone
The scenic town of Llano is located in the ranching country of northwest central Texas. Although the town's population is just about 3,000, recent growth around the lakes puts the total area population at around 11,000. A lot of the growth is due to Llano's recreational appeal: hunting, the lakes and the scenery.
Just east of town, between Walnut Creek and the Old Santa Fe railroad is the Llano Livestock Auction, owned by Hatch Smith, BBA 75. Smith is the quintessential Texas rancher and businessman: tall and rugged, his Stetson never far from his head. He's a fifth-generation Llano native. "My great-grandfather was born in Nacogdoches in 1833 and moved down here to Walnut Creek in 1854," he says. "I'm the last one in our family that's still in the business." Smith hopes his son will want to work with him after college, but he wouldn't blame him if he chose another path.
"This ag business is pretty tough," says Smith. "And when you consider the investment, the returns and other considerations, you've really got to like it because you can make more money doing nearly anything else."
After World War II, Smith's father played polo on the East Coast and raised and sold horses for the sport. But when it came time to start a family, he and his wife left the "fast life" and returned to Central Texas, where they started buying and trading livestock. "The drought of the '50s broke the ranching business, so in 1960 my dad bought this auction because he felt he needed a business," explains Smith. "I moved back here after school in 1975 to join the business and have been doing it ever since."
A commission company, the auction sells cattle almost exclusively. "This is not a real fancy outfit," says Smith. "But it works." On Mondays, the cattle that have been brought in are sorted, identified, and fed. Every Tuesday is auction day, and Smith guarantees his sales. "I don't guarantee the price," says Smith. "But if they bring them, they're not going to have to take them home."
It's a pretty straightforward business. "There's not much regulation," he says. "Any time there's a change in fees or procedure, you have to post it. And periodically we get checked. But that's very seldom because the only thing that's worth anything is your reputation."
"I solicit cattle out in the country. I ranch and I send cattle up to summer graze in places like Oklahoma. Everything I do comes from livestock, I'm not very diversified." When asked if that's unusual, Smith replies,"I don't know if it's unusual, I don't think it's very smart."
The challenges to his business are many, but the greatest is the weather. Another problem, and one that Smith says is relatively unique to raw commodities, is that prices can dip to lows unheard of in other industries. "Last year we sold 8-cent hogs," claims Smith. "Hogs haven't sold for 8 cents a pound since the 30s. That kind of thing never happens in, say, the auto industry or real estate.
"Speaking of agriculture," says Smith. "Having to make a living with all the Aggies around here isn't easy. They really give me a tough time."
"Nearly all of my family on both sides went to the University of Texas, and that's where I met my wife, Fraser," says Smith. "At that time there wasn't any deciding about where you were going to school. You graduated from high school and you went to Austin."
"I had a great time when I went to the University of Texas," laughs Smith. "In fact, I had such a good time that I had to go home for a little sabbatical. I told my dad that I wanted to work for him for a semester and then I would go back to school. My dad told me that was fine, but he said 'Anybody that works for me that doesn't have a degree, I pay $2.50 an hour,'" says Smith. "It didn't take me long to figure out that I was making more money going to school than I was working here. I guess I was learning a lot more in business school than I thought."
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You can find the mayor at your local Grocery
One of the most successful businesses in the West Texas town of Sweetwater began as a disappointing investment. Jay Lawrence, BBA 80, says his grandfather hoped to turn a quick profit on a Piggly-Wiggly. "He bought the store with the intent of selling it to Safeway, which was buying up a lot of Piggly Wigglies and little stores at the time," explains Lawrence. "Then the stock market crashed in 1929 and Safeway quit buying stores. He was stuck."
Lawrence himself has been a partner in his family's grocery business for 15 years. The family now owns 25 stores in small towns across West Texas including Abilene, Midland, Odessa, and Brownwood. In smaller towns, such as Clyde, Spur, and Winters, Lawrence Brothers Grocery is the only grocery store in town.
"We don't have deep pockets like HEB and Albertson's, so we have to carve out our own little niche," says Lawrence. "Their buying power is so much greater and their distribution costs are so much less, but the big guys don't take time to fill the niches, they want to take a broad brush to the business." The company employees, he says, are like an extension of his family, and that's something people won't find in the bigger groceries.
Lawrence wasn't the first in his family to go to college-his father claimed that honor-but his business degree did lend some sophistication to the grocery's operation. "We brought a budgeting process to our company," he says, refering to both he and his wife. "That enabled us to grow and tap into financial markets." After graduating from UT, Lawrence and his wife, Carolyn, BBA 80, worked for Texas Commerce Bank in Houston. But Lawrence says that he probably knew all along that he'd come back and join the family business. He knew he didn't want to raise his family in a big city. "But my father was adamant that his kids work for someone else, have a different boss, and work in a different environment before going to work for him."
Many kids from Sweetwater were going to college at A&M at the time. "I knew people whose parents wouldn't let them go to UT," says Lawrence. People in Sweetwater had the perception that Austin was a really liberal town because of all the hippie stuff going on in the '60s. Carolyn was the only person from her hometown of Cotulla who attended UT that year.
"I tend to be pretty conservative by nature," says Lawrence. "My Aggie friend across the street tells me, 'It's a good thing you went to UT because if you'd gone to A&M, you'd be so uptight we couldn't stand you.'" But somehow, his education at the liberal state university served him well because when he isn't running the grocery, Lawrence is running the town: he's the mayor.
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