The End of the Road for the Ranch? - Vivek Kaul's Diary
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The End of the Road for the Ranch?

Apr 30, 2016

27

GUALFIN, Argentina - 'You want to be able to keep the ranch going? Keep the employees on the job.

'With a place like this, the only way to do it may be tourism. It's very picturesque. It may the only thing that really works.'

Speaking was a young woman who works in the hospitality industry. Sent by a friend, she wanted to come to the ranch to see if it would interest tourists. A smart woman, she saw the situation clearly:

'You're too high, too dry, too far from everything...and pardon me for saying so...but this place may only be of interest to tourists. For them, it's wonderful.

'You've got miles and miles of mountains, gauchos, valleys, Indian ruins, vineyards, rivers, cattle, sheep, guanaco, goats, llama...picturesque homesteads...great people (we had not mentioned our war with the originarios, the natives claiming land rights).

'It may be hard on the cattle here, but sophisticated travellers will love it.'

Growing Losses

When we first saw the ranch - about eleven years ago - we were touring with a group of investors.

We judged it a bad investment. Nothing that has happened since has proved us wrong. It's been ten years since we bought it; we've lost money every year.

What worries us is that even after substantial investment in equipment and facilities, the losses are getting larger.

'Don't worry about it,' said Elizabeth, graciously. 'You don't spend money on anything else. You don't have a boat or a plane. You don't even own a car. This is your hobby. Enjoy it.'

But the air gets a little thinner each year. The mountains get a little steeper. And the saddles are a little farther from the ground. After each fall, it takes a little more to recover.

The time will come when we are too old to enjoy it. Then, what will happen? We will pass it on to our children. But they may be less able or less willing to support such an extravagant hobby farm.

'We would much rather put it on a breakeven basis...so at least they are under no pressure to do anything with it.

'Tourism can work here; I'm almost sure of it,' was our visitor's judgment.

Left for Dead

She came after another day of the roundup.

This time, the gauchos swept the campo adentro, the inside field, bringing about 300 more cows, bulls, and calves into the corral.

We worked all afternoon, running them through the manga (the long funnel, built of high stone walls where the cattle are compressed into a single file)...locking them in the chute...vaccinating them...cutting off tails...and other things.

It was hard work. But she was right; it was picturesque.

'Quick, open the gate!' Jorge yelled. 'A calf is getting crushed.'

We rushed back to our post. We had been helping to put the yellow plastic in the calves' noses (to prevent them from sucking at their mothers' teats). We held onto their ears, trying to hold their heads in place, while Gustavo put in the dreaded plastic.

We opened the gate as fast we could. But the cows had gotten themselves locked in place, crowding against each other so tightly that none could move.

The gauchos knew what to do. Jose jumped into the manga and pulled on one of the cow's tails. Gustavo pulled at another's head. Samuel raced over with the electric cattle prod to try to untangle them.

After a few minutes, the animal logjam was broken up...the cows ran off through the chute. And when the dust had cleared, we saw one calf, lying on its back...apparently dead.

Gustavo ran over to it. Within a few seconds, the calf surprised us. Its limp body suddenly sprang to life. The calf jumped to its feet...and ran to join the rest of the herd.

Charmed Life

The cowboys here are not at all sentimental about cows. But each one will sell for the 29 pesos a pound - about $2. Our average animal gets to about 120 pounds by the time we sell it.

You can see the problem as well as we can. If we sell 300 animals a year (our fertility rate is very low...thanks to drought, cold, condors, and pumas), that gives us total income of only $72,000.

Even down here, that's not enough to pay the salaries of our five cowboys.

After a charmed life in the financial publishing world, our life here shows us something important: If you want to make money, it helps to be in the right place at the right time.

The financial industry in the US - of which we are a small part - has been good to us.

Ranching is another thing...

'What people want today is experience,' continued our travel expert.

'Authentic experiences. I'm talking about wealthy people. They've been to Paris and Rome. They can go wherever they want. They have a lot of money and not much time. You have to give them a real, unique experience. And that is something we can do here.

'And don't worry, I'm not talking about mass tourism. That ruins a place in my opinion. I'm talking about bringing a very few, select groups here...more like friends of the family than customers...and giving them the experience of an authentic, traditional ranch in Northwest Argentina. It won't be cheap, but they will love it.'

'You mean we can sell expensive travel packages to hedge fund managers and Washington lobbyists? 'Keep talking,' we replied.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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