Leading The Herd

Innovative Rancher Monty Richards Hands Over the Reins To The Next Generation

May, 2004

Monty Richards may have retired as president of the Big Island’s Kahua Ranch, but he certainly hasn’t been put out to pasture. The 75-year-old, fifth-generation kamaaina still wakes up before dawn to do paperwork, answer phone calls and sort through e-mail in his cramped but picturesque office. He usually won’t call it a day until after five. He also still makes weekly trips to Honolulu to attend meetings of the many boards that he sits on. Not much has changed since Richards officially handed over the reins to the ranch to eldest son, Tim, last February.

“I live in the same house and work in the same office,” says Richards. “It’s not quite what I anticipated retirement would be like. I’m also still chairman of the board of the trust that owns the ranch, which means I pull the window shades down, watch TV and keep on thinking.”

Kahua Ranch is located 3,200 feet up in the North Kohala mountains on the northern tip of the Big Island. Up close, the ranch looks like many family homesteads one might see across rural America: The wet winter has turned the surrounding pastures green and lush. The main house, nearly a 100 years old, sits at the front of a small compound of a dozen or so modest buildings.

However, standing on the ranch’s gravel driveway and looking down toward the ocean reveals a landscape uncommon in the American ranching universe: A large portion of Kahua’s 8,500 acres slowly emerges from a veil of clouds and fog and spreads out in all directions as far as the eye can see. Somewhere beyond the blur of faraway rock and grass lies the tranquil, deep, blue ocean. Dorothy, we’re not in Kansas anymore.

To the casual observer, it doesn’t look like much has changed at Kahua in the past 50 years. Although Kahua’s pastures may look as if they are frozen in time, the landscape of the farming business has been utterly transformed in the past five decades. Following World War II, ranching, as with all farming, has made the slow, but sure march toward consolidation and monoculture, larger and larger operations specializing in fewer and fewer crops.

“Ranching everywhere is a difficult profession. It always has been and always will be,” says Dr. Brent Buckley, beef cattle specialist at the University of Hawaii’s College of Tropical Agriculture and Human Resources. “Unlike farming, in which you plant a crop and harvest it several months later, in cattle ranching, production revolves around the gestation period of a calf. Therefore, from the time that a rancher decides to ramp up production to the time that he can bring a heifer to market, a good four or five years have gone by.”

According to Buckley, Richards has consistently been out in front of the herd in the cattle industry. In the mid ’60s, the rancher was the first in Hawaii to embrace artificial insemination, improving the genetics of his cattle. He was also an early adapter of intensive grazing, a method of subdividing a ranch and methodically moving cattle from one grid to the next. The technique has doubled the carrying capacity of Kahua’s acreage. In addition, Richards diversified his livestock by raising sheep. Today, his flock is one of the largest in the state.

Moreover, the rancher has taken a few unconventional attempts at diversification, building a hydroponic farm on the property and raising flowers, tomatoes and lettuce. He’s also experimented with solar energy and wind energy twice.

“I’ve known him for 20 years, and he’s always been a leader and a model for the industry,” says Buckley. “I actually think that farms like Kahua will be the only ones left in 20 years. They can diversify their operations a little bit and still maintain their cattle, which is their primary focus.”

Sitting in the big chair

Kahua Ranch was founded in 1928 by Ronald von Holt, an Oahu rancher, and Atherton Richards, a prominent Honolulu businessman. The pair pooled their money and bought massive property from Frank Woods, whose wife, Eva Parker, was a member of Big Island ranching royalty. Herbert Montegue “Monty” Richards Jr. was born shortly thereafter at nearby Kohala Hospital and spent the first two-and-a-half years of his life at Kahua before his father, who was the ranch’s bookkeeper, moved the family to Honolulu.

After the outbreak of World War II, the Richards family moved to Minneapolis, Minn., because the elder Richards wanted to get as far away from the ocean and the war as possible. Two years later, after the tide of the war in the Pacific turned, the Richards family returned to Honolulu, where Monty attended Punahou School. But after a year, school officials recommended that he pursue his academic career somewhere else, and he was sent to the exclusive prep school Choate Rosemary Hall in Wallingford, Conn.

“I did very poorly at Punahou. They could see right off that I wasn’t going anywhere fast,” says Richards. “Choate was a boys’ school, and they knew how boys were and they knew how to handle us. I was a late bloomer. Some people are still waiting for me to bloom.”

After graduation, Richards attended Wesleyan University in Middletown, Conn., for two years before transferring to Cal Poly San Luis Obispo, where he majored in agriculture. He returned to Hawaii after finishing up at Cal Poly and found a territory in transition, a place that was quickly opening up to the wider world.

“It was the early ’50s, and Honolulu businesses were paying more for people from the Mainland than they were for local people. I said, ‘The hell with that!’,” says Richards. “I wanted to be in agriculture, so I was planning to work for the British in Africa. I figured I’d strike out on my own, just like my family had done long ago.”

However, following the unexpected death of von Holt, Richards moved back to the Big Island to work on the ranch. Several years later, he took over as head. He was only 27 years old. But, Richards still answered to his uncle, a dynamic renaissance man who was a Castle & Cooke executive, Bishop Estate trustee and a high-ranking officer in the Office of Strategic Services (the predecessor of the Central Intelligence Agency) during World War II.

“People come up with great ideas of change, but then they sit down in the big chair, and they find that they have a lot more responsibilities than they thought,” says Richards. “My uncle was my boss, and I answered to his doing. This wasn’t a sleepy man. He taught me that if something comes up, move and take advantage of it. If it works, wonderful. If it doesn’t, be prepared to take the next brass ring.”

Cattle is still king

Today, Kahua Ranch is home to more than 3,000 head of cattle and nearly 2,000 sheep, and is staffed by 13 people plus a handful of additional contractors. The original ranch was split in the1980s between the Richards and von Holt families, creating the 11,000-acre Ponoholo Ranch. The families and their ranch operations remain closely connected.

At Kahua, the greenhouses are empty (the victims of globalization and a crowded marketplace) and the windmills stand idle (although photovoltaic solar panels provide about 90 percent of the ranch’s energy needs during daylight hours), but the Richards family continues to innovate: Later this year, the ranch will begin selling its Wagyu beef (better known as Kobe beef) to high-end restaurants in the Los Angeles area. Kahua started breeding the fabled Japanese cattle, renowned for its finely marbled flesh, more than a decade ago. On average, Wagyu commands prices four times higher than Kahua’s Angus cattle.

In addition, over the past five years, the ranch has made a concerted effort to develop an agritourism business, which features ATV rides, horseback riding, hiking and a larger group excursion called “An Evening at Kahua,” in which visitors experience the ranch as it ends its work day. The ranch averages 800 to 1,000 ATV rides and about 125 evening events a year, about half the capacity of the current staff and facilities. Tourist-related activities account for a little more than 5 percent of Kahua’s revenues, but younger brother John Richards, who runs the tourism businesses, will be ramping up operations this summer in anticipation of heavy business from the cruise ship industry. This anticipated growth in business couldn’t come at a better time. According to Monty, Kahua hasn’t turned a profit in the past five years, thanks to the drought.

“We’re kind of finding our way through this,” says John. “Although cattle ranching has a long history in the Islands, it isn’t something that’s familiar to most visitors. We’re very optimistic about growth in this, but, to be honest, I don’t see this making up more than 30 percent to 40 percent of our business. We aren’t going to destroy the place.”

New president Tim Richards, who is also a practicing veterinarian, will be taking a multifaceted approach to his cattle operations: Currently, the ranch is under a herd expansion, an attempt to recover a 25 percent population reduction suffered during the recent drought. In addition to building up its commercial herd, whose calves are sent to Mainland feed lots for finishing, Tim says that Kahua will also more than double its Hawaii grass-finished cattle for sale to local restaurants. Currently, 100 head are devoted to this market.

Tim also hopes to increase Kahua’s Wagyu herd, so that it will eventually make up 25 percent of the cattle sent to market. He’s also looking at a branded beef product that he can market directly to consumers, a project that is still in its infancy. Tim believes this diversification of products will help move more of Kahua’s beef out of the commodities market into more specialized niche markets, away from the huge price fluctuations that plague the industry. While this new business plan, which puts a heavy emphasis on the cattle-ranching operations, may seem like a step back into the future, Tim says that it is consistent with his father’s vision.

“We’re going to concentrate on what Kahua does best-raising cattle,” says Tim. “But we’re not going to close our minds to other opportunities out there. If wind power becomes feasible one day, then you’ll see Kahua windmills turning again.’

Back at his office, Monty contemplates Kahua’s future, which looks very bright in the short term, thanks to heavy, steady rain. However, 50 years from now, he’s not sure what the ranch will look like. He even doubts that cattle will be a part of this faraway vision.

“I keep giving Tim one piece of advice: ‘What is your most valuable asset at Kahua?’ It ain’t the cow,” says Monty. “It’s land, land, land. This isn’t Western Kansas, where land is a dollar an acre. This is Hawaii. Sure, you can sell it one time and have one helluva subdivision. But what do we need in this state? And what will make money and still leave you in control?”

“What’s the answer? I don’t know,” continues Monty. “If I knew it, I would have told him long ago. I do know that you’ve got to keep on working, keep on trying new things and moving on.”

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