It’s cowboy code never to shoot first or take unfair advantage, but when a fifth-generation cattle rancher and his programmer friend saddle up, cowboys and code can solve problems bigger than the West Texas sky on a clear summer day.
Cattle ranching in the United States goes back hundreds of years, but the methods for buying and selling cows are nearly as old – and inefficient – as ever. That’s about to change all along the trail of beef production thanks to a platform named AgEx.
AgEx is a new kind of cattle marketplace, a virtual auction barn that reduces common inadequacies of marketing cattle and creates a permanent database for better herd and ranch management. Released in January after a year of testing, AgEx already has thousands of cattle registered and dozens of users across Texas and Mexico.
The cowman behind AgEx is Wendel Thuss of San Antonio.
Advised against a career in ranching during a downturn in the early 2000s, Thuss was working for a produce company in Mexico after college and law school when, at age 28, he unexpectedly inherited a 4,200-acre cattle ranch, El Capote. Faced with managing a 350-cow herd, he soon encountered the frustrations of the auction barn experience.
“The auction is really hard on cattle because of the stress of a new environment and there’s little food and water,” he said. “Second, there is disease communication. And auction fees are high. I don’t know of any producer who likes it. You feel [like] you don’t have much leverage in that negotiation.”
The alternative, a private contract buyer, isn’t much better.
“You’re effectively negotiating the price of your cattle when they are on someone else’s trailer off your ranch,” Thuss explained. “It’s frustrating.”
To better price animals and improve the transaction between the producer and the middle market, Thuss needed a way to gather and store historical data on each cow, such as weight and vaccination schedule. The solution came to him one day after noticing a cowboy working cattle and listening to music on his smartphone – and so AgEx was born.
Using a retrofitted, “smart” squeeze chute and a cell phone, an AgEx cowboy, or “affiliate,” travels to the ranch, weighs and tags each cow with a QR code, and creates a database that contains all the information a buyer would want on a cow, including the price. It’s like a permanent record for cows.
“An animal is not unlike a racehorse in that what you do with it tomorrow is largely about what happened yesterday,” Thuss said. “Being able to attach information to that animal allows us to pass that information on and make better decisions about its future, what you’re going to do with it, and how to handle it.”
AgEx charges ranchers a 2.5% sales commission, with 1% going to the affiliate and 1.5% to AgEx. There are five affiliates currently on this payroll. But as more affiliates sign on, AgEx plans to continue expanding its market, one county at a time, far beyond the Texas borders.
At its offices in Austin, the team now numbers 11 – software engineers, sales associates, and the executive group made up of Thuss, his law school best friend and Chief Technology Officer Jared Wright, as well as Chief Product Officer Robb Van Eman, a technology expert, and Logistics Vice President Blake Adams, who grew up working cattle.
Like a scene from the 1991 movie “City Slickers,” they often take their software engineers out to work on Thuss’ cattle ranch near Seguin which has become a sort of lab for the company.
“To say it’s a meeting of two different cultures would be an understatement,” Thuss said. “They try to make us break the technology and participate in the development. It opens your mind to what the other guys are doing and incorporates into your problem-solving outlook.”
Thuss raised $1 million to get AgEx off the ground, most of which came from third-party investors.
“I won’t say it’s been easy or hard,” Thuss said. “I think the story and value proposition just resonated. I hate the auction, my granddad and great-granddad hated the auction. If you ask ranchers, 99% will say the same thing. That is universal, and that is the market we’re trying to alleviate.”
And yet he doesn’t think the auction barn is going away any time soon.
“They will have to come up with some data solutions instead of trading blindly with very little record because we are going to move the bar in terms of what’s expected with cattle information,” Thuss said. “And we hope to provide a product to meet those needs in the not-too-distant future.”
Last week, Thuss was in Amarillo – a place most livestock passes through at some point, he said – talking with feed lot and stock operators about the next evolution of AgEx products. His team is developing a herd management application which will allow producers to start tagging early in the animal’s life cycle and record treatments through their phone with a simple scan and press of a button.
“It does sound relatively simple, but actually making it completely mobile is fairly complicated from a technical perspective,” Thuss said. Also, timing is everything.
“When we look at all the people who have tried to build variations of this, they were never able to make it all work,” he added. “It’s just in the last few years that all the pieces have come together – between everybody having a computer in their pocket and wireless connectivity coming into its own – that allows it to be user-friendly for everybody. That’s been a big step forward.”
Because his best friend from law school, Jared Wright, quit his practice and “randomly started coding” a few years ago, AgEx has access not only to the technology, but also to the minds behind it.
“I marvel every day at the serendipitous occasion that had me getting together with guys in the engineering room and what that’s allowed to happen in this space for us,” Thuss said.
“It’s amazing, all the technologies that are out there, that we all use in our day-to-day lives now, until you get to the ranch or the farm. And getting these guys we affectionately refer to as nerds – they work magic. What they are capable of doing is just mind-boggling. It really is the greatest treat of this job.”