AoR 189: "Sailing true" on waves of grass with Pono VonHolt on Hawai'i

Tip Hudson: Welcome to the Art of Range, a podcast focused on rangelands and the people who manage them. I’m your host, Tip Hudson, range and livestock specialist with Washington State University Extension. The goal of this podcast is education and conservation through conversation. Find us online at artofrange.com. Welcome back to the Art of Range. My guest today is Pono Von Holt with the Ponoholo Ranch on the northwestern corner of the Big Island of Hawaii. Pono Von Holt, welcome.

Pono Von Holt: Thank you. Glad to be here.

Tip Hudson: It is a pleasure to be here with you talking in person. I’ve seen maybe some of your cattle, I don’t know, but a lot of weaning calves in the Ellensburg area over the last 25 years that I’ve lived in Ellensburg. So it’s fun to see where they come from and learn a little bit more about what it looks like to raise cattle on Hawaii.

Pono Von Holt: Right. We ship cattle. Ellensburg is one of our destination unloading areas with Don Mays’ family. Our cattle go basically in the summertime up through Seattle-Tacoma Port and end up being unloaded in Ellensburg. Our cattle in the wintertime generally go through California and either stay in California to come north in the summer or they’ll go straight into the Plains area in the Amarillo, Texas area.

Tip Hudson: Where does the name Ponoholo come from? I don’t speak Hawaiian, so for all I know, it could be chicken ranch.

Pono Von Holt: Originally, Ponoholo itself is a Hawaiianization of Von Holt, which is the last name. My grandfather spoke Hawaiian pretty well and ran operations for the Campbell Estate on Oahu back in the turn of the 19th century, 20th century, excuse me. They called him Hale Ponoholo, which means Harry Von Holt. We built a ranch in 1978 when we took full control of it on the property here, we changed we used that name, Ponoholo, as the name. Unbeknownst to me, at that point, I wasn’t completely fluent in the Hawaiian language. It was just starting out. Now there’s a lot of people speaking the language again. But the navigation, which has been one of the impetus that brought the Hawaiian language and culture back, and they’ve shown how the Hawaiians and the Polynesians navigated the Pacific off the stars and currents and wave action. No sextant, no compass. When you got on the right path, it was pono holo. Pono holo itself means the good way.

Tip Hudson: Yeah. Wow.

Pono Von Holt: If you took the dividing up. I thought that was appropriate, cause I think we’ve been doing things pretty good, in our last 40 years here.

Tip Hudson: That was serendipitous that that became the name of the ranch. Before we get further into the ranch, I’m curious about the term paniolo. You see that that seems to almost define, you know, at least some of the historical culture on this part of the Big Island. Where does that term come from? People heard that term, and we associate it with Hawaiian ranching culture, but I don’t know the origins of it.

Pono Von Holt: Cattle came to Hawaii in 1793; in 1803 horses came. By the 1820s, they had a we call kapu, which would be a taboo. You couldn’t touch them. They just procreated all over the islands.

Tip Hudson: Those were a gift to the king?

Pono Von Holt: The original cattle were a gift to Kamehameha. They were Kamehameha the Great’s, back in 1793. By that time, they were looking for foreign trade, and the only way they could trade was hides, tallow to China. Any meat they could brine, cure and smoke, which we call pipi kaula, to trade with the ships. How would they do that? Well, they went out and they shot these things. Well, shooting is very inefficient. They heard about the vaquero in California and Mexico herding cattle. In the 1830s, the vaquero came to Hawaii, taught the Hawaiians how to work cattle, build equipment, saddle, we call the noho lio, which looks very much like a Mexican saddle with a lot of rawhide on it, and taught them how to rope and everything else and herd and manage the cattle. All of a sudden, ranches started out. At the same time, Honolulu had progressed to a point where it was at the center of the monarchy, and there was trade going on there, a lot of business. Sugar was coming in and everything else. We were able to take cattle down there and had value to them where they were actually processed in a slaughter facility back starting in the 1840s. The vaquero spoke Spanish. It was a language that the Hawaiians didn’t use a lot. They had English, and they had Hawaiian. Spanish was called Espanol. When these Spanish speaking guys came in, their Hawaiianization of Espanol was paniolo. Guys that knew how to work cattle and obviously could take directions in Spanish. Espanol, they were called paniolo.

Tip Hudson: That’s interesting. I’ve never heard this story before. Well, we’re on the you live in the ranch is on the side of this Kohala Mountain. Is that how you pronounce it?

Pono Von Holt: Yes. Kohala.

Tip Hudson: Yep. Just describe where that’s at geographically. The people listening are from all over the world in Western United.

Pono Von Holt: The Island of Hawaii, which is the biggest island in the state, has a north end to it. We’re on the north end. It’s basically the Kohala Mountain. It’s one of four mountains on the island. We have the active one active volcano is called Mauna Loa, almost 14,000 feet. One is 200 feet higher is Mauna Kea, which is very dormant.

Tip Hudson: That’s the one with the observatories on it.

Pono Von Holt: On the observatories. Then the one over Kona is called Hualalai. This one is called Kohala. Yeah. Kohala is the oldest part of the island. The soils are the most part of soils are one of the most developed parts of the island. Mauna Kea and Mauna Loa have developed soils on parts of the land, but a lot of their land is still in lava. Hualalai is the same thing. Still a lot of lava. We don’t have a lot of lava here except at the ocean.

Tip Hudson: The contrast is stark. Down at the I drove up from Waikoloa the down there, there’s nothing but bare rock, except where something’s been planted or where there are a little bit of fines collect in the dirt and it grows some tussock grass. But here, it looks like there’s a lot of soil, and of course, there’s more rainfall with the elevation. Describe the plant community that the ranch is working.

Pono Von Holt: We work from about 4,600 feet elevation, all the way down to sea level. Our high country is our wet country. It’s in tropical forest. We collect water from there and then distribute it down in our pasture land. That forest area is mainly state owned. Our property consists of maybe 400 acres up there, but it’s all managed watershed together. We have these watershed partnerships with public and private lands to manage the watershed. Collect the water, put it in reservoirs. Our biggest reservoir is 10 million gallons. We have two 5 million gallon reservoirs in addition. Then we have smaller storage areas going down the mountain ending up at 2,000 gallon little tanks at the bottom. The bottom is very dry. 10 inches of rain a year. Top is 110. That gives you a grass country in the middle, which is mainly made up of Kikuyu grass, which is an African forage. Brought here in the 30s, grows really well. Carries a lot of cattle. You can keep control of the ground without exposing it, managed properly. It’s adding, build soil.

Tip Hudson: What’s the history of this ranch?

Pono Von Holt: This ranch was undeveloped property in 1928. That my dad and his partner, Atherton Richards, were able to purchase the area, a couple pieces, a headquarters area that was under separate ownership. Then a couple ahupuaa that went back to the granddaughter of Kamehameha the Great and put the ranch together called Kahua Ranch. 1928, 1978, we split the property between the two families and Ponoholo Ranch started in 1980.

Tip Hudson: I read somewhere. It might have been the Paniolo Hall of Fame website, that the ranch had at one point raised cavalry horses for both World War I and World War II.

Pono Von Holt: Yes, part of the business. Parker Ranch did a lot of it, too. My dad had experienced it on Oahu because that’s where the military was centralized around the Pearl Harbor bases of raising horses for the cavalry and dragging your cannons around. When he moved up here, his contacts, so he started raising them, too. Obviously, in World War II, we provided horses. They were still the First Cavalry Division of the Pacific. It was still active in the Philippines. Everything there was drawn by horses and mules.

Tip Hudson: Wow.

Pono Von Holt: As we got back into the Philippines, there’s a requirement for those animals again. Eventually, it was only a few years, but we had contracts to raise horses and mules for the military. That was part of our business. Not a big, not the main part, but it was a nice revenue part because it was a defense contract basis.

Tip Hudson: You said you feel like the ranch is running true, is on a good path right now. Your dad died when you were quite young. Did you, at what point did you take over, and what did you change directions? If so, what did it look like before and what changed?

Pono Von Holt: When I came, when I came, when I grew up, the ranch was basically a large business that supported people with, we had our own dairy herd. We produced our own beef. We had a garden area that was, I made the people to do that, produce our own food and provided a beef product to the community of Kohala. The community was made up of these large sugar plantations, would employ thousands of people. There was a natural market. At the same time, the ranch had no fence on it in 1928, so there was a capitalization process that went through, made it through the Depression and capitalized in the fencing and controlling animals in pastures rather than having to run in huge areas. We still had pastures that were 3,000 or 4,000 acres. They were still relatively big. I came back into that a deal back when I came out of college in 1972-1973 and started working for the ranch under the leadership of Monty Richards of the Richards family. We got along very well together. They offered me the job. I came on as a paniolo and took over some of their dairy replacement. We were running dairy replacements for the Oahu dairies. We shut the slaughterhouse down at the ranch. We shut down the dairy at the ranch by then. We had a community where you could buy the stuff at the store. That was a lot more efficient for us at that point to concentrate a little bit more on just the cattle deal. But like all our agricultural businesses in Hawaii, we were all having financial issues. Cattle weren’t worth enough. Sugar wasn’t worth enough. Our costs were being driven up by different labor costs and the fact that we were isolated and we were very relatively small volume. Our businesses are small, so we had to team up with sugar companies in California to properly market and process sugar. Cattle, we did it ourselves because we were still able to do it, but we weren’t very efficient. Our biggest kill slaughterhouse was maybe 100 a day. We had feed yards here and all that stuff that we’re trying to do. We weren’t competitive in feeding. We weren’t competitive in processing and marketing because of economies of scale. Feeding had the extra thing. We had to add 130 or 140 bucks a ton to get feed out here to feed an animal. At some point, right there around the early 80s, we got hold of technology developed by Allan Savory. Stan Parsons took a holistic approach to managing ranches with intensive grazing philosophy to duplicate the wild herds in Africa. We took that, tried it out in our best country, in our worst country. Best country, we had a 6 month payback on the investment; the poorest country it took 5 to 7 years. We can see so in our tough country, it took us a while.

Pono Von Holt: We went from one animal to 30-odd acres to one animal to 12, and our upper country went animal to an animal unit being a 1,000 pound unit from our best country with fertilizer, and everything else did about a half and went to without fertilizer, without any other inputs, but with intensive grazing, we developed country that would sustain 1,000 pound animal per acre. Then we had the same problem. We let our costs rise to our level of income. We had to do the next phase, which was take control of our cost of production. In the process of taking the cost of production, we examined the marketing, and we saw that our comparative advantage was the cow-calf side. We don’t have any farming equipment. We don’t feed hay. We can grow grass year round when it rains. We could get a calf to the mainland under what a calf was worth, even with the high shipping costs. To get a calf to the mainland was what it costs us to get a ton of feed here. So we could ship 400 pounds of body weight to the mainland and it was less expensive than bringing 2,000 pounds of feed in. We decided, okay, that’s what they’re writing on the wall. We shut down most of the two big packing plants or three big packing plants in the state shut down over the course of 10 years. The smaller ones stayed alive, taking care of our cull cows and bulls primarily, and then providing an avenue for some grass finishing cattle, which is always a challenge to finish efficiently and be competitive with what a calf value is and a cow, the cow production you give up when you try to finish animals. That was the other thing we moved, looking at the whole system, realizing that we get to the mainland with a competitive calf, the genetics, we knew the genetics because we’re doing our own genetic work. We were marketing our own cattle. We knew that choice beef brought more than select beef. It was good beef in those days and prime if you got it, which is hard to do prime in the tropics, but when you got there, it was even better. We knew that retaining ownership was an advantage for us. We retain ownership on our calves. We don’t sell anything live unless we partner on them, and for cash flow issues or just to get access to grass or feeding. We’ll partner some of our calves. We get all the information back. That plows back into our genetic program, which is started out with AI breeding from working with CSU back in 1968. Today, it’s with the DNA markers and everything else. You know, we pull a hair sample on a calf at what we call a branding time and at that time we know the genetic capability of that calf is, and we can make our selection on our bull battery.

Tip Hudson: I want to come back around to grazing management, but I want to take a quick diversion. You talk about getting cattle to the mainland. I know this is old hat for you, but how do you get cattle from Hawaii to the mainland of the US?

Pono Von Holt: Originally, it was we had roll-on, roll-off ships, container ships. We just took a pot belly trailer, put feeders in it, fixed up some of the different pans and made them somewhat similar. We’d roll them on and roll them off a ship, and they came into the port in Hilo. The shipping company, and then also, we had enough cattle here with Parker Ranch, we brought a foreign livestock ship in because there was no livestock ships in the US fleet. We brought a foreign livestock ship in, but in order to go to the mainland, we had to go through Canada. We couldn’t land at a US port. We tried that a little bit. That worked well, but you had to put together 1 million pounds at a time to do it, which was always a challenge getting enough ranchers together. Meanwhile, the container shipping company went to entirely lift-on, lift-off container, so we developed these 40 foot high cube containers. High cube means it’s 9 foot 6 and not 8 foot 9 high. We can put a second deck in there. It’ll fit a calf up to about 600 pounds. We put them in there with feed and water. There’s a big feeder in the middle of each. Each deck in the middle of two pens has a feeder. They can eat off both sides. They have a water system right in the middle, too. They’re under care for basically, it takes seven days by the time we load them and unload them. So stock tenders go with them. The stock tender will handle up to maybe 350 to 400 head, maybe 8 containers.

Tip Hudson: Wow.

Pono Von Holt: It’s a process, but it’s efficient for us, and it allows us to take advantage of lower cost feeding on the mainland, extremely efficient process in these big packing plants, and then marketing on a consistent basis with the consumer. You need volume, and it gives us the volume to get into programs like Country Natural Beef. We can deal with Certified Angus Beef premiums on our black hided cattle. We have all those opportunities, and so when I take the holistic approach, that’s it. I mean, you got to look at the whole thing. Then you’ve got to look at your management, especially back home and how it fits.

Tip Hudson: So you’re exclusively a cow-calf operation in Hawaii. In Hawaii.

Pono Von Holt: Yeah.

Tip Hudson: At what age do you wean the calves and ship them off?

Pono Von Holt: Six to 7 months.

Tip Hudson: Yeah.

Pono Von Holt: We try to ship a 400 pound calf.

Tip Hudson: 400 pound.

Pono Von Holt: 400 to 450; 450 pound calf is our ideal calf. We ship them anywhere 350-550. The reason this is that is that when you ship them at that age, it gives us a lot of flexibility on the mainland. They’re old enough to do anything. They can go into the feed yard, they can go to grass, they can do whatever. We can take care of all the, take a look at the opportunity and different programs we have. It’s lower cost in the winter to just go right to feed, we do that. If we got some weak ground we can get down to, we do that. If we can winter in California, and that makes sense because we can summer then in the Northwest, we’ll do some of that. Or we’ll go right in the Northwest and go into a residual feed program in mid to late summer and then go in the feed yards after that.

Tip Hudson: You said you’ve got two different breeding groups that are calving at different times of the year. Describe what those two different groups are and why, and I presume then you’re shipping calves twice a year or more often than that.

Pono Von Holt: Yes. You generally ship twice a year. We did that primarily from an ecological, environmental standpoint. Our environments here are extreme. We have not extreme. They’re good. But we have two or maybe three, possibly four micro systems on the ranch. In order to make the dry country fit we need to have a wet season, and the wet season comes when it’s wet. In our wet country, when it’s wet, it’s not good. It gets muddy, it gets it’s dark in the wintertime and grass doesn’t grow as strong. We realized that our higher production country, which was wetter, is better advantaged to a spring calving season. Our lower country is better advantaged to a fall calving season, so we fall calve in November, we spring calve in April. We’re not, we’re a little bit early, a little bit late in the fall, and we’re right in the middle of the spring. That allows us just put our bull herd, bulls get to work twice a year so we can be more efficient there. It allows us to distribute our labor so not having to do everything at once for the whole ranch. We have two different branding seasons. We have two different weaning seasons, two different. The branding, the weaning and shipping, they go in sequence, and then we do it again with another group and we’ll intermingle a little bit with the branding and shipping in the summer. We’ll have a little bit of overlap.

Tip Hudson: The way you’ve spoken of Kohala Mountain, it sounds like it has more identity or more significance than just the name of a landmark or there’s a place there that’s almost like a capital P place. Can you describe that?

Pono Von Holt: You’re talking about the name Kohala?

Tip Hudson: Well, just the way the mountain defines the production cycles and the environments. You’ve got multiple ranches that are coordinating to try to manage watersheds on the mountain. It’s a bigger, there’s a bigger, more holistic picture, I guess, there, then. If I say somebody ranches on Whiskey **** Mountain, it just means that they’ve got a grazing lease up there. But this is something bigger than that.

Pono Von Holt: Well, the word Kohala, if you split it up, ko refers to sugar and sugarcane. Hawaii’s had sugarcane a long time. Hundreds of. Hala is a pandanus type tree that grows in the lower country, pretty thick along the shoreline, especially when you have some moisture. Our northeastern side of the island is very wet and our southwestern is very dry. The Kohala area got its name where people lived where there was moisture and they had these big valleys that they could collect water and they would grow kalo, or taro, and that was the main staple. Eventually, in the mid 1200s, 1300s, they brought the sweet potato in. Somebody sailed over to Mexico somewhere and got sweet potatoes, came back. They started growing uala, being a root crop. It grew in this drier, ’cause it says root crops not exposed to air. They used the ko to shade them out and collect the moisture, cause we have a lot of wind. They developed the sweet potato. And from that, you know, the sweet potato and the taro, they grew a very strong population. Kamehameha the Great was from Kohala. Eventually, when the Europeans discovered Hawaii, and the Hawaiians discovered the European weapons, Kamehameha took that into consideration and then united all the islands together. It was all very tribal before that.

Tip Hudson: That’s what he’s known for?

Pono Von Holt: Yeah.

Tip Hudson: Primarily.

Pono Von Holt: Yeah.

Tip Hudson: Wow.

Pono Von Holt: Kohala was his home country.

Tip Hudson: Yeah.

Pono Von Holt: When sugar came in, there were several large plantations in the Kohala area, higher rainfall areas. In the 1914 to 1916, they developed a water system taking water out of the valleys on about a 50 mile water system in the ditch tunnels. They had all the gold digging guys on the mainland that had the technology, engineering to engineer these tunnels. They brought foreign labor in mainly from Japan. In two years, they put these irrigation, put these collection systems in. They could do 30 or 40 million gallons a day so they could irrigate some of the drier land. The sugar plantations were a big deal in Hawaii all the way till 1975. 1975, they weren’t competitive. It went out of business. So all of that ground, some of it went in the grass, a lot of it’s gotten developed, been taken from 30,000 acres of plantation ground into 100, 200 acre blocks and maybe some thousand acre blocks here and there. Small blocks. Different ownerships.

Tip Hudson: I mean, you can tell from looking out here, this is productive ground. It grows a lot of grass.

Pono Von Holt: Right.

Tip Hudson: How do you manage that much grass? You alluded to using some pretty intensive methods. What does that look like?

Pono Von Holt: We use intensive grazing or planned grazing, intensive, whatever you want to call it. We use that as a way to utilize our grass very efficiently by first thing stopping overgrazing, so we optimize the growth of the grass when it’s resting. Secondly, to get the animal impact on it, which is, you know, the manuring, the fertilizing, and the rest and stopping the overgrazing. We fenced this property off in the mid 80s using electric fence, adopted some of the concepts of the holistic approach that Allan Savory was talking about. He was a great help to us getting started. We fenced the whole place off, doubled our production on the ranch, and we are where we are today. It took us another few years to figure out how to be profitable. It’s a combination of changing our marketing approach, as well as changing our approach to how we produced the grass and the costs involved in that. We’ve obtained pretty strong profitability starting in the 90s. Today, it’s been a good business. Obviously, the consumer demand switched over around the turn of the century of 2000, from bringing in brand programs and product differentiation to give us some flexibility of not being 100% commodity driven. It’s helped get the quality up there, demand’s increased as we all see. Everybody’s reaping those benefits today.

Tip Hudson: Yeah. As you’re likely aware, some of the critics of grazing management developed after Allan Savory’s ideas would say that that only works here because the grass never stops growing. I’m curious what did the grazing management look like and what did the plant community look like before you changed? You said that that allowed you to stop overgrazing. What did the grazing pattern look like across space and time before you were trying to control that? Then, the follow up question is, was that increase in your overall annual stocking rate a result of just increasing the efficiency of harvest? Because I can imagine that being the case, or was it also an increase in per acre production as a result of the manuring and efficiency and allowing soil growth.

Pono Von Holt: First of all, it is increasing the forage production on an animal basis. The easiest part was the good land. The lands of 15 inch rainfall to 70, and it’s immediate because the moment you stop overgrazing and you give cattle fresh grass every day or every other day, they’re eating a high-quality food every day.

Tip Hudson: Right.

Pono Von Holt: When you had them in a two- or three-paddock rotation, the first two weeks, they’d have something good. Then they start overgrazing, and you had rank feed and overgrazed grass. The overgrazed grass kept getting overgrazed cause the moist thing was regrowth. The root structure got lower, so you couldn’t carry as many cattle. We fertilized like crazy. Didn’t do any good if it didn’t rain. We couldn’t predict the rainfall. That was hard to increase stock over the whole ranch. We could always increase production with fertilizer, but we couldn’t increase consistently stocking rate over the year.

Tip Hudson: Right.

Pono Von Holt: Then in our dry country, in the mid country before it got too dry down in the 25-inch, 30-inch rainfall area, we had a lot of brush. By bringing these cow herds together, putting in herds of 400-600 cows in a herd. After we wean the calf off, you get the dry cow; she can do what we call cow dozing. The leftover grass is growing up in the weeds and the brush, and because it’s dry at that time of year, we don’t overgraze by keeping cattle longer because the grass is not growing. They go in and pull all up to get the grass; they trample the weeds. They trample the brush. The moment it rained, we’d speed the rotation up, stop the overgrazing, and the grass would compete with the brush. Over about 20-30 years of that, what we call cow dozing, we’ve removed our brush from that country. Before that, we were chain dragging and running caterpillars with big chains, and it looked great for a year or two. Then it went back to the brush country again. With the cow was eating, changed that. And our lower country, which is your Ellensburg-type country, 10 inches or less. We found that we couldn’t maintain electric fencing very well because it was so dry; it couldn’t get a good ground. Running ground wires didn’t work for us. We ended up taking 3,000 acres and making four blocks, putting in about six water points in each block. Then we put the cattle in that block, and we’d turn water on where they started and leave water off where we didn’t want them to go. As they graze that area down around the bottom of the water, then we’d turn all the water down below them. We got them to move relatively well. In that country, because their growing periods are so short, we have a lot of time where the rest period could be longer and not hurt the grass. We’ve been able to increase the amount of grass and increase the stocking, especially in the summertime when it’s dry, the cows are dry. Their cow dozing things to take care of the fuel load, so we don’t burn it anymore. We increased production by not burning our grass. We never wanted to burn our grass, but we had public highways, and that’s where they started. Now we control fire real well. Fire gets into our pasture; we can usually get a circle around it with a caterpillar real quick and out within hours. That’s giving us a big boost in production. We don’t have to carry a lot of grass, thinking we’re going to have to give up some if it burns. It works in the good country and the bad country; paybacks are a little slower. But there are still good paybacks, good investment that’s 5-7 years; that’s a good investment. It’s a no-brainer in the good country. I should say wet country. But wet and soil, rock and dry, two things we deal with.

Tip Hudson: To what extent are you coordinating with other ranches to manage the watershed toward the top of the mountain? You mentioned that you use the top of the mountain for water collection. What would a plant community or management that’s not good for water collection look like? Then what specifically are you doing to try to improve water retention, water collection, etc?

Pono Von Holt: The water collection area of the mountain is in excess of 100 inches of rain a year. That’s good. Less than that, you can have it, but it’s more sporadic. You can get more sustainable year-round collection in your higher rainfall areas. The typical tropical rainforest for Hawaii: ohia tree, lapalapa, bunch of other varieties. At one time, the cattle roamed into the country on the fringes of it. What we did to stop that, we drew a line at about 95 inch of rainfall and said, no more cattle above that. That’s this ranch. Other ranches have done something similar. They’ve had forest lines that were dictated by the fencing that went on during the CCC programs of the Depression years, and a lot of those lands are state-owned, and the state wants to control invasive species. We allow them to go in there and do fencing on our property to do that, to control. The big invasive species is feral animals, basically the wild hog, and then other types of plant communities. We cooperate with them, giving them access because we have better access into the country than they do. They get their access through us. We get the cooperation, and we work well together. They’re getting their environmental issues straightened out. Main thing is, keep that forest for watershed. From the community standpoint, it’s not only an economic value, but the community can’t survive without water. That works well. Obviously, now with drilling, people get groundwater, but you still got to go down thousands of feet; groundwater is very expensive. You can’t know, so whatever you can do with surface water, we do, and we manage the forest for that. From our perspective, from the state’s perspective, they have a little more of an environmental bent on that. But we support it.

Tip Hudson: Most ranches are looking for ways to diversify income. In what ways, or have you found other ways to generate some income aside from selling calves here?

Pono Von Holt: We’ve tried every diversification in the world [LAUGHTER]. All the plantations did, whether it was going from cane to mac nuts to coffee, to, you know what? There’s still some going on. But we never had that country here that would do that. It’s grass country. It’s good grass country. In the 80s, I made the decision. I said, we’re not going to diversify anymore. We tried it all, greenhouses and all that stuff. But we had all the same problems in Hawaii. You don’t have the volume. You don’t have the economies of scale in Hawaii because we’re a small state. Then you have all the higher costs of getting into here and labor costs, and everything go with it. I thought, this is concentrated, and we do well. That’s cattle. We concentrated just on, and we knew just didn’t just do cattle by themselves. The whole cattle thing, we said, cow-calf. That’s our strength. We feel that we’re competitive worldwide with anybody on cost of producing a calf. We get calves to the mainland as inexpensively as anything. That’s what we do well. That’s our concentration. When we diversify, we pretty much will diversify out of the state of Hawaii because everything we want to diversify into, and if we use our land base, it’s got the same issue. I haven’t found anything on this land base that’s as good as grass. We go to the mainland. We’ve invested in some commercial property, gotten in and out of that. We’ve diversified. We’ve gotten diversified into feeding operations, gotten into some bad ones, but we’re in some really good ones now.

Tip Hudson: Is tourism worth anything, or is that more trouble than it’s worth?

Pono Von Holt: What tourism does is it deflects your concentration, increases your cost to carry it. The only thing we’ve done with tourism is that we have this interest in horseback riding. We give a company the right to ride on the ranch, but they do the whole business themselves. We have nothing to do with it. It’s called Paniolo Adventures. You can look it up. Beautiful riding. Nice range you ride in. We don’t do it. We take a rental check every month.

Tip Hudson: Last question. What is the future of this ranch?

Pono Von Holt: I think the future of this ranch is good. We’ve instilled the reality of profitability back in our business and our industry. I’m fortunate to have one of my kids that’s real interested. One of my daughters, Serena, and her husband, Chris English, excellent managers. They’ve grown up on the property. They’ve grown up in the state. They understand the business, the history. They’re going forward with it now, succession planning-wise. We’ve lumped our stuff into these dynasty trusts, so we go on for 13 generations without any tax consequences. Property tax.

Tip Hudson: Estate tax.

Pono Von Holt: Estate tax. We’re trying to take care of the financial side to extend it and then just pretty much try to keep growing our own management, if we can. We’ll bring it inside. We have a board of directors that’s, I think the board of directors, nine, and four of them are outside, not family members. One of them is an employee. Was our CFO, excellent guy. Been with us for almost 50 years now, and he’s diversified something in the business on Oahu, and we’ve supported that because he had a niche he found, and he’s got a business responsible for most of the water distribution, ag water distribution, on the island of Oahu. We diversified in that deal, but it wasn’t an agricultural business from the standpoint of our product. It was an agriculture business in support of an infrastructure they needed to make products. There are farmers that can make money, and they do. There are farmers that don’t make money. They don’t, so the ones that do do that. We can support that. That’s a diversification, I guess, you’d say. But we’re a very small part of that. Our CFO runs the business, basically. We support it with his capability, running through us as the base for the financial work.

Tip Hudson: Pono, thank you for giving me so much of your time. Thanks for taking care of a beautiful place.

Pono Von Holt: Thank you.

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