Another cooperative in North Dakota may not sound like headline news, as North Dakota has the second-largest number of farm co-ops in the country behind Minnesota.
But Dakota Prairie Beef, a closed-cooperative feedyard, could mean big changes for North Dakota cattle producers. Instead of selling most of their calves in the fall to feedlots in top corn-growing states, ranchers are planning to keep their calves and finish them in North Dakota.
Following in the footsteps of the many beef alliances that have formed, North Dakota producers are moving toward securing steadier profits and greater production control.
"Our purpose is to feed and finish high-quality cattle from the region using locally grown feedstuffs," says Dick Bowman, a rancher and veterinarian who is spearheading the cooperative effort. "We want to put more dollars in the pockets of our members, " he adds.
"Based on average numbers from Cattle-Fax on 15 years of data, you can make about $30 profit raising a calf vs. $60 profit in backgrounding and finishing a calf ," says Bowman.
Dakota Prairie Beef plans to return that profit to producers by requiring them to retain ownership. "It's a matter of changing the producer's mind-set from cow-calf to the next step of feeding and finishing cattle," says Bowman, chairman of the co-op's interim board.
The cooperative feedyard will provide marketing services on behalf of members, but will not own any cattle. Using ultrasound, animals will be sorted according to type and weight, in hopes of marketing cattle for optimum carcass merit. Producers will get data back on the quality of cattle being delivered.
Killdeer, ND, rancher Lance Larsen recognized the advantages of finishing cattle when he retained ownership on some of his calves for the first time last year."Our carcass data showed us we're on the right track," says Larsen. He intends to position his operation to take advantage of the quality of cattle he produces by buying 100 shares of stock in Dakota Prairie Beef.
Each co-op share Larsen buys is a contract to deliver one feeder steer or heifer each year to the co-op feedyard.
Cue From Canada - Cattle typically haven't been fed in North Dakota due to extremes in winter weather. But, Bowman says, "Our Canadian neighbors have been feeding cattle successfully for years." Since 1990 cattle feeding has increased by 40% in Alberta with lot capacities from 11,000 to 80,000 head. Barley comprises 95% of their rations, according to Bowman.
"We can compete up here because our feed is cheaper, " says Bowman. North Dakota State University research backs him up, indicating that finishing North Dakota-born calves in North Dakota has an economic advantage in lower feed cost per unit gain.
Much of the feed will be locally grown barley. Windbreaks will protect cattle from the bitter cold. Projected cost for feed and yardage is $1.54/head/day.
Why A Co-op? - Dakota Prairie Beef got its start as an answer to handle the feeding question for Northern Plains Premium Beef (NPPB) - the proposed cooperatively-owned packing plant that was to be built in the Northern Plains.
The feedyard was formed as a cooperative since North Dakota laws prevent corporate farming within the state, according to Bowman.
While NPPB is yet to become a reality, Bowman believes this feedyard cooperative will be a success. "We've started with a realistic number at 10,000 head. We want to get to 20,000 and to have more feedlots around the state, but we've got to start somewhere.
"We've also worked to keep the share cost as low as possible, so it's not a hard sell," he adds.
An equity drive is currently underway to raise enough funds to get the project started. Members will be accepted from North Dakota, South Dakota and Montana. Membership stock is a flat fee of $250 and shares cost $55-60 (depending on delivery time) with a minimum purchase of 25.
"No contract has been made with a packing plant at this point, but we have had interest and assurances that packers would show up weekly to look at the cattle," says Bowman. Carcass alliances have been contacted as well.
"NPPB isn't on the list, but if they get up and going they will be," he adds. In that case, many of the feedlot and NPPB members could be one in the same, but there is no requirement to be a NPPB member, according to Bowman.
The member-owned cattle finishing feedyard will be located on an abandoned mine site near Gascoyne, ND, in the southwest corner of the state. Buildings, scales and a functioning rail spur already exist at the location.
Dakota Prairie Beef hopes to be feeding cattle by September 1998.
For more information on Dakota Prairie Beef, contact Dick Bowman at 701/279-5830.
