Bison Industry Reaches Out To Newcomers – for Sep. 23, 2010

Red-hot demand and soaring prices for bison meat have producers smiling, but are causing headaches for marketers.

“It’s going to take time, and people have to understand that,” said Terry Kremeniuk, executive director of the Canadian Bison Association. “The North American herd is very small and the demand is very high.”

The association is trying to attract newcomers to the industry through workshops on raising bison, promotional material aimed at persuading cattle and elk ranchers to switch over, and encouraging lenders to make loans to new entrants.

The number of bison going to North American kill plants has doubled since 2005, but the annual kill of 92,000 animals still can’t meet demand. Rising meat prices (producers are currently receiving a hot, hanging weight price of $3 per pound) initially prompted ranchers to sell heifers and cull older cows, said Kremeniuk.

HOLDING BACK HEIFERS

But now they’re holding back heifers to build their herds, he said.

“I think a lot of the bigger producers who are serious about bison are keeping more,” agreed Trevor Gompf, a bison producer from Oak Lake.

Gompf has 130 females of breeding age in his herd but plans to retain at least twice as many heifers as usual, with the goal of increasing his herd to 175 cows.

Nolan Miller, a bison rancher from Binscarth with 370 breeding females, did the same thing last year and plans to retain even more heifers this year, which will pretty much max out his available pasture.

A typical replacement rate for bison is quite low, about five to seven per cent, he said.

“Beef cattle only get nine or 10 years out of a cow,” said Miller. “With buffalo, you get closer to 20 years out of them.”

DELAYED PRODUCTION

However, since bison cows are typically bred at two years, boosting productive cow numbers is delayed an extra year over cattle.

The 2006 farm census put the number of head at about 200,000 but that figure likely dipped as low as 190,000 in the last couple of years when producers were taking profits, said Kremeniuk. (The U. S. herd is slightly larger than Canada’s.)

Prices now are reportedly at a 10-year high, but that won’t be confirmed until bred cows start going to market later this fall. Gompf expects top animals to fetch anywhere from $2,500 to $3,000.

That’s still well below the 1999 bubble, when a speculative mania drove the price of bred cows as high as $7,000. Former CNN tycoon Ted Turner was the face of that time as he stocked his Great Plains ranches with thousands of head.

PRICES PLUNGED

Herd numbers were decimated by the BSE crisis when prices plunged as low as $300 per head.

“The shortage has driven the price up,” said Miller, who expects they will stay high for “a minimum” of five years.

“Now, you’re going to have new people coming in to buy

heifers and you’re going to have guys keeping back heifers, and that takes animals out of the meat market.”

Manitoba Bison Association president Len Epp expects many of the new entrants will be switching from other types of livestock production.

“Right now, what we would like to see is for cattle guys to switch or guys who got out of the elk business. The elk guys would have the fencing done already,” he said.

But the biggest hurdle for many will be financing, said Epp, adding the cost of buying animals, building fencing, and handling facilities (such as welded-steel chutes) is “huge.”

”For anything to do with agriculture right now, it’s tough to get money,” he said. “It’s always ironic with the banks when you need money, they don’t have any to give you. But when you have money, they’ve got lots to lend you.”

FINANCING CHALLENGE

But Kevin Craig, vice-president of lending operations for Manitoba Agriculture Services Corporation (MASC), said stories of not being able to borrow for bison production are exaggerated.

“There may be a credit crunch in the terms (of what) they would like to have,” said Craig. “They probably could access more credit, but they would have to put up perhaps more to get that credit than they want.”

However, lenders don’t want to return to the aggressive lending of the mid-1990s, which was followed by prices bursting for exotic livestock, which included everything from pot-bellied pigs to hedgehogs. Craig said he’s heard stories of bison cows being bought for as much as $10,000 each at 80 per cent financing in 2003 and then later sold for as little as $150.

MASC is aware of the turnaround in the bison industry, he said, and continues to offer a range of lending programs for livestock and even exotics, but everything depends on the prospective borrower’s due diligence and willingness to put up collateral.

“We’ll treat them like anybody else with a business plan that comes to us for a loan,” said Craig. “Do lenders really want to take just a bunch of bison cows as security? Well, probably not. They are going to ask for land to support it.” [email protected]

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Now,you’regoingtohavenewpeople comingintobuyheifersandyou’regoing tohaveguyskeepingbackheifers,andthat takesanimalsoutofthemeatmarket.”

– BISON RANCHER NOLAN MILLER

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