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Ranchers mull feedlot expansions, interest growing among young producers

FARGO, N.D. — More livestock producers are considering adding or expanding livestock feeding operations in North Dakota, officials say.

Scott Ressler, environmental services director for the North Dakota Stockmen’s Association, says about seven feedlots are in development in the state, compared with one the state developed last year. The locations are scattered.

Most of the interest is in backgrounding yards — taking 200 day-old calves from roughly 500 pounds and feeding them up to roughly 1,000 pounds before they’re shipped to finishing feedlots.

Backgrounding interest

“There’s lots of interest among young producers who have come back home and find it hard to get more land and cows,” Ressler says. The feedlot locations are spread out, but he mentions operations in Grant, Logan and Oliver counties. The region has an advantage with affordable feedstuffs and genetics, Ressler says.

Doug Goehring, North Dakota agriculture commissioner, says his department has been working to encourage livestock feeding. The majority of cattle operations are cow-calf. Some are reluctant to expand into feeding operations because of time conflicts in the spring calving season, or because of disease concerns. Still, others are comfortable with currently healthy returns in the calf markets. Some don’t want to deal with costs of shipping to kill plants in Nebraska.

“We do have some finishers around — not a lot, but a few, and mostly in the eastern and central part of the state,” Goehring says, adding that there was a “lot of anticipation, a lot of hope,” in the failed Northern Beef Packers plant in Aberdeen, S.D. “A few that were anticipating that, or were hopeful, are very quiet now,” Goehring says.

Aberdeen’s effect

Northern Beef opened in late 2012, but the company filed Chapter 11 bankruptcy in late July 2013 and closed its doors. In early December 2013, White Oak Global Investors, a San Francisco lending company that loaned millions to the plant, bid $44.35 million for the facility. The company was reported to have been built for $115 million.

“If we could get that Aberdeen plant going, I think we’d have a much better chance of developing in the Highway 281 corridor and 100 miles on either side of it,” Goehring says. “You’d see a little more migrating to finishing livestock and you’d see a few feedlots getting larger and taking on more backgrounding.”

In the past 12 years, Ressler has met with 700 producers to assess their operations for possible cost-sharing for environmental compliance and improvements. He offers cattlemen confidential recommendations on how they might meet water quality regulations for current operations and expansions.

The association’s Stockmen’s Stewardship Support Program can pay 60 percent cost share up to $175,000 per system. Some situations call for simple systems and some would come with more extensive holding ponds and manure solids separation.

Federal subsidies

The program is funded through the Environmental Protection Agency’s Section 319 grant funds, administered through the North Dakota Department of Health. The EPA funds supply about $1 million a year spanning 22 projects, including the stockmen’s program. The stockmen’s program got $800,000 for livestock waste management two years ago. The program has received about $3 million in programs through the years.

Separately, the U.S. Department of Agriculture’s Natural Resource Conservation Service provides cost-share money on feedlot development through its Environmental Quality Incentives Program. State EQIP spending for the purpose varies from $900,000 to $2 million per year, depending on appropriations.

Josh Alsager, 33, is the owner of Alsager Ranch near Walcott, N.D. He is a fourth-generation rancher who started out at a 1,000-head feedlot and expanded steadily. He received a one-fourth cost-share from the NRCS.

Alsager says he was drawn to the cattle feeding enterprise a decade ago, partly because of available feedstuffs. Ethanol plants in Fergus Falls, Minn., Rosholt, S.D., and eventually Casselton and Hankinson in North Dakota were coming in to play with their wet distiller’s grain. He also uses beet pulp from Hillsboro, N.D., and Moorhead, Minn., and potato byproducts from growers in the region.