Hawaii

Planes, Boats, and Trucks: Getting Cattle to the Mainland

Fri, 20 Nov 2020 05:43:14 GMT

Moving cattle to greener pastures or a feedlot has never been as simple as going from point A to point B. Most producers in the U.S. gather cattle up on horseback, with ATVs, on foot or a multitude of ways. Then those cattle are typically loaded onto a trailer and hauled to their destination. For Hawaii beef producers the Pacific Ocean makes transportation a little more complicated.

The Hawaii beef industry traces its roots to a gift of cattle given to King Kamehameha I by Captain George Vancouver in 1793. Cattle would grow wild for decades until the 1830s when the kapu (forbidden killing) was lifted. Then cattle were hunted or domesticated again leading to the birth of Hawaiian ranching. Beef for a longtime was eaten by those who lived on the islands or traded with ships that sailed to port. Shortly after World War II a feedlot and packing plant were established on Oahu to help feed the growing population of Honolulu.

“We went through the iterations of that up until boxed beef,” says veterinarian Tim Richards. “Boxed beef changed that whole dynamic and that put cattle feeding out of business here because cost of gain couldn’t compete and that’s where we shifted the industry to export the calves to the continental U.S.”

The introduction of boxed beef forced ranchers to change their business model in the late 1980s and early 1990s. Their alternative was to ship cattle via the air or sea.

The vast majority of beef in Hawaiian grocery stores comes from the mainland. Most cattle are also sent to the continental U.S.

Richards oversees the setup and coordination of health programs with shipping cattle to the mainland for several ranches in Hawaii.

“The biggest difference is the size of the ranches and the way the industry is most people of size retain ownership,” Richards says. “They have a longer influence down range into the feedyards.”

At the top of the list for size is Parker Ranch, one of three ranches on the Big Island of Hawaii to rank in the top 25 nationally for cow herd size. The Parker Ranch is home to 9,000 cows, but approximately 5,300 head of their calves have to be shipped to the mainland for finishing.

Calves are typically weaned for 30 days and shipped at 400 lbs. of weight says Keoki Wood, livestock operations manager at Parker Ranch.

“Shipping is a concern, anytime you have to ship cattle that far. On the mainland trucking is one of those necessary evils, the less you have to do the better,” Wood says.

To reduce stress Parker Ranch prefers shipping to the continental U.S. via 747 cargo planes. Calves are loaded into specially designed 8 ft. by 10 ft. boxes. Twenty boxes can be carried by a plane for a load of 100,000 lbs. which makes two truckloads on the other end.

“The challenge with that is you dribble cattle out all year long. It is a back haul for the 747 so whenever they can displace you with higher paying freight they will,” Wood relates. “During the Holidays when there is more freight they tend to skip weeks so your schedule is 200 head if you’re lucky every week. You can’t afford to charter a plane strictly for cattle.”

Door to door whether it’s by air or sea it costs at least $0.47/lb. to ship an animal, that’s approximately $200 for a 425 lb. calf.

While shrink isn’t detrimental to the calves it is a consideration when shipping cattle.

“We actually see more shrink on air freight than we do on the ocean. Air freight they recover a lot quicker, but you’re going to have 10% shrink,” Wood says.

For a typical journey cattle are loaded onto a plane at Kona International Airport on Saturday morning, by early Sunday morning they’ll have landed in Los Angeles and be loaded onto trucks headed to Oregon or Texas.

“You put them on a little feed and water and by a week they’ll be in good shape,” Wood adds. “Ocean freight is a little bit tougher.”

Since mid-July, Parker Ranch has shifted back to transporting the majority of calves via the ocean to the port in Seattle. The move has reduced trucking costs and allowed larger amounts of calves to be hauled in fewer shipments.

Ponoholo Ranch on the northern side of the Big Island has also preferred the ocean route. Ranch owner and operator Pono von Holt estimates that 70% of his calves born from 3,000 cows are sent to the mainland with specialized shipping containers called “cowtainers” each year.

The cowtainers are equipped with waterers and feeders and have a second deck on them.

Cattle are loaded into double decker “cowtainers” at ranches before the specialized shipping containers are loaded onto the ship.

“For shipping it’s really important for us to get the loads right because these cattle are in the containers for eight or nine days. They’re on feed and water but you’ve got to get them loaded right for their square footage,” von Holt says.

Calves are loaded onto the cowtainers at the ranch according to weight and based off of a USDA calculation.

The shrink on calves is only 6 to 7% because of the access to feed and water, but much of that shrink is tissue loss. It takes a little longer to gain back that weight von Holt says.

“From a cattle standpoint the airplane is a better trip,” von Holt relates that he does use air transport for some smaller shipments. “For us shipping larger and larger amounts of cattle the ship is more efficient.”

To load 100,000 lbs. of cattle onto trailers, haul them to the airport and load them on the plane requires nearly the same amount of effort went through loading 600,000 lbs. in containers destined for a boat.

Availability of the planes is another reason von Holt prefers transport on the ship with cowtainers.

“You can schedule it out, but you can’t just pick up the phone and say ‘send me the airplane tomorrow.’ You don’t do that in Hawaii, or ‘send me a container for the ship tomorrow.’ You schedule it out 60 days or longer in advance,” von Holt says.

Calves from the Ponoholo Ranch typically arrive at the port in Seattle and are sent to pastures in the northwestern U.S. After adding weight half of the cattle go to a feedlot in Texas while the other half end up at a feedlot in Oregon where they can be marketed through the Country Natural Beef program.

Locally Raised Beef Catching on in Hawaii

Fri, 20 Nov 2020 05:41:25 GMT

Hawaii is seeing a changing of the guard when it comes to local beef consumption.

“Now in probably the last five years with the interest in local food with people willing to pay the price and the interest in forage based finishing that is where the industry is shifting again,” says veterinarian Tim Richards. Richards aids ranches on the Big Island of Hawaii setup health programs and also helps manage his family operation Kahua Ranch.

This past year Parker Ranch, the largest ranch in Hawaii, and Ulupono Initiative announced the launch of the Paniolo Cattle Company, a joint venture aimed at statewide local beef production. Parker Ranch will raise close to 1,400 calves for the locally based program that will increase the amount of local beef sold by 35%.

This Parker Ranch steer will be part of a 35% increase in locally raised beef that is sold across Hawaii.

“Here’s the irony, we’re in the top 10 in terms of size (nationally). We produce 400 lbs. here, ship it to the mainland and pay somebody else to produce the other 800 lbs. They got paid first every time,” says Keoki Wood, livestock operation manger at Parker Ranch. “The idea was to maybe encourage more of that production here and pay our guys first. But it is a tough, tough road to go down right now, especially with record high calf prices.”

Ponoholo Ranch also takes part in raising calves for local markets. Approximately 300 of the 3,000 calves born at Ponoholo Ranch are finished on grass before being sold as beef to Whole Foods Markets on the islands of Maui and Oahu.

“If it is possible and it is competitive we’d like the market more here just from a risk management standpoint,” says Pono von Holt owner and rancher at Ponoholo Ranch.

For the grass-fed and local markets to progress any further Richards believes it will require an investment in a modernized packing plant.

“Somebody has to build it and it’s not necessarily going to be a Field of Dreams ‘build it and they will come.’ The problem is who is going to pay the checks while it takes five to 10 years for the thing to ramp up,” Richards says. “It’s a tough one.”

These locally raised strip steaks were bringing just under $16/lb. in early July on the island of Oahu.

Wood agrees that it will require a new, small scale packer to help meet the demand. Currently there are two small plants that help service the cull cow market and local calf slaughter, but both are outdated and too small to take care of the possible local production increase.

“It’s a real interesting time,” Wood says. “I don’t see us leaving all of the cattle here, but if we have to make some infrastructure investment we’ll certainly support that investment.”

The majority of calves are still sent to the continental U.S. to be finished on grain.

Ranching in Hawaii is not that drastically different from production on the mainland U.S. The majority of cattle still have to be moved for marketing and consumer trends are helping decide how those cattle are raised.

“Hawaii’s got some great comparative advantages and it’s got some disadvantages, distance to market and feed is one of them. The advantage is we have year-round grazing so we don’t have to make hay,” von Holt says. “It all gets back to the cost of operation. A good ranch that controls their costs is going to be profitable in any environment.”

Microgrid Project Supports Renewable Energy on Hawaii’s Parker Ranch

Fri, 13 Nov 2020 02:23:43 GMT

The largest cattle ranch in Hawaii is working on an electrical project with a microgrid that will help support renewable energy and grid resiliency on the operation.

The Parker Ranch on the island of Hawaii, also known as the Big Island, has entered a partnership with Go Electric Inc. to design and build a 400-kW microgrid on-site. The project is slated to start later in 2018 and should be completed by the second quarter of next year.

The microgrid will help service the ranch’s cattle water pumps and other commercial initiatives near the microgrid.

“The Go Electric microgrid underpins the three major strategies at Parker Ranch–Energy, Agriculture and Community Development,” says Dutch Kuyper, president and CEO of Parker Ranch. “Through energy resiliency we’ll enable a sustainable future for the ranch, the community, and the Big Island.”

Parker Ranch will also install a solar photovoltaic, also known as solar cells, at the site near Waimea. This will include battery energy storage and a back-up diesel generator.

“The Go Electric microgrid underpins the three major strategies at Parker Ranch–Energy, Agriculture and Community Development,” says Dutch Kuyper, president and CEO of Parker Ranch. “Through energy resiliency we’ll enable a sustainable future for the ranch, the community, and the Big Island.”

Having the renewable energy assets will ensures that the during a grid outage to supply grid services to Hawaii Electric Light Company (HELCO). This will similarly provide grid stability during peak demand or periods with grid frequency or voltage challenges for HELCO.

“This microgrid is a unique nexus of energy, agriculture, and water,” says Lisa Laughner, CEO of Go Electric. “We are delighted to be part of Parker Ranch’s resiliency vision while contributing to the broader grid resiliency on the Big Island.”

The Parker Ranch has been operating on the Big Island of Hawaii for more than 160 years. The ranch is in a charitable trust and is 130,000 acres in size. According to CattleFax data from 2016 , Parker Ranch is the ninth largest cow-calf operation in the U.S.

What Can $1.6 Billion Mega Millions Lottery Buy Farmers and Ranchers?

Fri, 13 Nov 2020 02:23:35 GMT

Despite having just a 1 in 302.6 million chance of winning the record-high Mega Millions lottery, farmers and ranchers are dreaming big on what they could buy with the winnings .

The possibilities are nearly endless with the value now at $1.6 billion. A sprawling ranch. A fleet of new tractors. Several boat loads of soybeans. A few thousand cattle. You name it, you can probably buy it.

We’ve gathered up some ideas as to what producers could buy. The majority of lottery winners take the lump sum, valued at $904 million for a cash-out, and taxes still have to be taken out. That leaves between $489.8 million to $569.5 million depending on what state you live in , so we’ll just say you have $500 million to play with.

Here is what winning Mega Millions could buy you in agriculture:

58.2 Million Bushels of Soybeans

^{Farm Journal}

Soybeans have taken a hit in value this year after retaliatory tariffs were put in place by China. If a farmer had storage in place they might want to sit on some beans and wait for the market to rally again when the trade tension with China has eased. At 11 am CDT on Oct. 22, November futures for soybeans were trading at $8.59/bushel, which means a total of 58,207,217 bushels of beans could be bought. With that amount of beans it would account 1.2% of all soybean production with an estimated 4.69 billion bushels projected by USDA .

The World’s Largest Cattle Feeder, Plus Half the Cattle to Restock the Yards

^{Wyatt Bechtel}

This year the world’s largest cattle feeder, Five Rivers Cattle Feeding, was sold by JBS USA to Pinnacle Asset Management, L.P. The sale was for a reported $200 million and included 11 feedlots located across Arizona, Colorado, Idaho, Kansas, Oklahoma and Texas. The feedlots have an estimated one-time capacity of 980,000 head, so with the remaining money a person could buy a few cattle to halfway restock the feedlots. After looking at auction reports from USDA across the country, there were 138 head of Medium-Large #1-2 heifers that sold in various Tennessee livestock markets for $124.93/cwt during the Oct. 20 report . At that price rate 490,000 heifers could be bought with approximately $15 million remaining to truck the cattle home. Hopefully you can hit the $620 million Powerball to pay for feed and any treatment costs.

200 Million Gallons of Milk

^{Farm Journal}

Dairy farmers have been struggling with another year of low milk prices and to help bring awareness to the problem the #10GallonChallenge was started . The social media campaign involves purchasing 10 gallon jugs of milk and then donating the milk to local food pantries. USDA calculates a gallon of milk costs $2.49 across the entire country , so that would mean you could buy 200,803,212 gallons of milk. That’s more than 20 million 10 gallon challenges worth of milk.

16,666 Acres of Almond Groves in California

^{David Paul Morris/Bloomberg}

Almonds have been growing in popularity among growers in California with acreage rising 7% from 2016 to 2017 . The high value cash crop should continue to have decent returns and land prices suggest that an average rate of $30,000/acre could purchase almond land in California. At that suggested rate your almond groves would be 16,666 acres in size. Hopefully you won’t need any help “milking” your almonds .

7,296 Used John Deere 9410 Combines

^{Machinery Pete}

A recent find by Machinery Pete was the sale of a John Deere 9410 Maximizer with 2,520 engine hours in Spencerville, Ontario. The combine brought $89,000 CAD for the final sale price, which converted in U.S. dollars = $68,530 at a Canadian to U.S. dollar exchange rate of .77. That’s the highest auction price for that type of combine in six years. If you were to buy as many John Deere 9410 Combines as possible it would come to 7,296 machines with your lottery winnings. Could be the start of a pretty large custom harvesting fleet.

8 Million Shares in Tyson Foods

^Google

Tyson Foods, Inc., the largest publicly traded meat packer in the U.S., was on a boom at the end of 2017 following a meteoric rise since 2008 . Stock prices for the company peaked at $83.56 on Dec. 5, 2017. Prices have since fallen to $62.05 per share of Tyson at 1 pm CDT on Oct. 22, but it is still a good investment with the world’s growing need for animal protein. A total of 8,058,017 shares in Tyson could be purchased at current values.

Hawaiian and Alaskan Island Ranches, Plus a Few Thousand Acres in Texas

^{Molokai Ranch}

There are plenty of multi-million dollar ranches for sale across the U.S., including T. Boone Pickens’ sprawling 64,809 acre Texas Panhandle property . We thought we’d save some money by not purchasing the oil tycoon’s $250 million ranch and opt for some smaller ranches in Texas, which would leave enough for a tropical island ranch in Hawaii and a slightly colder location in Alaska.

The 55,575 acre Molokai Ranch on the Hawaiian island of Molokai with an asking price of $260 million would top the purchase list. Then we’d line up the 500,000-acre Bering Pacific Ranches located on Alaska’s Aleutian Islands for only $19.9 million.

This would leave another $220 million for more ranch land so we’ll put a bid of $52 million on the 37,759 acre KC7 Ranch near Balmorhea, Texas . Add on the similarly priced KB Carter Ranch for $51 million puts 15,000 acres of east Texas property in the portfolio. The Northrup Pipe Creek Ranch for $49.95 million, the Sulphur Bluff Ranch for $43,940,500, the Circle J&B Ranch for $12.5 million and the Wagon Wheel Ranch for $8.8 million would help make up the rest of the ranch holdings in Texas.

Overall the newly formed Mega Millions Ranch would have 633,506 acres total in three states, with a total of 77,931 acres located on six separate Texas properties. There would still be about $2.2 million left to purchase something else. We’d recommend a plane to get between all those ranches, maybe this Cessna Grand Caravan EX could do the trick.

What would you spend your winnings on? Would you buy land, cattle, machinery or a new shop? Would you retire from farming and live off the interest? Let us know in the comments.

Hawaii Cattle Company Gets $300,000 to Expand Production

Fri, 13 Nov 2020 02:20:14 GMT

An effort to promote more local beef production and reduce the state’s reliance on imported meats has received a six-figure investment from a Hawaii-based venture capital fund.

EEx Fund One LLC, which supports Energy Excelerator programs, has invested $300,000 in Kunoa Cattle Company, The Garden Island reported on Tuesday.

“With this additional support we can do more to create an authentic local food system, with healthier land, animals and food,” said Kunoa co-founder Bobby Farias.

The cattle company recently purchased and upgraded Oahu’s only slaughterhouse with the goal of expanding Hawaii’s market for locally produced beef.

At the state-owned facility, the company has provided enhanced processing of its own livestock and livestock from other producers throughout the state that are selling under their own individual local meat brands.

About 10,000 animals a year can be processed at the slaughterhouse, said Jack Beuttell, a partner with Kunoa Cattle Company.

“Our goal is that by investing in this facility and upgrading it and improving the standards for animal welfare and food safety, we can attract more business from our fellow ranchers across the state and perform services for them so they can increase their production as well,” Beuttell said in a previous interview with the newspaper.

Supporters of the project say it will help boost the state’s economy and reduce the need to turn to outside sources for meat.

“Kunoa’s solution is an important part of the goal to increase food self-sufficiency in Hawaii, where we import more than 90 percent of our beef supply,” said Jill Sims, co-founder of Energy Excelerator. “Supporting companies that drive solutions to the challenges we face as a state is key to growing an innovation economy.”

EEx Fund One LLC invests in companies that have participated in Energy Excelerator programs. Kunoa Cattle Company was selected in 2015 to participate in a program that provided seed funding and introductions to customers, investors and other strategic partners.

The cattle company is one of dozens of projects funded by Energy Excelerator that aim to provide solutions to the world’s energy problems.