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Published July 06, 2010, 11:04 AM

Survive to thrive: Bison co-op director is last from original board

MILNOR, N.D. — Bison are a picture of physical toughness on the prairie, surely no tougher than the core of producers who have managed to live through a market that overheated in the mid- to late 1990s and then fell into a deep freeze.

By: Mikkel Pates, Agweek

MILNOR, N.D. — Bison are a picture of physical toughness on the prairie, surely no tougher than the core of producers who have managed to live through a market that overheated in the mid- to late 1990s and then fell into a deep freeze.

Among the survivors who has worked to pull the industry up is Dick Ruby of Milnor, N.D., a self-made businessman who parlayed his profits from beekeeping into a bison enterprise.

Besides being a producer, Ruby is the last remaining original board member of the North American Bison Cooperative and has served as secretary through most of the co-op’s history. He thinks the industry is set for a sustainable expansion, under proven leadership.

Bees to bison

Born in 1943, Ruby was raised near Osage City in east-central Kansas on a farm. At age 10, he received a gift of four beehives from a grandfather for a 4-H project.

By the time Ruby graduated from high school in 1961, he had about 200 honeybee hives. An acquaintance from Kansas had moved to Kindred, N.D., and told young Ruby that an older honey producer near Mooreton, N.D., needed some help. So at age 20, Ruby moved to North Dakota.

First, he worked with established beekeepers and eventually bought some of them out. In 1966, he went on his own with 600 hives. He married Donna Vantassel from Breckenridge, Minn., in 1968. The two started their family in Dwight, N.D. In 1975, they moved Ruby Apiaries to Milnor, the center of his bee territory.

The enterprise soon grew to 6,000 hives and then peaked at 11,000 hives. In the 1980s, Ruby kept bees in 250 locations and ranked as the largest producer in the state.

“The 1980s was droughty, and honey prices were depressed,” Ruby recalls. “The government honey loan program was constantly being challenged. It was a struggle. I just decided — running that many hives — that it wasn’t worth it.”

He started cutting back and his son, Doug, then in his early 20s, took over in 1998. Dick is separate from the operation, which now handles some 3,500 hives.

Meanwhile, Dick followed a new passion.

Bison adventure

In 1992, he was nearly 50 years old and finding a new focus in bison.

“I knew nothing about buffalo,” Ruby recalls.

He and a friend, Randy Asche, from Milnor, each bought three heifers of a species. Ruby lived in town and rented a spot from Asche on an acreage south of town where Asche also ran a trucking company.

“I just became fascinated with them and decided I’ve got to get me some more of these things, and it just kept growing from there,” Ruby says.

About this time, Ruby heard about that the group near New Rockford, N.D., was trying to form a bison processing cooperative. In 1993, Dr. Ken “Doc” Throlson of New Rockford, the veterinarian and founding board chairman of the group, asked Ruby if he’d serve on a temporary board of what would become the North American Bison Cooperative.

“I don’t think any of us realized what we were getting into,” Ruby says.

The group met as often as twice a week initially, Ruby says, and it was quite an education.

Ruby was on the board as the co-op built the plant, which initially was designed to handle 5,000 animals a year.

It was a heady time. Bison prices shot up through the mid- to late-1990s.

“It really caught on, a lot of people were interested in it,” he says.

The Rubys bought the Asche place and moved there in 1998. They expanded the bison operation, at one point, owning 1,800 head. The distinctive pens are made from pipe and “sucker rod” from the oil drilling business.

“I couldn’t believe it — gosh, when those cows were selling for $3,000 to or $4,000,” he says. “I sold some year-old heifers for $2,500 — the top end of my heifer calves when they were weaned. I guess we knew that that price wasn’t going to last forever, but I don’t think anybody had any idea it would drop as low as it did.”

Life in the collapse

When the market was oversupplied, prices went to nearly nill — calves to $200 to $300 or less. The crash was especially disastrous for people who had bet the farm to buy the animals in the upper end of the price range.

The co-op gradually got into trouble by purchasing member animals at a relatively high price and then being unable to sell the meat in a timely fashion, and convinced by their own marketing staff not to cut back on production.

“We were listening to our salesmen who had come out of the pork and beef industry,” Ruby recalls. “They were used to selling huge amounts of meat and told us we were going to sell out (the stored meat) real quick. But they weren’t able to do this job. We should have seen the light.”

Lots of people agreed on this strategy. One of the board members managed media mogul Ted Turner’s ranches, Ruby recalls, and several from Turner’s organization would attend co-op meetings.

Some of the co-op’s stored meat got

to be 2 and 3 years old, and some of it didn’t keep as it was supposed to.

The light at the end of the tunnel turned out to a freight train. The co-op piled up unsold meat and owed some $20 million in deferred payment to members, who — as members of a co-op — didn’t have the same protections as beef producers under federal law. Members signed agreements that they would only get paid as the meat from animals they’d delivered were sold, not realizing how long it would go.

“It broke a lot of people,” Ruby says.

‘A heckuva hole’

Ruby says the company’s new direction started in 2005 when they hired Dieter Pape to take the helm. The board changed management, and Pape took the organization into and back out of bankruptcy.

“We’d dug a heckuva hole for Dieter to deal with, taking over this new position,” Ruby says.

After the bankruptcy, board members like Ruby started over with their term limits of three three-year terms.

Pape, who had a marketing background and experience in the fish business, quickly put together a team to head the ship in a new direction. There was the Chapter 11 reorganization. The frozen meat inventory, worth a fraction of its value, was flushed out.

Ruby says the co-op still owes members millions in deferred payments.

“The intent is still to pay that off,” Ruby says. “There’s a formulation level, where, if we reach a certain profit level, an amount is paid off from this deferred amount.”

Will the amount ever get paid?

“That’s a good question,” Ruby says. “Our intentions are to pay that if we can make a sufficient profit. That’s going to take a long time. We’re growing so fast now that you know there are other financial needs.”

Through pain, to gain

Ruby says there’s no doubt that the directors feel any pain that other members do.

“I should say, though, that the larger amounts are owed to people who were, or are still, on the board of directors,” Ruby says.

Of the five people who had the most coming, four were on the board at the time.

Ruby acknowledges he lost money in the debacle, but it didn’t tip him over financially. He’d accumulated some land from his bee business and had to sell some of it to survive

At age 67, Ruby says he’s been purposely cutting back on his bison. He has two more years on his term on the board, but would be eligible for one more after that. He thinks it’s time to spend more time with his grandkids.

“I enjoy what I’m doing, but I want a little less of it,” he says. “I used to have about 500 in the feedlot here — for awhile I had about 1,000 — but I’ve cut that number way back. I’ve got 116 cows now, where I had 400 or 500 cows a few years back.

One thing that hasn’t ever changed: Ruby’s admiration for bison.

“If you like livestock or animals, you can’t help become attached to the animal,” he says, recalling one particular story of the animal’s legendary toughness.

“I hadn’t been a producer very long and I remember one year a calf was born the day after Christmas. It was 24 below zero,” Ruby recalls. “I took some straw out there for the calf to lay on, but it stayed away. Once the mother got the calf dried off, it was fine — ears froze a little, a few kinks in the tail, but it made it OK — out there in a snowbank at 24 below. Now that’s a survivor.”

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