BISMARCK, N.D. - About six years have passed since Dean Ulmer and Jess George began contemplating building a new livestock sale barn in North Dakota's capital city. Now, after a few false starts brought on by health issues and zoning confusion, the partners are working to get Bismarck Livestock Auction up and running by fall.
The blue building, about a mile and a half north of Interstate 94 a few miles outside Bismarck, lacks most of its exterior doors, and little progress has been made on its interior. Dirt work hasn't been completed, and no pens have been built.
But a commercial scale is in place where Ulmer and George plan to put the auction block, and they're working with contractors to get back on track to fill a need for the state's cattle industry.
"We're going to try to do the best business we can, and hopefully we can move a lot of cattle through here," George says.
At least four sale barns have closed in North Dakota in the past 12 or so years: Farmers Livestock Exchange in Bismarck, Northern Livestock Exchange in Minot, Linton Livestock Auction in Linton and Edgeley Livestock in Edgeley. The closures have left 11 sale barn companies in the state, North Dakota Agriculture Commissioner Doug Goehring says.
Some of those barns, as a result, have been "swamped" with cattle, as George puts it. Sales at Kist Livestock in Mandan and Napoleon Livestock in Napoleon sometimes stretch into the middle of the night during the busy fall season. Stockmen's Livestock in Dickinson operates two barns, each with its own feeder sales.
"For convenience sake, you could probably have a couple more in the state," Goehring says.
Another barn, George says, won't be competition for existing facilities. It'll be a complement and a way to deal with the crush of cattle being sold.
"I've been asked to do this for a long time," George says. "I know a lot of ranchers. I've dealt with a lot of ranchers. I've sold their cattle. And they always say, boy, we're in need of another sale barn."
Feeding operation or sale barn?
Ulmer and George applied for and received permits in 2014. But Ulmer had some health problems throughout 2015-16 that kept them from starting construction within a two-year window allowed in the process. They reapplied in 2018, receiving their permits in October.
With permission from the city of Bismarck in hand, they started construction.
"They were told they were good to go," attorney Chris Nyhus says.
But by February, construction would stop as confusion over the city's zoning regulations began.
The proposed site of Bismarck Livestock Auction sits outside of Bismarck city limits by several miles. However, it is in the "roughly three mile" extraterritorial zone - an area in which the city has zoning control, Nyhus says.
Livestock sales pavilions are allowed in areas zoned A-Agricultural under the city's zoning regulations, Nyhus explains. And that's what the Bismarck Livestock Auction project was considered.
However, after investing about $1.5 million into the project, George on Feb. 4 received a letter from the city attorney's office indicating the project also would be considered an animal feeding operation. Under that portion of the city's zoning regulations, the barn could only house more than 299 animals on 44 or fewer days of the year.
Those restrictions would have made the business non-viable. So, construction stopped, and the partners appealed the city attorney's determination to the Bismarck Board of Adjustment, a six-member panel that considers administrative appeals in the city.
Nyhus explains his clients' contention is that feeding of animals is an incidental use of the facility, not the purpose of it.
"This is not an animal feeding operation," Nyhus says. "It is not a feedlot. It's a sale barn."
"We're planning on selling and moving cattle directly through there," George says. "They come in, we weigh them, sell them, and they leave."
Dave Glatt, director of the North Dakota Department of Environmental Quality, says his department determined that Bismarck Livestock Auction would not need a state permit to operate as a confined animal feeding operation. For that to take place, the barn would regularly need to house more than 1,000 head of livestock.
"Then it became a local zoning issue," Glatt says.
Ben Ereth, director of the Community Development Department for the city of Bismarck, says the city earlier had been under the impression that the barn would move fewer cattle.
"We felt it met the definition of an animal feeding operation," Ereth says.
Nyhus contends the city was improperly reading two ordinances together: one which permitted livestock sales pavilions in A-Agricultural Zones and one which listed permitted farming practices in the extraterritorial zone.
The city and the state definitions of animal feeding operations are not identical, adding to some of the confusion. Glatt says there are two sale barns in the state permitted as animal feeding operations: Bowman Auction Market and Wishek Livestock Sales. If the Bismarck Livestock Auction were to house more than 1,000 head over a 45-day period, the state would consider requiring permitting, he says. However, barns in the state that routinely handle those kinds of numbers are not permitted as animal feeding operations.
On June 6, the Board of Adjustment unanimously ruled with Ulmer and George, finding that the barn was not an animal feeding operation under city code.
"The Board of Adjustment was very conscientious about this," Nyhus says.
The city could appeal the decision during a 15-day window that ends June 21. According to Ereth, no decision had been made as of June 10. Nyhus hopes the city does not appeal, especially given the unanimous decision by the Board of Adjustment. Because Ulmer and George moved forward based on the city's go-ahead in October 2018, a change in that decision would mean a lawsuit to recoup their expenses.
"My clients' only option at that point is having to go into court. My clients didn't build a livestock sales pavilion to buy a lawsuit," Nyhus says.
The Department of Environmental Quality, previously a division of the Department of Health, will have some regulatory oversight of the project.
"Obviously we take protection of the environment very seriously. We really work with operators to ensure manure and other aspects of these facilities have a minimal impact on the environment," Glatt says.
Goehring says the state's existing sale barns have been good neighbors who work with regulators to make sure they're doing things right.
"For the most part, they have good waste management plans in place," he says.
As long as the city doesn't appeal, George and Ulmer plan to get construction going again once the contractors are available. They want to be in business by early fall, and they plan to hold regular feeder sales as well as production sales.
George says he's thankful for the people of Bismarck who have stood by them, as well as for members of the agricultural community who have shown their support.
"I promise you, we will be a good outfit," George says. "You will not have to worry about us."
A history of cattle sales
Ulmer and George are no newcomers to the cattle industry. Ulmer, George explains, was raised in a sale barn family; his father, Gordie Ulmer, owned several barns in the region. Ulmer worked in the back pens from the time he was a child.
George, too, worked in the back pens at McLaughlin (S.D.) Livestock Auction. Then in 2004, he started working for Superior Livestock Auction and was among the first people to bring video auctions to North Dakota. He worked for Superior for 12 years before switching to Northern Livestock Video Auction three years ago.
"I guess we've both been around it for a long time," George says.
Goehring says Ulmer and George have not yet sought licensing and bonding for Bismarck Livestock Auction, but that won't be required until the facility is operational. Both Ulmer and George have been licensed for "many years" as livestock dealers and agents, he says.
"We license all sale barns and make sure that they're bonded appropriately. So we manage and monitor them to the degree that they're financially viable and can do business in the state of North Dakota," Goehring explains.
Starting Bismarck Livestock Auction does not mean George will leave the video auction world behind. He plans to continue with Northern Livestock Video Auction. Plus, he sees Bismarck Livestock Auction incorporating some more modern elements, though "you'll have to wait and see" what they are, he says.
"We're going to be modern," he says. "We're going to try to do some things that'll be a little different."