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Beef industry mixed on what effects of corporate agriculture could be

BISMARCK -- Few people argued that North Dakota's beef industry needed help staying relevant when a bill arose in the 2015 Legislature that would have loosened the state's anti-corporate agriculture law.

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Randy Weigel tells attendees at the North Dakota Stockmen's Association feedlot tour about his 2,500-head feedlot near Kintyre, N.D., on June 21, 2016. (Jenny Schlect / Bismarck Tribune)

BISMARCK -- Few people argued that North Dakota’s beef industry needed help staying relevant when a bill arose in the 2015 Legislature that would have loosened the state’s anti-corporate agriculture law.

Current law allows only corporations made up of families to own agricultural land. Proponents of the bill thought allowing corporate swine and dairy operations to rent or own up to 640 acres of land would stimulate the dwindling industries.

While a voter referendum last month killed that measure, the idea of expanding corporate agriculture in North Dakota did not die with it. The North Dakota Farm Bureau is suing in federal court to do away with the law in its entirety, which would allow corporations to be involved in any agricultural venture.

What impacts such a move could have on the beef industry remain to be seen.

The number of beef cattle operations in North Dakota has decreased from more than 15,000 in 1982 to fewer than 9,000 in 2012, according to U.S. Department of Agriculture data. However, the number of beef cows in the state remains high, with 904,000 beef cows and 55,000 head on feed for slaughter in the state as of Jan. 1.

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And a new packing plant in Aberdeen, S.D., could open up more opportunities for feeding and finishing cattle, as North Dakota has the feed, the grass and the environment ripe for adding cattle to the herd.

“There is room for expansion,” said Julie Ellingson, executive vice president of the North Dakota Stockmen's Association.

Scott Ressler, environmental services director for the Stockmen’s Association, said growth has come from existing producers increasing their herd sizes rather than from new, larger operations. Some producers have opted to put up feedlots to take advantage of the fact that more animals can be raised on a smaller amount of ground, he said.

The Stockmen’s Association in June held its annual feedlot tour, taking interested producers to four central North Dakota operations. Ressler said the tour has grown during its 14 years from eight people in a van to more than 100 people caravanning to sites across the state to learn about feedlot development, pen and feed bunk design and the difficulties and successes of running a feedlot.

Ressler said the increase in interest in feedlots comes as young people return to their home farms to find 200 cows and 2,000 acres aren’t enough to support more than one family. A feedlot can be an effective way to increase production without more land.

But the enterprises are expensive. The Stockmen’s Association helps connect people with cost-share, loan and grant programs to off-set costs, but even with assistance, price tags carry six figures.

The expense and risk involved in such ventures are why Hensler-area producer Clark Price was one of the few people who wanted to add feedlots to the bill that ultimately was overturned by voters. Price said other businesses can organize with the corporate structure, and it doesn’t seem fair to limit farmers and ranchers from using it.

An expansion of corporate agriculture would allow a group of neighbors to pool their money, put up a feedlot to feed their cattle with their own corn and add value to the products, he said. While some have argued people can do that in a partnership, Price said a corporation limits a person’s personal liability.

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Corporations already own animals in the state; they just can’t own land, he pointed out. He thinks many people are using horror stories about huge corporate enterprises as a bogeyman to scare people.

“A corporation is simply a business structure and I don’t understand why we don’t think that should be used,” he said.

But others worry expanding corporate agriculture in the state would move North Dakota from a state of family farmers to a state of big businesses running farms and ranches.

The Independent Beef Association of North Dakota helped gather signatures to get the corporate agriculture bill on the ballot. President Larry Kinev said the beef industry advocacy group supports family farms.

“And corporate agriculture is far from the family farm,” he said.

Kinev isn’t too worried about the small corporations Price envisions. He worries about huge, worldwide companies that have purchased farms and ranches in other states.

“North Dakota would be opened to the entire world, because the U.S. is open to the entire world,” he said.

That would pit North Dakota producers against big businesses with deep pockets when it comes to renting and purchasing land and buying feed, he said. It might push producers to raise or feed animals for big businesses, furthering vertical integration in the industry and raising competitive concerns.

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Not all producers have a stance on the matter. Kintyre rancher and cattle buyer Randy Weigel said his operation wouldn’t change even if the law did. Weigel’s 2,500-head feedlot was the largest featured on the Stockmen’s Association feedlot tour.

As he explained to the more than 100 people who showed up to see his feedlot, Weigel’s business is family owned and family operated. He and his son are cattle buyers who purchase calves and feed them until it is time to send them to other feedlots for finishing. They own all of the land on which they produce their feed and on which their feedlot sits.

The North Dakota Stockmen’s Association did not take a position on the corporate farming bill. Ellingson said: “We have members that have feelings on both sides."

The association instead brought in attorneys and accountants to its last convention to help members get a feel for how different business structures could affect them.

No matter what the outcome of the Farm Bureau lawsuit, people on all sides agree there are other, more pressing issues to be solved within the beef industry - commodities markets dictating cash trade, concerns about regulatory issues and conversations about what it means to raise sustainable beef.

Related Topics: NORTH DAKOTALIVESTOCK
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