FARGO, N.D. -- The supply-demand situation got the North American Bison Cooperative in trouble before, but that doesn't seem to be a problem today.
The bison market demand currently is exceeding supply, even during the recession, says Dieter Pape, president and chief executive officer.
"The consumer has really gotten behind bison, even with the biggest differential between beef and bison prices in the history of the industry," Pape says. "We all believe it's because of the healthful image of the meat."
One private analysis of a bison sirloin steak, for example, showed that it had 30 percent less fat than a skinless chicken breast, while being higher in iron and protein, and lower in cholesterol.
"It's a very, very healthy red meat," he says. "Would you rather have a piece of chicken, or have a piece of steak? I personally prefer a steak."
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On the natural beef side, company officials thought the majority of its demand would be on the retail/grocery level, but they found there's significant demand on the food service side.
Gina Sonaglia of Clearwater, Minn., the company's vice president of marketing since 2008, handles marketing oversees sales for both the beef and bison sides. Sonaglia had helped build Creative Memories, a scrapbook supply company, and other companies. The companies have two salesmen, as well as a customer service worker.
On the bison side, some of the larger customers have accepted new products -- a marinated "value steak," a "cubed steak" geared toward Southeast and Southwest state customers, for use in chicken-fried recipes. There is a new marinated steak tips, among them. Those products are expected to come to the public this fall.
"Chefs tell us it's nice that it's 'natural,' but they're really more concerned about taste," Pape says.
Pape says the company's "never-ever" beef products wins "blind" taste tests 90 percent of the time.
Production limits
Pape says one limiting factor is the ability to recruit new producers, as well as the lenders that must back them.
Last year, the NABC had 90 bison producers who delivered animals to the co-op. All but one was a co-op member. There are some 300 co-op members, but many are out of production or too far from the plant to make delivery economical.
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The National Bison Association as programs that attempt to lure new bison ranchers to the business and encourage interest through the FFA and others.
Pape says he gets frustrated when he hears that ag lenders require such high collateral requirements to lend operating money. Bison gates and fences must be heavy-duty with bison and bison need four times as much feedlot space as cattle.
"The investment is more, but the payout is more," Pape says. "I heard one loan officer say that unless a young person was coming from a family that is willing to give him 1,000 acres, their ability to get into a beef or bison operation is zero. I thought that was a pretty poor statement on how we can build an industry in the state."
On the beef side, the company deals primarily with 10 different feeders today. More than half are in North Dakota, a few are in South Dakota and one is in Minnesota.
Pape is looking to do business with producers who are raising natural beef that fit the company's protocol.
"There is a premium for that, and -- hopefully -- they're able to make a little more raising 'natural' vs. 'conventional' cattle," he says.
It varies by time of year, but generally there is a 10- to 15-cent-per-pound price differential for natural vs. convention-
al.
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Yes, there's extra effort in managing the feedlot to control disease, so that neither medications nor hormones are necessary.
"There are a lot of good feeders in North Dakota that practice good feedlot management and are able to raise natural beef cattle," he says.
While feedlots of all sizes can raise "natural" beef, Pape acknowledges that customers including Whole Foods, among others, are looking to source animals and meat from "mom and pop operations," which fits "extremely well in North Dakota."
