COVER STORY: Industry shepherd: Northwood, N.D., man helps strengthen markets for lamb and wool producers
If you ask former Dakota Lamb Growers Cooperative President Jim Ostlie how he got into raising sheep, he's likely to tell you that it had nothing to do with his upbringing or his education. There just happened to be a good sheep barn on the first...
If you ask former Dakota Lamb Growers Cooperative President Jim Ostlie how he got into raising sheep, he's likely to tell you that it had nothing to do with his upbringing or his education. There just happened to be a good sheep barn on the first farmstead he bought, right after graduating from college.
"The pens inside the barn were lambing jugs -- small pens," he says. "Dairy cattle wouldn't fit in them and all the gates were set up for moving sheep around."
A good fit
He was born and raised on the family farm near the town of Northwood in eastern North Dakota. He is the second oldest of three brothers and a sister.
"We raised dairy cows, beef and swine, once in a while," he says. "But never a sheep."
He attended North Dakota State University in Fargo for six years, earning a master's degree in mechanized agriculture. He took several elective courses on the swine, beef and dairy industries, but never on sheep.
After he graduated in 1971, it was time to get back to farming. He bought a farmstead and 640 acres near the town of Hope, N.D., not far from the family farm.
"The farm was all set up for sheep, so that's the reason I pur- chased sheep . . . when I was back on the farm there," he says.
The fencing was made up of sheep netting and the watering facilities were for sheep-sized smaller animals. Ostlie bought 100 ewes and three rams.
The 640 acres were all cropland, and he farmed full-time, raising wheat and barley and sharing equipment with his dad and his brother.
"You just cannot start farming, coming out of college, without having any machinery," he says. "As the years went, by I added more parts of the machinery to my line."
Eighteen months later, his father-in-law quit farming and moved to Grand Forks, N.D., so Jim and his wife moved onto his farm.
"He milked cows, and so then I took over the milking of his cows for a year," he says. "He wound up having an auction sale, but he didn't want to sell the cows and have the auction in the same year, because it would be more income than he'd want to deal with. He split them up into two years."
Conversions and coyotes
Ostlie converted the dairy operation to handle sheep and moved some of his flock up to the new property, near the house.
"There was really no extra pasture available. I just fenced in the farm yards and used that as the pasture. I like the approach because the sheep really keep the grass trimmed and weeds under control," he says.
In the early 1980s, shepherding in eastern North Dakota became more of a challenge as coyotes migrated out of the west.
"When I first started, I don't think farmers hardly even knew what the word 'coyote' was in the eastern part of the state. And now, coyotes, you can hear them howling at night," he says.
Many producers have had to quit raising sheep because of the coyotes, he says.
"It's just gradually getting worse. You have got to get the right kind of guard dogs, a llama or some type of protection, because coyotes are not very friendly animals to have around," he says.
But Ostlie stayed with it, and eventually joined the Valley Wool Growers Association, based in nearby Page, N.D.
The association had been founded in 1967 to garner better wool prices for 18 area producers by increasing the amount of wool offered for sale. In the group's first year, the producer members increased the income for their 30,000 pounds of wool from 22 cents per pound of wool to 38 cents per pound. Membership grew, and Valley Wool Growers incorporated in 1972. By 1978, the Valley Wool Growers Association had joined forces with other wool associations in the state to further increase their selling power.
In 1996, one of the founding members, Ole Erickson, proposed a lamb processing co-op to help the growers enter new markets and increase their profits. The idea was formally introduced at a board meeting in March. Ostlie, by then president of the association, agreed with his colleagues on approval of a plan to further investigate building or buying their own slaughter facility. With private donations and a grant from the state's Agricultural Products Utilization Commission, a study was conducted by North Dakota State University. The results were disappointing, however. The plant would have to slaughter 20,000 lambs every year -- a number beyond their reach -- just to break even.
So the Valley Wool Growers decided on custom slaughtering at Dakota Country Meats in Jamestown, N.D., and turned its attention to marketing the finished products. In April 1999, the Valley Wool Growers Association met with several lamb producers in Page, and agreed to form a co-op for marketing lamb. The Valley Wool Growers Association was renamed as the Dakota Lamb Growers Cooperative.
Ostlie, already serving as president of the Valley Wool Growers Association, was voted the group's first president.
"The idea was to give farmers $1 per pound for their lamb," he says. "That was a big challenge."
The group has since switched processing plants three times to keep the cost of slaughter and shipping down.
"The places we go to, they are already sending lambs from themselves or some other group, and we just piggyback on the truck. That helps keep the net profit higher," he says.
The organization now has more than 200 members in North Dakota, South Dakota, Minnesota and Montana. Ostlie attributes much of the group's success to being able to supply the market throughout the year, not just after spring lambing.
"The co-op needs the farmers to do fall lambing, because if you're selling a product on the market nationwide, they want lambs every week of every month for the whole year. To do that, somebody has to be lambing out of season."
The members in western North Dakota and Montana lamb a little later than most, helping to spread out the supply.
"They like to keep their lambs with their ewes on pasture longer so their rate of gain isn't as fast," he says.
Combined with the regular lambings in South Dakota, Minnesota and eastern North Dakota, these late arrivals help the cooperative maintain supply year around.
"This is what makes an organization successful," he says. "It's a tremendous asset to have."
The co-op also is the only one to market just natural lamb, eschewing antibiotics, hormones and implants.
"There'd be no way we could compete in an open market, trying to sell conventional lambs," he says. "You gotta have something a little unique and different."
That difference amounts to approximately $20 to $25 additional price per lamb.
The success of the organization speaks to the value of their tactics.
"We're actually giving out dividends ourselves, now," Ostlie says. "We've got a lot of bills to pay, yet, but that's a different story.
In 2007, DLGA delivered 11,692 head of lamb at an average of $141 per head. In 2008, they delivered 17,623, a 51 percent increase, at $151 per head.
Looking ahead, Ostlie wants to be sure the Dakota Lamb Growers Cooperative can continue to be competitive.
"When new markets are found, then we just have to keep making sure that we have producers that can deliver," he says. "We've got to get more growers to lamb in the fall. We need multiple dates of birth to keep the whole system working."