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Opportunities for contract graziers

Tamara Scully Published on 29 May 2015
Panelists Mike Baker, Roy Brubaker, Morgan Hartman, Dave Hardy and Ryan Fibiger .

Contract grazing might be the norm in the western U.S. But in the Northeast, it is an innovative, fledgling concept.

While there are contract-grazing operations, some of which have been operating for decades, this business model is not commonplace in the region, and those entering into contracts to graze livestock are often on their own to fail or succeed without much input or guidance.

Burgeoning support for the contract-grazing industry in the Northeast has come from what may be a surprising source: the craft butchery, farm-direct, grass-fed beef purveyor. With much of the nation’s population and a good portion of its wealth centered in urban areas along the Eastern seaboard, local meat is big business.

Consumers want to know where their meat was raised, how it was raised, and they want it to be from local, small farm producers who raise the meat on pasture.

Ryan Fibiger, head butcher and chief executive officer of Fleisher’s Craft Butchery, brings local farm-to-table meat to the East Coast consumer. He’s looking for consistency of product, quantity and tenderness.

Those three attributes, combined with animals raised to ethical and sustainable farming standards defined by the company, sell the meat. He says, “If we had more product, we could sell it. We can’t find enough product to sell.”

The bottleneck isn’t in the processing or the whole-animal butchering the company adheres to. He needs about 20 beef animals per week, and right now he only sources about a dozen.

Fleisher’s Craft Butchery is looking to purchase livestock to be contract grazed on small farms where “honesty and transparency” in the food chain are a given value.

Contract grazing offers Fleisher’s Craft Butchery the opportunity to partner with farmers. In return for payment, the farmers pasture the animals using a rotational grazing program.

This allows the farmers to use the animals to enhance their soil fertility and pasture health while providing the cattle with nutritious forages, keeping them healthy, gaining weight and ultimately providing high-quality meat.

“We all need to make money to be sustainable,” Fibiger said. “The process has to work for everyone in the supply chain,” and contract grazing allows farmers opportunity without as much investment or risk.

Meg Grzeskiewicz is the custom grazing coordinator for Chaljeri Meats, a grass-fed meat producer and purveyor. In this role, she is responsible for finding graziers to raise livestock for the company. She seeks out graziers both for cow-calf pairs and for stockers.

They are moving toward year-round production for both groups, she says, and looking at innovative feeds such as fodder for winter feeding.

Chaljeri Meats seeks motivated, skilled graziers with infrastructure in place – fencing, watering needs, handling facilities – to properly care for livestock.

They are looking for graziers who understand the pasture ecosystem and soil ecology, and know how to utilize livestock to improve soils while using pasture forages to add gain to their cattle.

One important consideration is “having everyone aligned on goals,” Grzeskiewicz says. “We want to see that you are a good manager. The more turnkey you are, the happier we are going to be with you.”

Eliminating risks

Grzeskiewicz also knows contracts from the other side of the fence. She runs her own contract-grazing company, Rhinestone Cattle Co., and is doing so on leased land. Not only does she find land to lease, she then finds cows to graze it.

She’s learned a few lessons along the way, the most important being that she needs to have “100 percent control over what cattle do on the land.” Grzeskiewicz says neither the landowner nor the cattle owner can control her grazing rotations.

Having contracts that clearly spell out who owns what, who controls what, who pays for what and which services are included by the grazier are crucial to success.

Graziers need to be in constant communication with livestock owners through weekly phone calls. Grzeskiewicz says if something unusual happens, “tell them everything at the time it happens.”

Graziers should keep accurate records on each cow as well as on grazing rotation schedule, supplemental feeds and calving or breeding.

Grzeskiewicz’s unique dual-sided perspective has led her to believe that leasing land and contract grazing is the right way for new farmers to establish profitable operations. She says there is no long-term investment, neither in animals or land, that must be incurred to begin a contract-grazing operation.

Purchasing a new herd carries a lot of risk, and it’s a two-year period from birth to grass-fed processing. A new grazier can avoid that risk via contract grazing as contract grazers don’t have to acquire the capital to purchase livestock.

“That risk belongs to the herd owner,” she said. Other expenses – veterinary costs, feed costs, breeding – also belong to the herd owner.

She does caution that traveling more than 15 minutes to reach grazing land is a “big profit-killer.” Grzeskiewicz recommends an economic analysis before leasing land to gauge “how long until the property gets to top productivity.”

She recommends calculating the return on investment for starting costs and determining the number of animals the land would need to support to make it profitable.

“I can always come out ahead leasing rather than buying,” Grzeskiewicz says. “The more that you cut your input costs, the higher your profit is going to be.”

Commodity markets

Mike Baker, beef extension specialist at Cornell University, says, “Profit is not always the primary driver in whether contract grazing is going to work.”

A cattle owner may need to increase the herd. Instead of purchasing additional land, opting to have additional livestock contract-grazed may be a more feasible alternative.

Likewise, Baker says a feedlot owner may be “looking for gain that’s put on outside the feedlot.” By sending young stock to a contract grazier, the feedlot ensures a regular supply of cattle for its finishing operations without having to purchase mature animals or provide feed to stocker cattle.

Commodity markets may have less intensive labor needs for graziers than direct-sales markets because the grazier won’t have to “maximize gain as you are in a grass-finishing operation,” Baker says. Instead, the gain will be put on when the animals return to the feedlot for finishing.

“We tend to forget the commodity market because there’s a lot of interest in direct sales,” Baker says. “Stocker cattle is probably the best way for a young person to get involved.”

A contract grazier needs to be “content with raising the animals from point A to point B,” Baker says. “If the cattle owner wants something done, you’re going to have to do it. No matter how healthy the cattle are when they come, something’s going to happen,” and the grazier will need to be prepared to administer vaccinations or medications, so a good handling system is necessary.

Baker advises potential contract graziers to identify the market and find out what that market wants in regards to body condition score, gain on pasture and vaccination programs. Different market segments will have varying needs.

According to Troy Bishopp, whose family has been successfully contract-grazing both beef and dairy cows for several decades, contract grazing offers opportunity but also has drawbacks.

“I’m serious about this crop,” Bishopp says, referring to grass. “The cows are just a tool to help grass grow and make money. I get paid to graze.”  FG

For more information on contract grazing, contact Troy Bishopp, Madison County Soil and Water Conservation District Grazing Program. 

Tamara Scully is a freelance writer based in Columbia, New Jersey.

Panelists Mike Baker, Roy Brubaker, Morgan Hartman, Dave Hardy and Ryan Fibiger discuss their experiences with contract graziers. Photo courtesy of Troy Bishopp.