FEASIBILITY OF OPERATING A LAMB SLAUGHTER PLANT IN NORTH DAKOTA

A group of North Dakota lamb producers who are members of Valley Wool Growers Association identified several niche markets for high quality North Dakota lambs. The potential availability of a closed, but formerly federally inspected, livestock slaughter and meat processing facility in Steele County heightened their interest in determining the feasibility of a cooperatively owned lamb slaughter and processing facility. The cooperative would be patterned after existing and proposed slaughter cooperatives, whereby cooperative members would own shares to supply lambs to the plant on a year-round basis. The analysis was conducted in several sections corresponding to critical factors which affect feasibility of the plant. The critical factors analyzed included federal inspection requirements, the potential of an adequate supply of lambs, the potential for a viable niche market, plant investment and operating costs, expected return, alternative lamb purchase prices, alternative lamb carcass sales prices, and several investment and expense scenarios. The building and equipment investment was projected to be $1,468,000, which was higher than originally expected due to the extensive refurbishing necessary to meet federal inspection and increased capacity requirements. Plant operating expenses at full capacity were projected to be$3,013,877 per year which included $673,877 in operating expenses and$2,340,000 for lamb purchase. Income from lamb meat sales and pelts was estimated at $2,800,000 per year. The assumptions of purchasing 20,000 lambs per year for$0.90 per pound and selling for $2 per carcass pound resulted in an annual negative margin of$213,877 at full capacity. Therefore, other scenarios were investigated which would enable the plant to operate profitably. The maximum price that could be paid for lambs to pay all investment and operating costs, including a 7.5 percent return to member equity, was $0.8004 per pound. A 25 percent increase in projected costs would reduce the purchase price to$0.7358, or a reduction in the lamb carcass sales price to $1.80 per pound would reduce the lamb purchase price to$0.7004. The range in probable prices that could be paid for lambs is $0.70 to$0.80 per pound with a likely price of $0.75. The proposers of the cooperative will need to decide if prices in this range would be sufficient to lure enough member investors to provide the 20,000 lambs necessary to operate the plant.lambs, slaughter, processing, niche market, lamb prices, lamb carcass prices, feasibility, cooperative, federal meat inspection, plant operating expenses, Agribusiness,

ECONOMIC ANALYSIS OF CONTROLLING LEAFY SPURGE WITH SHEEP

Leafy spurge (Euphorbia esula L.), a widely established exotic, noxious, perennial weed, is a major threat to rangeland and wildland in the Upper Great Plains. Chemical, biological, and cultural control methods have limitations in their applicability and effectiveness in treating leafy spurge. However, many of the constraints prohibiting the use of herbicides, tillage, and biological controls do not apply to sheep grazing. Sheep grazing, while known to be effective in controlling leafy spurge since the 1930s, has lacked widespread adoption as a leafy spurge control. A deterministic, bioeconomic model, incorporating relationships between sheep grazing and leafy spurge control, grass recovery, and forage use by cattle, was developed to evaluate the economic viability of using sheep to control leafy spurge. Discounted annual control costs were compared to discounted annual control benefits over 5-year, 10-year, and 15-year periods. Various scenarios were developed depicting likely situations involving adopting a sheep enterprise or leasing sheep for leafy spurge control. Situational factors considered included fencing expenses, debt considerations, grazing values, infestation size, infestation canopy cover, rangeland productivity, and flock performance. Two levels of flock profitability, one based on a level of proficiency achieved by sheep ranches and one substantially lower than typically achieved in the sheep industry, represented best-case and worst-case situations, respectively. In the best-case situations, using sheep to control leafy spurge was economical in all of the control scenarios examined. However, in the worst-case situations, economics of using sheep to control leafy spurge were mixed across the scenarios examined. Leafy spurge control with poor sheep management, high fence expense, and unproductive rangeland generally was not economical. However, situations with low fencing costs, moderately productive rangeland, and poor sheep management resulted in less economic loss than no treatment. Although many of the key relationships tying leafy spurge control to grazing benefits remain unquantified, the economics of sheep grazing were positive across many of the scenarios evaluated in this study. Actual returns from leafy spurge control for most ranchers will likely fall between the two extremes examined. As a precaution, careful evaluation using site- and rancher-specific inputs would be recommended before implementing sheep grazing as a leafy spurge control method.Leafy Spurge, Weed Control, Sheep Grazing, Economics, Farm Management, Resource /Energy Economics and Policy,

Potential Economic Effects of Post-CRP Land Management in Southwest North Dakota

The uncertain future of the Conservation Reserve Program has created substantial interest for agricultural producers, rural businesses, community leaders, sportsmen, and wildlife organizations. Many regions of the upper Great Plains have participated heavily in the CRP as evidenced by program acreage reaching land enrollment limits; however, current enrollment and re-enrollment criterion are expected to substantially reduce CRP acreage in many parts of the Great Plains. The divergence of interests between pursing post-CRP lands for agricultural production versus retaining the wildlife habitat and wildlife populations supported on CRP lands presents land owners and agricultural producers with important land management decisions over the next several years. This research examines the regional economic implications of post-CRP land use among traditional agricultural uses, wildlife production, and multiple-use practices. Of particular interest is whether multiple-use management on post-CRP lands can produce similar returns to landowners and producers as traditional land uses, and determine the effects of multiple-use management on post-CRP lands on regional economic output. A multiple-use system implemented on post-CRP lands based primarily on beef grazing while producing corn and barley for forage and retaining a portion of acreage in dedicated wildlife habitat would not compete economically with other conventional land uses. The net change in gross receipts within the regional economy from agricultural uses of post-CRP lands exceeded lost recreational expenditures in all scenarios evaluated.North Dakota, Conservation Reserve Program, Recreation, Agriculture, Land Management, Environmental Economics and Policy, Land Economics/Use,

PERCEPTIONS OF LEAFY SPURGE BY PUBLIC LAND MANAGERS, LOCAL DECISION MAKERS, AND RANCH OPERATORS

A survey of 459 ranchers, 56 local decision makers, and 50 public land managers (565 total) was conducted to evaluate managerial, institutional, and social factors that may affect the rate and extent of implementation of various leafy spurge (Euphorbia esula L.) controls. The study focused on a five-county region in Montana, North Dakota, South Dakota, and Wyoming. The questionnaire focused on weed management in general and specifically on the perceptions and attitudes of ranchers, land managers, and local decision makers who have been directly and indirectly affected by leafy spurge.leafy spurge, weed management, rancher opinion, public land manager opinions., Farm Management, Resource /Energy Economics and Policy,

RANCH OPERATORS' PERCEPTIONS OF LEAFY SPURGE

A survey of 459 ranchers was conducted to evaluate managerial, institutional, and social factors that may affect the rate and extent of implementation of various leafy spurge (Euphorbia esula L.) controls in a five-county region in Montana, North Dakota, South Dakota, and Wyoming. Ranchers returned 187 questionnaires. Weeds were considered a greater problem for ranchers with leafy spurge than for those without leafy spurge; however, even among ranchers with leafy spurge, there was strong agreement that other ranching issues were of greater concern. Over 65 percent of the respondents indicated that weeds on their ranch were a `minor problem.' Leafy spurge was ranked as the most important weed. Nearly 60 percent of ranchers felt that using herbicides, biological agents, and grazing animals on leafy spurge were economical; however, only 25 percent of ranchers with leafy spurge felt those controls were `very effective.' A majority of ranchers with leafy spurge indicated plans to treat their infestations with herbicides and biological agents in the future. Reasons for not using various leafy spurge controls fell into environmental, educational, and financial categories. Ranchers depend heavily on their county extension agents and local weed control officers for information on weed control. Information on the effectiveness and economics of various controls was most requested by ranchers. The responses of ranchers to various statements on weed and range management indicated that ranchers, as a group, are generally very concerned about weeds in rangeland. Respondents generally felt it makes economic sense to control weeds in rangeland, and felt very strongly that not enough was being done to control weeds on public land. Ranchers realize the difficulty in controlling leafy spurge, but indicated they are still planning on fighting the weed in the future. Financial and educational constraints to adopting and using leafy spurge controls could be abated through university and governmental educational programs and through cost-share or other financial assistance.leafy spurge, control, rancher opinion, Farm Management, Resource /Energy Economics and Policy,

FEASIBILITY OF A SHEEP COOPERATIVE FOR GRAZING LEAFY SPURGE

This report presents an economic feasibility study of a 5,000 head, cooperatively owned, sheep operation for leafy spurge control. The objectives were 1) determine the return on investment of the cooperative, 2) determine the proposed structure of the cooperative, and 3) ascertain the amount of capital investment required by members in the cooperative. Three sheep flock management alternatives were initially considered for the cooperative. These were 1) winter lambing, 2) spring lambing, and 3) fall lambing. The fall lambing scenario was determined to be infeasible because of logistics associated with gathering and transportation of pregnant ewes and lack of grazing pressure on leafy spurge throughout the grazing season. The total capital investment per ewe for the winter lambing scenario was more than the spring lambing scenario - - $301 and$216, respectively. The expected net income generated by the winter lambing scenario was negative. The minimum break-even lamb selling price or lambs sold per ewe for the winter lambing scenario was $84.10/cwt and 1.33, respectively. The spring lambing scenario returned$124,000 annually. The minimum breakeven lamb selling price or lambs sold per ewe for the spring lambing scenario was $59.51/cwt and 0.94, respectively. The expected return on investment (50% equity) for cooperative members with the spring lambing scenario, assuming a 50-acre leafy spurge infestation in a 100-acre pasture and new fence, was 16 percent (stocking rate of 1 ewe and lambs per acre of leafy spurge). While these returns are not a guarantee of success for the spring lambing alternative, they do provide an indication of the potential that such a cooperative may have.Leafy Spurge, Cooperative, Weed Control, Sheep Grazing, Economics, Farm Management, Resource /Energy Economics and Policy, Agribusiness,

Northern Great Plains Beef Production: Production and Marketing Practices of Cow-Calf Producers

Ruminant livestock production in North Dakota, South Dakota, Montana, and Wyoming is critical to the region's economy. Because of the economic significance of ruminant livestock production, producers in the four-state area are continually looking for opportunities to increase income and improve the viability of their farm and ranch operation. Accordingly, the Four-state Ruminant Consortium, an integrated research and extension program, was created to specifically address issues related to ruminant livestock production. One of the more widely applicable possibilities for adding value through the regions's ruminant livestock sector appears to be backgrounding feeder calves. However, while economic analysis has indicated that stockgrowers in the study area could typically increase their net returns by backgrounding feeder calves, anecdotal evidence suggests relatively few producers are presently backgrounding feeder calves. To identify the socioeconomic impediments inhibiting producers from backgrounding feeder cattle, this study sought to identify managerial, social, and institutional factors that influence and perhaps constrain producers' ability or willingness to background feeder cattle. Study objectives were to identify and document producers' current production and marketing practices as well as identify stock growers' perception of opportunities for and impediments to expansion of the ruminant livestock industry in the study area. A mail questionnaire was delivered to 5,270 livestock producers in 37 counties in the 4-state study area of southwestern North Dakota, northwestern South Dakota, southwestern Montana and northwestern Wyoming. The questionnaire was designed to solicit a wide variety of information about operators' current production practices, including marketing, backgrounding, retained ownership, herd management, and feed and forage practices. The questionnaire also solicited operators attitudes on a wide variety of issues related to opportunities for and impediments to the expansion of the ruminant livestock industry in the study area as well asking respondents to identify what types of information would be of most interest to them and in what form they would prefer that information be delivered. The questionnaire also collected basic demographic data. Findings from the mail questionnaire are detailed in this report.Backgrounding, Feeder calves, Beef cattle producer characteristics, Feeder cattle production practices, Beef cattle marketing, Livestock Production/Industries, Marketing,

A PRELIMINARY FEASIBILITY FOR ESTABLISHING A MULTI-SPECIES MEAT PROCESSING PLANT IN SOUTHWESTERN NORTH DAKOTA

The number of small commodity livestock slaughter plants in the Upper Northern Plains region continues to decline. Significant factors contributing to this decline include: 1) pressure to consolidate, thereby capturing economies of scale; 2) relatively stringent federal inspection specifications, along with; 3) HACCP (Hazardous Analysis Critical Control Points) requirements. At the same time, consumer demand (markets) for specialty, selected, and exotic meats appears to be growing. For example, the recent market successes in Europe evidenced by the North American Bison Cooperative based in New Rockford, North Dakota. Several alternative livestock producer groups have emerged which include lamb, ratite, elk, deer, goat, poultry, rabbit, specialty beef, and organic livestock. These groups have expressed a need for slaughter and processing facilities to meet market demand. The economic question which then becomes foremost to developing a viable business enterprise is: "What is the critical threshold volume (CTV) of product required to succeed in terms of economic profit?" Specialty livestock is relatively new and production volume small in comparison to established commodity livestock such as cattle or hogs. This fact led researchers to consider the preliminary feasibility of a multi-species processing facility as a means of addressing the expressed need.multi-species, specialty meats, specialty livestock, alternative livestock, economies of scale, HACCP (Hazardous Analysis Critical Control Points), slaughter plants, processing plants, Community/Rural/Urban Development, Agribusiness,