Shipping live calves from Hawaii is twice as big a trade as shipping pigs to Hawaii
From ANIMAL PEOPLE, October 2011:
HONOLULU–The Hawaiian live calf export trade may have become the world’s largest seagoing trade in calves almost without notice. Though most of the calves move through U.S. and Canadian west coast container ports almost under the windows of major animal advocacy groups, there appears to have never been an undercover investigation of the trade, never a protest, never a lawsuit, and never a mailing.
By contrast, the most comparable live export trade, the shipment of 300,000 to 400,000 calves per year from Britain to be raised as crated veal in The Netherlands and Belgium in the early 1990s, produced the Battle of Brightlingsea, as the British newspaper The Independent dubbed it. Protesters and livestock transporters fought almost nightly from January 1995 until the end of October 1995, when the transport routes were changed.
Demonstrator, Jill Phipps, 31, was crushed by a cattle truck in February 1995.
The Brightlingsea furor faded after British calf exports were suspended in February 1996, due to concern about spreading “mad cow disease.” Live calf exports from Britain resumed in 2006, but since shipping 76,000 calves in 2007, the British trade has dropped back to the current Hawaiian volume of about 61,000 calves shipped per year.
Beef ranching, 20 years ago, appeared to be almost history in Hawaii. About 750 farmers sold cattle for slaughter, but as University of Hawaii at Manoa agricultural economist Linda J. Cox observed in a 2006 paper, “Since 1986, Hawaii’s market share of the local beef market has decreased from about 30% to less than 10%. Hawaii cannot compete,” against beef imports from the U.S. mainland, “because of the high cost of inputs here,” Cox wrote. But by the time Cox assessed the post-1986 transition of the industry, it was already well underway.
“Hawaii’s medium-and small-scale cattle ranchers were nearly jolted out of their boots in 1991 when they heard that Parker Ranch–the state’s cattle-producing giant– would no longer be feeding and slaughtering livestock in Hawaii,” recalled the USDA publication Farmer Cooperatives in March 1995. “Instead, Parker would export live calves to the mainland for fattening and slaughter. Parker Ranch so dominated the cattle market in Hawaii,” Farmer Cooperatives noted, “that even the state’s smaller cattle producers depended on its infrastructure, which included a 15,000-head feedlot and associated packing plant. With 20,000 brood cows, Parker is the third largest producer in the United States,” Farmer Cooperatives added.
And Parker Ranch has grown since then. The ranch was founded in 1847 by John Parker Palmer, who jumped ship in Hawaii in 1809 and eventually won favor with King Kamehameha I by shooting feral cattle with a musket. This activity continues at Parker Ranch today, which has become the biggest hunting ranch in Hawaii as well as the biggest cattle ranch. For $3,500, visitors may participate in a two-day “Big Island Grand Slam Hunt,” which includes shooting a cow, a goat, and a wild pig. But cow-shooting is little more than a sideline for Parker Ranch compared to selling cattle under the Ranchers Renaissance brand, marketed in partnership with Cargill Inc. through mainland supermarkets including the Kroger chain. Parker Ranch now produces 30,000 to 35,000 cattle per year–just over half of all Hawaiian cattle production, according to current USDA data.
But most cattle born at Parker Ranch are not actually raised in Hawaii, as consumers tend to believe. Since 2001, most Parker Ranch calves have been quickly weaned and shipped to the mainland. “The [Oahu] feedlot was closed [20 years ago] for a couple of key reasons,” explained Colleen Schreiber of Livestock Weekly. “One primary reason was that it is extremely expensive to feed cattle on the islands. It’s no secret that it makes more sense to take the cattle to the grain rather than the grain to the cattle.”
Could breeding calves in Hawaii for shipment to the U.S. mainland be profitable?
“A few mainland cattle buyers had long realized the opportunity available to them with the typically lightweight Hawaiian cattle and had been taking advantage of shipping Hawaiian calves over the ocean for several years,” Schreiber said.
After 1991 the commerce expanded.
“There are three ways to ship livestock from the Islands to the mainland: by ship, which ranchers refer to as a ‘floating feedyard,’ by ‘cowtainers,’ or on a 747 airplane,” Schreiber summarized. “For Parker, renting a 300-foot ship strictly for carrying livestock is the preferred method. The boat can carry roughly 3,300 calves at a time. The ship is four decks high and each pen holds 15 to 20 head. The journey by boat takes nine days,” taking the calves to port in British Columbia, for relay to U.S. destinations by truck and train. A more direct route is not possible because of the Merchant Marine Act of 1920, also called the Jones Act, which forbids the use of foreign-built vessels on journeys between U.S. ports. As there are no U.S.-built cattle transporting vessels, Parker rents vessels built in either Denmark or Belgium.
“The boat is cheaper than sending the animals in containers,” Schreiber said, and Parker is able to move more calves at a time by transporter than in containers.
“The other advantage the floating feedyard offers,” Schreiber wrote, “is that sick cattle can be isolated and treated if necessary. That’s simply not feasible when the animals are shipped in containers.”
Parker Ranch vice president of livestock operations Michael Bryan told Schreiber that calves typically lose up to 3% of their weight in transit.
Other Hawaiian ranchers do not raise enough calves at a time to fill a transport vessel. The Hawaii Cattle Producers Cooperative Association, formed in 1984, responded to the Oahu slaughterhouse closure, Farmer Cooperatives recalled, “by purchasing eight 40-foot-long steel shipping containers which it retrofitted into ‘cowtainers’ capable of being loaded onto container ships. Each was customized for housing livestock,” with “ventilated windows and self-filling feed and water troughs. Total holding capacity of the coop’s eight cow-tainers was 550 head. Cattle had enough room to turn around and walk about inside,” Farmer Cooperatives said.
But according to Schreiber, each deck of the double-decked ‘cowtainers’ is only 52 inches high, obliging ranchers to ship calves before they reach that height. About 7,500 calves were exported in 1995; by 2000 the HCPCA shipped 15,000.
Altogether, wrote Jason Gerke for www.CattleNetwork in 2001, “Beef producers on the islands of Hawaii ship approximately 60,000 to 70,000 calves to the mainland to be backgrounded and finished each year.”
“Calves are loaded onto a barge at the port in Kawaihae,” Schreiber wrote. “A tug pulls the barge to Honolulu, an 18-hour journey. On arrival they’re off-loaded and put on feed and water for a day and a half. From there the livestock are transferred to the ship for the journey to the mainland. The journey from Honolulu to [container ports on] the California coast takes four and a half days.
“Inter-island containers are not equipped with food and watering facilities,” Schreiber explained, “but the long-line ship containers are. Pollution laws, however, prohibit washing out the containers when the boat gets within 200 miles of the California coast. Therefore, for that last 200-mile stretch, cattle are not fed or watered.”
Calves shipped in containers typically lose up to 5% of their weight in transit, Kahua Ranch co-owner Tim Richards told Schreiber. “In real rough seas, if the cattle get seasick, shrink can be as high as nine percent,” Richards acknowledged.
HCPCA general manager Lani Cran Petrie predicted to Farmer Cooperatives in 1995 that “Transportation is in transition and will look very different three to four years from now. We won’t continue to ship cattle in cow-tainers.” But cow-tainers are still the most commonly used shipping method.
Flying calves to California, about 100 at a time, takes only five hours, plus the time needed to barge them to Oahu, but multiple flights are necessary to move as many calves as would typically be transported on either a “floating feedlot” or a container ship.
By any transport method, “Two to three percent death loss isn’t unheard of,” Schreiber wrote, “but most times, no matter the method, death loss is well under a quarter of one percent. Even when the cattle reach California, their journey is seldom over,” Scheiber continued, since “Hawaiian ranchers have grazing leases all over the country. Many [Hawaii-born calves] end up in Texas.”
“The primary feedyard locations Hawaiian producers now use are in the Pacific Northwest, such as Oregon or Idaho,” Tim Richards told Gerke, but others go to “Corn Belt locations such as Kansas, Nebraska and Texas,” Richards acknowledged.
Shipping Hawaii-born calves to the U.S. for finishing and slaughter proved economically viable, but Hawaiian ranchers were still at a competitive disadvantage against mainland producers, because of the expense of ocean transport.
Whole Foods Markets
But Linda Cox–with the help of Whole Foods Markets–in 2003 directed Hawaiian producer attention to the possibility of grabbing a big share of the high-end natural and organic beef market. Whole Foods Markets research furnished most of the substance of The Market for Hawaii-Grown Natural and Organic Beef, a marketing analysis Cox produced for the University of Hawaii at Manoa Cooperative Extension Service. The analysis was distributed to Hawaiian ranchers in September 2003.
“The average annual growth rate for the sale of organic products from 1998 to 2001 was 24.1 percent,” Cox noted. “The Hawaii beef industry may conclude that this is a growing market. Sixty-three percent of consumers in 2001 were buying organic and natural products at mainstream grocery stores,” Cox continued, “compared with 56% in 1999,” according to Whole Foods Markets data.
“This trend,” Cox continued, “has led to the development of major food chains that specialize in natural and organic foods. For example, Whole Foods Markets, founded in 1980 in Texas, is now the largest retailer of natural and organic foods in the world.”
Cox acknowledged that some farmers had been raising natural and organic beef for local consumption since 1992, but pointed out that these producers had priced their meat to be as competitive as possible with imports from the mainland and New Zealand, instead of seeking a high-priced market niche.
Based on survey data obtained from 50 stores retailing natural beef on the mainland during the summer of 2003, Cox reported that, “Fifty-seven percent of store managers said that Hawaii beef could be sold at a higher price than their local beef, given identical quality.” Another 36% were undecided.
“Given the success of private beef brands such as Oregon Country Beef, a targeted production-marketing strategy can be an effective means of selling beef,” Cox concluded. Oregon Country Beef, founded in 1984 as a 14-ranch marketing consortium, had grown by 2003 to include more than 70 ranches, in half a dozen western states, and now includes more than 120 ranches from 13 states.
Barely three months after Cox helped to introduce the major players, the Hawaii Cattle Producers Cooperative Associ-ation in early 2004 contracted to sell 2,700 cattle to the company formerly known as Oregon Country Beef. The HCPCA now promotes itself as Hawaii Ranchers, while Oregon Country Beef became Country Natural Beef, believed to be the largest Whole Foods Markets beef supplier.
Country Natural Beef executive director Dan Probert is on the board of directors of the Global Animal Partnership five-step livestock certification scheme introduced by Whole Foods Markets in November 2010, and Country Natural Beef is listed as a Step Five (top level) GAP-certified producer. As GAP limits cattle transport to 16 hours, and Step Five limits transport to eight hours, Hawaii-born calves in the GAP program would have to be flown to the mainland.
Hawaii Ranchers now sells about 10,000 cattle per year to County Natural Beef –about 25% of all Country Natural Beef production. But the biggest Country Natural Beef supplier in Hawaii has become Parker Ranch.
Far more cattle were raised to slaughter weight in Hawaii before the recent growth of natural and organic market. In 2004, when Hawaii Ranchers first sold cattle to County Natural Beef, 9,000 cattle of more than 500 pounds and 34,000 calves were shipped alive to the mainland, according to USDA data. By 2008, the live traffic included only 2,000 cattle of more than 500 pounds, plus 41,000 calves. Over the five years 2004-2008, calves accounted for slightly more than 90% of all live cattle shipments from Hawaii.