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Help coming for Hawaii and struggling beef market

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press
Saturday, October 6, 2012 - 11:05 am

HONOLULU – Hawaii's beef market is backward. Nearly all the beef eaten here – 95 percent – arrives packaged on container ships from the U.S. mainland. At the same time, Hawaii cattle ranchers ship 40,000 live cattle each year to California, Kansas and other states, while just 4,000 are slaughtered for meat sales in Hawaii.

The economics made sense for decades. Huge slaughterhouses elsewhere could process beef more efficiently than smaller ones in Hawaii, and it's cheaper to send cattle to the mainland to be fattened than to bring in corn or other grains to feed calves after they're weaned.

Now, national interest in locally grown food and grass-fed beef has caught on in Hawaii – offering ranchers plenty of reason to escape this paradox. But the opportunity comes as crushing drought has made it difficult to keep enough cattle here to capitalize on the demand.

Rancher and veterinarian Dr. Tim Richards has been trying for six years to raise more cattle on his family's century-old ranch. He holds back some calves he previously would have sent to Oregon, Texas or elsewhere for final feeding, or “finishing.” But eight years of below-normal rainfall have left little grass for the cattle to eat.

“You put them out, and then it doesn't rain and then instead of growing, they just sort of stand around,” said Richards, the president of Kahua Ranch on the slopes of the Big Island's Kohala volcano.

The cows don't put on enough weight to be taken to market, so Richards winds up shipping them to the mainland anyway to eat corn and other grains before being sent to the slaughterhouse.

“It's very frustrating, because you keep trying, but it keeps getting stopped,” he said.

Ranching in Hawaii dates to the 1830s, when King Kamehameha III asked Mexican vaqueros, or cowboys, to come to the islands to help round up feral cattle descended from those given to the king's family years earlier by the British explorer George Vancouver. The vaqueros taught Hawaiians how to ride horses and lasso animals, giving rise to the distinctive paniolo, or Hawaiian cowboys.

In recent years, high grain and oil prices have made it less affordable to send cattle to the mainland for finishing. At the same time, restaurants and grocery stores in Hawaii have seen more demand for premium local meat that's considered leaner, healthier, better for the environment and tastier.

Restaurants and stores like Foodland Super Market, Hawaii's biggest locally owned grocery retailer, have added local beef to their offerings in the past two years.

But herds have shrunk 20 percent to 30 percent statewide in the past eight years, said Richards, who is also president of the Hawaii Cattlemen's Association. Ranchers have cut back in part because of a multiyear drought covering parts of the islands. This year, the U.S. Department of Agriculture declared drought disasters for all four counties in Hawaii. Kauai became the latest to be declared a drought zone, last week.

Maui Cattle Co., a partnership of several local ranchers who supply grocers, including Whole Foods Market, has been particularly hard hit. The company has been sending 18 animals to market each week, reducing its herd by 60 percent since June 2011. It has let more than half of its employees go and now has only six.

Maui Cattle is in the black, but there's a “very good chance” it will lose money next year, said Alex Franco, the company's managing director.

Help may be on the way.

Ulupono Initiative, a for-profit investment group with a mission to develop more local foods at affordable prices, is paying to test irrigation on pastures on the Big Island. Cattle raised on that property will be compared with animals raised on non-irrigated grass.

The group says the study's purpose is to improve the quality of grass-fed beef more than to respond to drought. Even so, irrigation could help ranchers make it through the dry spell.

Franco said he's anxious to see the outcome of this study, which will be done in May.

“If we had economical irrigated pasture available to us on Maui, our ranchers wouldn't have to ship away their calves. It's important that we really look into the viability of that.”

Maui Cattle also is looking into whether cattle could eat alternative feed that ranchers could get cheaply.