APUC to consider grant for cattle auction study

When Northern Livestock Auction closed in January because Burlington Northern Santa Fe Railway wanted to use the land, which it owns and leased to the auction, to build three new sets of tracks, Minot and the surrounding region were left without a cattle auction for the first time since the early 1950s.

A group of ranchers and business organizations is hoping to change that.

The Velva Community Development Corporation and Minot Area Development Corporation, together with dozens of local ranchers, have asked the North Dakota Agricultural Products Utilization Commission for a grant in the amount of $61,000 to defray the costs of a project that will develop a business plan and study the feasibility of opening a new livestock auction in the area.

Randy Hauck, who is member services manager and assistant manager of Verendrye Electric in Velva, as well as chairman of VCDC, said it all started when a group of local ranchers asked Verendrye to help get the ball rolling on a new cattle auction for the area.

“After (Northern Livestock Auction) closed, we had several ranchers and farmers in the Velva, Drake, McHenry County area contact Verendrye Electric (to ask about) getting some of our customers together to visit about building a new livestock auction,” Hauck said. “So Velva Community Development Corporation and Verendrye jointly held a meeting.”

The meeting was on Feb. 28, and around 70 people showed up. During the meeting they looked at where livestock auctions currently are in North Dakota. Of the 12 auctions left in business, nine are on or south of Interstate 94, which is in southern North Dakota and runs east-west through Dickinson, Bismarck, Jamestown and Fargo. The only three above I-94 are in Williston, Rugby and Devils Lake.

While the southern part of the state is where most of the cattle are, statistics from the United States Department of Agriculture indicate there are more than enough cattle in north-central North Dakota to warrant an auction in this region.

“You print out a livestock map and there’s still a large amount of cattle in the McHenry County area. McHenry County is the second-highest cattle county in the state behind Dunn County,” Hauck said. “So we think when you look at where the cattle are and you look at the livestock on the map, you know you’ve got this hole in the middle of the state. There should be an auction yard someplace in the middle of the state for those cattle to go to.”

Roger Sundsbak, who had owned Northern Livestock Auction along with George Bitz, was at the meeting but said they were not interested in starting up a new auction because of how close to retirement they both are. If a new auction were to start up, it would most likely be with a younger entrepreneur looking to build up the business well into the future, according to Hauck.

The overwhelming consensus of the group was that there should be a new livestock auction in the area, so a committee was formed to further study the idea. The committee met with MADC and some other people who are involved in livestock auctions in different parts of the state.

“And the goal of the committee was to … prove that this was still feasible in this area. So that’s where APUC came in,” Hauck said. “So we sent an application into APUC asking for funds to fund a feasibility study and business plan for the project.”

APUC will hear presentations for grant requests at its quarterly meeting May 15 in Fargo.

Hauck said North Dakota State University estimated the study would cost around $68,500. If they get the $61,000 grant from APUC, the remaining $7,500 would come from local sources.

While nothing is certain, Hauck is hopeful they have a strong enough case to warrant the grant. He noted before it closed, Northern Livestock Auction was the fourth-largest cattle auction in the state, handling around 50,000 head per year.

“The wildcard is what a new facility costs with the current environmental requirements and the current construction costs. Will 50,000 head cash flow a new facility?” Hauck said. “That’s what we’re hoping we can find out by doing a feasibility study and a business plan.”

John Dhuyvetter, area extension specialist/livestock systems for the NDSU North Central Research Extension Center south of Minot, said while the Minot region doesn’t have the cattle density of southern North Dakota, it does have a large coverage area in northwest and north-central North Dakota, which of course includes McHenry County.

“Even though cattle might not be the dominant agriculture in Bottineau, Renville, Burke, Mountrail, Ward and those other counties, livestock producers in those areas were well served by having a local market for them to access,” Dhuyvetter said. “So I think anytime a market can serve that many annual sales in that big of an area, to have it go away means something is going to change. There’s going to be some impacts.”

While cattle producers both large and small were affected by the closure of Northern Livestock, it wasn’t just ranchers who were impacted. Dhuyvetter said some new feedlots have been built in the area and they will be affected, as well.

Perhaps the most affected aren’t the large ranchers, but the smaller, part-time ones who must decide whether a two-hour trip to sell their cattle is worth it.

“They might find the obstacles of transporting smaller numbers further distances not economical and they may, to some degree, exit the business. The larger operations will find markets and trucking, moving their cattle to (other auctions),” Dhuyvetter said. “Feedlot guys who probably used to access some of their cattle that they put in their lots through the Minot auction will just have to go source them in Williston, Bismarck, Dickinson, Napoleon, wherever they can find those cattle. But certainly there’s going to be an extra cost in freight to move them here versus cattle that are more locally available.”

Because many farmers and others who do some part-time ranching on the side might find having to travel such long distances to sell their cattle too big an expense, Dhuyvetter said there will probably be some shrinkage of cattle numbers in the area if a new auction isn’t established.

Local feed companies and equipment dealers would then lose out on the business from those smaller ranchers who decide to call it quits. The hit to Minot’s economy in terms of lost business for restaurants and shopping centers because there are no longer weekly sales drawing people from all over the region must also be taken into account.

Any way you look at it, a lot of people miss having a livestock auction in Minot.

“It would be a loss to the Minot community trade center not to have something come back in the place of Northern Livestock Auction,” Dhuyvetter said.