APUC awards grant: $61k given for cattle auction study

A new grant will allow several area organizations to study the feasibility of opening a new livestock auction in the region.

The North Dakota Agricultural Product Utilization Commission awarded a grant of $61,000 this past week which will be used to hire a third-party consultant to conduct the study. Organizations involved include the Velva Community Development Corporation and Minot Area Development Corp. The NDSU North Central Research Extension Center is also providing some meeting space and lending its expertise to the project, which was originally spearheaded by dozens of area ranchers who asked Verendrye Electric to help them get the ball rolling. Verendrye did so by organizing an initial meeting and holding it at its Velva headquarters.

Jerry Chavez, president and CEO of MADC, said many different organizations are working together to help turn the idea of opening a new cattle auction facility in the Minot area into a reality.

“I think one thing that’s really good, it’s an effort that’s helped by the state office to look at a viable ag-related business, Velva CDC and Verendrye coming together to meet the interests of their customers and their producers that are in the county, and then MADC to fund an activity that hopefully will see a business into the future,” Chavez said.

MADC will be providing an additional $7,000 in matching funds, bringing the total budget for the cattle auction study to $68,000. The study is needed because the previous auction site in the area, Northern Livestock Auction in Minot, closed its doors in January. Since then ranchers have had to drive long distances to sell their cattle. Currently, the closest auction sites are located in Williston, Rugby and Devils Lake, all of which take over an hour to reach from Minot.

Chavez said the grant will be used for two specific things, the first of which will be the feasibility study.

“We want to identify the market for a sale barn operation, which is just a location to have to auction off cattle,” Chavez said.

He added there seems to be strong support from local ranchers for a cattle auction to continue in the Minot area. The high level of support is evident not only from the well-attended meetings concerning a new cattle auction, but in how well Northern Livestock Auction did before it was forced to shut down after losing its property lease.

“What’s that market relative to cattle and cattle auctions? I think, in particular, the sale barn operation that is no longer in east Minot was a good business. It did bring commerce to Minot,” Chavez said. “If you look at the cattle auction here in Minot, it was seasonal but it was very strong. It had area producers bringing their cattle here.”

The second thing the grant will pay for is the development of a business plan. Chavez said feasibility studies are valuable and provide a lot of information, but for this particular business opportunity he said they need to also produce a business plan, which will provide even more information to potential investors.

“So it’s a two-pronged approach to potentially put in a sale barn operation in the area,” Chavez said.

Although somebody who gets to the point of seriously considering opening an auction barn will undoubtedly conduct their own assessment, Chavez said putting together a business plan beforehand will help them speed up that process.

“And if we are able to find somebody that’s willing to step forward and explore this possibility, a business plan is always the next step. One where it allows somebody to create financing for an operation,” Chavez said. “So once again the effort is trying to streamline the process.”

Once a third-party consultant is hired, Chavez is hopeful the feasibility study and business plan can be completed by this fall.

“That gives us the wintertime to get out there and use this as a tool to develop some interest for somebody to run that type of business or to develop that type of business,” Chavez said. “It gives us the wintertime to not only market that but also design, find the right location and go through the whole development process.”

Chavez said the fall of 2014 is a reasonable time frame to expect a new cattle auction to be up and running by if a suitable owner can be found.

He noted having a cattle auction in the Minot area is not only important to ranchers, but to local businesses as well. Every auction day at the old Northern Livestock Auction brought in people from all over the region who would shop and eat at local establishments while in town. Without a cattle auction, all that income will be lost to some other area, whether it be in state or not.

“What we want to try and safeguard is keeping that commerce at the local level and not potentially having cattle from this area go to support economies outside the state or outside the region,” Chavez said.