McCandless Ranch on the Big Island has faced plenty of change in its more than 100 years of operation. Its 66,000 acres have been divided up, its cattle herded from the hills to the coast and its animals — once born, grown and slaughtered in Hawaii — have become part of a cow-calf operation.

Hawaii Grown

Such cow-calf operations became the norm in Hawaii as ranchers responded to a dearth of slaughterhouses and an absence of feed mills to sustain their animals. In such operations, herds are kept at a relatively fixed number of cows to produce calves that are sold to mainland operations when the animals are about 10 months old.

Cattle are Hawaii’s third most valuable agricultural commodity, worth about $44.8 million in 2017, though a history of having to respond to the whims of greater market forces has forced ranchers to constantly adapt to new changes in the supply chain. And for the past 30 years, cow-calf operations have been the best way for ranchers to make a living.

But recent private investments and potential government funding have led to an increasing number of farmers looking to fill a comparatively niche, premium market for grass-fed beef.

Kualoa Ranch raises mostly angus beef, fed entirely on grass, one of the few operations in Hawaii to do so. Ku'u Kauanoe/Civil Beat/2021

McCandless Ranch, in Captain Cook on the Big Island, is one of those ranches. Owner Keith Unger has 200 cows whose calves end up on the mainland before entering the beef market. But in 2020, he sold 20 grass-fed animals to another grass-fed operation on the island, which will eventually be harvested in Hawaii, and he is currently raising 15 more.

The U.S. market for grass-fed beef was about $4 billion in 2017, just 4% of the national beef market, but more recent market analyses forecast a global $9.53 billion increase in value by 2025.

Unger is taking it year by year, but says it could get to a point where he starts cutting back on his cow-calf herd to make room for more grass-fed and castrated male cattle, also known as steers.

The move is a big step for McCandless Ranch, he says, but it could be a viable option for them in the future. And Unger says he wants to be delivering Hawaii beef to Hawaii because it makes sense to him.

Cowboycast

“We take pride in the animal we raise. We think it’s on par with anything that is raised on the mainland,” Unger said. “We’re exploring ways on how we can adjust our operation to keep more here, to finish more here to help supply the needs (of) the local market.”

Unger is not alone. About 84% of ranchers want to increase the amount of beef sold locally, according to a Department of Agriculture-funded Hawaii Cattlemen’s Council report. Their motivations: better money, access to the local market and serving the community.

Local Harvest

In 2019-2020, Idaho billionaire Frank VanderSloot assumed the leases for and purchased the slaughterhouses on Oahu near Kapolei and on the Big Island in Paauilo, which together account for 70% of the state’s animal harvest capacity. VanderSloot, founder of wellness company Melaleuca, recently completed upgrades to the Oahu operation and work on the Big Island facility is underway.

Vandersloot says he initially just invested in Oahu’s Kunoa plant but eventually took over the operation because it was “losing money hand over fist,” while the Big Island abattoir’s owner was looking to retire.

Frank VanderSloot, founder and CEO of health brand Melaleuca, is the billionaire who bought Hawaii’s two biggest slaughterhouses. He’s seen here on his Idaho Falls ranch with his dog Vivi. Courtesy: Steve Smead/Melaleuca

Slaughter capacity is up 20% on Oahu and both operations are expected to be able to produce twice as much as before, once fully operational. That means about 30,000 cattle could be processed annually, which accounts for approximately 30% of the state’s herd, he says.

“The problem is 80% of all the cows’ calves that are born in Hawaii get sent to the mainland,” VanderSloot said. “And then, in return, Hawaii purchases 90% of the beef that’s consumed on the island (from the mainland).”

But controversy followed his acquisition of the slaughterhouses, reaching the 2021 legislative session as a bill targeting anti-competitive practices in the meat harvesting and processing industry. The brunt of the opposition came from Parker Ranch, which VanderSloot says is his biggest customer, who feared there would be too much control over beef pricing and marketing. Several industry organizations supported the bill, while many smaller ranchers did not, and the bill was killed.

Since the bill’s failure, the cattle industry has tempered its own fears and is just waiting and hoping that VanderSloot will be good on his word, according to Hawaii Cattlemen’s Council Executive Director Nicole Galase.

“One of the things that we try to make sure of is that our producers are able to market the way that they’d like to,” Galase said. “Whether that’s selling at the gate and relinquishing ownership or whether it’s producing their own label.”

But inordinate power dynamics in the livestock industry have weighed overwhelmingly in favor of larger harvesting and processing outfits, and middlemen, something that has been targeted as part of a hefty American Rescue Plan from the Biden-Harris administration.

The industry was a “textbook example” of what a lack of competition did to ranchers, consumers and the economy, according to a White House statement on Monday.

This was a concern across the board for those supporting Hawaii’s harvesting facility bill from 2021.

“Ranchers don’t have much say in setting the price, and the processor has always had more control over that,” Galase said. “The producer doesn’t get much of the cut when prices have increased.” 

No matter where they are located in Hawaii, ranchers have to adapt their operations to diverse conditions. Courtesy: Forest & Kim Starr/Wikimedia Commons

Independent processors would be able to access $1 billion in American Rescue Plan funding, though VanderSloot says he’s not interested in the money.

“We’ve always done things ourselves and I think we can make it viable,” VanderSloot said. “I mean, not everyone’s been helpful, but no, it’s not something we’re looking at.”

Galase of the Cattlemen’s Council says that her organization is still following those USDA developments closely.

Grain In The Grass

Kualoa Ranch on Oahu’s windward coast is an entirely grass-fed, 600-head operation that sends four to five cattle to slaughter every two weeks. The ranch, which does not rely upon its cattle so much as it does on eco- and agro-tourism, also sells its excess calves to other ranches.

“The thought process behind going strictly grass fed is a wonderful one, but it’s a transition that would take quite a bit of time,” said Taylor Kellerman, Kualoa’s director of diversified agriculture and land stewardship.

Cattle at Kualoa Ranch are predominantly angus, one of the most popular breeds in Hawaii, and entirely grass-fed. Ku'u Kauanoe/Civil Beat/2021

Though opinions vary on the sustainability of either method, grazing cattle are sometimes considered more environmentally regenerative than grain-fed animals, as they can help restore soils. But grass-fed cattle also produce more greenhouse gases because of their longer lifespans, according to some studies, when compared to the grain-fed, feedlot system.

Some argue that feedlots make more sense for cattle on the mainland because of the availability of corn and the harsh winters. And despite Hawaii’s generally temperate climes, the interisland differences mean grass-fed beef is not necessarily a panacea.

Some areas have well-developed soil, some have more arid weather, while others get more rain — all influence ranchers’ abilities to raise cattle beef to slaughtering age. It is estimated that 36.9%, or just over 210,000 acres of Hawaii’s pastureland is suitable for high-quality grass-fed beef production.

Other limitations are the ranchers’ ability to balance the benefits and drawbacks of managing animals over longer periods of time with slightly smaller herds.

But potential payoffs for ranchers are apparent, both economically and environmentally, as the premium grass-fed market commands higher prices and is facing an increase in demand.

“I think that the ideology behind grass-fed cattle is that you do have a premium product,” Kellerman said. “The pricing that you command could be a platform to make that economy a little more reasonable,” Kellerman said.

Kellerman says it’s a matter of being able to manage the land in a way that has not been done for a long time. Kualoa’s location means it’s never short on grass, thanks to being in a rainier part of the state, but others may need more intensive irrigation and water management to maintain enough forage for the animals to live and graze for 24 months, rather than for more transient calf populations.

“It’s kind of a difference of, well, I can raise calves on marginal land and sell them and not worry about them,” Kellerman said. “Or I can take the risk and I can create this opportunity where I can raise cattle to harvest size.”

Taylor Kellerman, Kualoa Ranch’s director of diversified agriculture and land stewardship, delivers cattle on a rolling basis to Honolulu Meat Company. Ku'u Kauanoe/Civil Beat/2021

VanderSloot is approaching grass-fed beef differently, having imported cattle from the mainland that might be able to provide additional quality of grain-fed cattle to the eventual product because of the cattle’s genetics.

“Everybody is interested in grass-fed until they taste it, and they say ‘Yuck, that wasn’t very good, it just has no flavor,’” VanderSloot said.

Despite VanderSloot’s perceptions of the American appetite, unlabelled grass-fed beef is often sold as “conventional” beef, accounting for about $3 billion in revenue. So, America is already eating grass-fed, whether they can discern it or not, in their burgers and ground beef.

Future Harvest

Though the investment in harvest and processing facilities has marked a new opportunity for small ranchers, buoyed hope for the future and is a potential point for diversifying beef operations, there is more to be done, says Unger of McCandless Ranch.

For Hawaii to increase its local production and delivery of beef, it will need to rely on people investing more in existing and new slaughterhouse facilities and infrastructure in the state.

McCandless says two questions remain for farmers and investors: Are there enough animals in Hawaii to justify investing in slaughterhouse facilities, and if a rancher wants to expand operations will there be a slaughterhouse for the animals?

“Hawaii Grown” is funded in part by grants from the Ulupono Fund at the Hawaii Community Foundation, the Marisla Fund at the Hawaii Community Foundation, and the Frost Family Foundation.

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