Where the Buffalo Moan

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"People who raise bison today are making a very, very good living," McFarlane says. "But that can end if the economics collapse. This is an industry that was created from scratch, and it is based on pure supply and demand. If you create too much supply, then prices will go down. That's it. So what happens if you grow supply by 20 percent and don't grow the demand at 20 percent? The answer is pretty clear."

What happened was that several million pounds of excess trim built up in freezers around the country. "This is an unsophisticated, agrarian industry," he says, "and some people didn't want anyone to know that this was happening. We knew it. The North American Bison Cooperative knew it, but the industry did not."

In late 1997, McFarlane and a local USDA representative met over a buffalo steak dinner at McFarlane's restaurant. The rep told him that with all this inventory of trim accumulating, he might consider something called Section 32 of the Agricultural Adjustment Act of August 24, 1935, a government provision that allows the USDA to buy surplus agricultural products in order to keep prices from crashing. "And that started the wheels moving," McFarlane recalls.

In January 1998 he hired an agricultural lobbyist and went to Washington, D.C., with Ken Throlson, the chairman of the board of the New Rockford, North Dakota-based North American Bison Cooperative (NABC), a 350-member rancher-run cooperative that processes about two-thirds of the USDA-inspected buffalo meat for the U.S. market. "We did a full dog-and-pony show," McFarlane says. "Everyone from the USDA was there to sample product and eat it and hear about it."

The lobbyist also hit up Congress, especially lawmakers from Colorado and North Dakota. "It took us two months, but we educated Washington about what a bison was," McFarlane says, "and they took to it."

On April 30, 1998, the USDA issued a press release: "The Agricultural Marketing Service will purchase up to $2.5 million of ground bison to help improve prices to bison producers. Dr. Enrique Figueroa, administrator of USDA's Agricultural Marketing Service, said the bison industry, an emerging agricultural enterprise made up of small producers, is experiencing excess supplies of bison trim which has resulted in a decline in producer prices. This purchase will help offset the impact of the surplus supply of bison meat and assist the industry at a time when it is striving to expand its domestic and export markets, Dr. Figueroa added. The ground bison meat purchases will be distributed to federal food assistance programs."

The USDA bought 673,000 pounds of bison trim from June through November of that year at an average cost of $3.70 per pound. Nearly 80 percent of it -- roughly $1.9 million worth -- came through the Denver Buffalo Company, which had agreed to buy it from the NABC specifically for the "bonus buy," as it was called by the USDA. The rest of the meat came from Bridgewater Quality Meats, a butcherhouse in Bridgewater, South Dakota, and Medicine Lodge Ranches, which raises bison in Idaho and Utah.

Anyone was eligible to bid for the bonus buys as long as he met certain standards; for example, the bison had to be slaughtered at a federally inspected plant, and the meat had to be packaged using specific requirements. The USDA then accepted the lowest bids. "For that year, it really helped, especially the co-op," says McFarlane. "But it didn't finish the job."

So McFarlane went back to the USDA with NABC chief executive officer Dennis Sexhus and National Bison Association president Del Hensel to ask for another buy. And on March 23, 1999, the agency announced it would buy $6 million of bison trim.

That's when the trouble started.

"A lot of cattlemen were upset about us buying it because of the cost of the bison per pound," says Barbara Cope, who is in charge of buying commodities for the agricultural marketing service, a division of the USDA. "And a lot of people thought it was just about Ted Turner."

Many people -- and there is a large file in Cope's office full of angry letters -- wanted to know why the federal government was spending $6 million to subsidize a billionaire like Turner while cattle ranchers, or "producers," as they are called, were struggling to make ends meet. Even some bison ranchers -- who said they didn't know about the trim surplus -- were disturbed to hear that their industry was taking government money.

But the bonus-buy program had nothing to do with Turner, Cope points out. Although he is one of the NABC's largest providers, Turner didn't lobby for the buy. Besides, she adds, the USDA spends money to buy surplus agricultural products whenever prices are threatened or depressed.

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Jonathan Shikes is a Denver native who writes about business and beer for Westword.
Contact: Jonathan Shikes