BIG SKY, Mont. – American bison producers are enjoying high prices for slaughter animals, but similar to the Canadian situation, demand is outstripping supply.
Producers attending the National Bison Association convention in Montana June 16-18 were repeatedly encouraged to expand herds and attract new ranchers.
Prices are approaching $4 per pound on the rail, said NBA president John Flocchini, a bison producer in Wyoming.
“Being in that position, it’s a little bit scary because we’ve never treaded these waters before,” he told a group of more than 250 members.
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Consumers continue to pay $7 per pound for bison at the meat counter, but the depth of their support and the maximum price point are open questions.
Still, producers are celebrating the arrival of profitable prices after tough times when production outstripped demand.
“Right now the bison business is on fire. The demand is outstripping our supply,” said NBA executive director Dave Carter.
“Despite the profitability, and how good things are, we are in an incredibly fragile business.”
He said the beef industry, and particularly grass-fed beef, is bison’s main competition.
“We processed as many bison under federal and state inspection all of last year that the beef industry does before noon on the first day of the year,” Carter said.
Terry Kremeniuk, executive director of the Canadian Bison Association, said his organization faces the same challenges. If the current trend continues, he said, total Canadian slaughter and export numbers could be down 50 percent this year because of lack of supply.
He attributes it to producers taking advantage of higher prices and to older producers leaving the business now that they can get better returns on their investment.
Kremeniuk said the CBA is trying to encourage new producers.
“We’ve been working on that for the last three years, but at the end of the day, it’s sustained profitability that will attract and retain people in the business,” he said.
Carter said the United States isn’t seeing much herd rebuilding, although he hoped more heifers will be retained this fall.
In the meantime, bison meat marketers have to short their customers.
Seventy-eight percent of the U.S. marketers who responded to an NBA survey said they are shorting customers by more than 10 percent and 40 percent are shorting them by more than 20 percent.
Half of the marketers feel they could sell at least 25 percent more product at today’s prices if it were available.
Bruce Anderson, who operates Western Buffalo Company in Rapid City, South Dakota, said the shortage is serious and long term.
Bison don’t produce calves until their third year, so 2014 is the earliest that herd numbers could appreciably increase.
In the meantime, customers need to be satisfied.
“This is new ground and we’re all a little bit amazed at what we’re able to ask for this product and how this product performs in the marketplace,” Anderson said.
However, he said that it’s important that the industry not appear greedy when it comes to price because that is an almost certain consumer turnoff.
“You guys deserve the money that you’re getting, but to the wrong person in the wrong place, without a background in this industry, we appear greedy. We can’t appear greedy. So, I caution this group to be aware of that.”
Carter said that the need to expand herds and meet demand can’t come at the cost of quality.
“We want to grow this business, but we see that it’s very important that we never, never, never compromise the integrity of this animal or the integrity of our product.”
