v THE NICHES OF RAFTER 5

THE NICHES OF RAFTER 5

Ranchers Tom and Clarion Breuer profit from niche markets for wheat and cattle.

By Melissa Hemken

Tucked among the breaks that ring North Dakota’s Lake Sakakawea reservoir, spreads a ranch. Its ranchers, Tom and Clarion Breuer, describe themselves as “nothing special,” but they, as do many ranchers and farmers, diligently care for America’s working lands. The Breuers, of Garrison, North

Dakota, learned their land’s nature — its capacity and connections to grow grain and cattle. Tom and Clarion farmed their arable fields with organic durum wheat for Annie’s Homegrown pasta, among other clients. In the rough grasslands, the Breuers raise beef cattle for general and direct-to-consumer markets. “My parents and grandparents moved off the river bottom in 1955,” recalls Tom Breuer, “to about 10 miles east of here on the highest ridge in the country without a tree in sight. Then, back in 1976, I informed my dad, ‘I’m setting up camp down there in the hills.’

I just never could get used to living out there with wind, so I came back down here [by the lake].” Tom’s and his wife

Clarion’s Rafter 5 Ranch includes the rough breaks along Lake Sakakawea — the second largest man-made reservoir in the U.S. by area and the third largest by volume — and cultivated fields up on the flats.

Rafter 5 Ranch near Garrison, ND with Lake Sakakawea in the distance.

Growing Organic

Selling grain on the commodity market delivered slim financial returns, so the Breuers decided to grow organic durum wheat because it commanded premium prices on the emerging organic market. In 1992, the Breuers certified their crop fields as U.S. Department of Agriculture (USDA) organic. The certification requires tracking each bin of durum to its field of origin, in addition to organic farming practices. Organic durum demands a surcharge, which offsets the annual, tedious paperwork to maintain USDA organic certification.

“Organics will always command a better price than conventional grain,” Tom says, “because there is a certain group of people in the United States that think eating organic will keep you alive longer. It takes three years to transition crop ground into the program. My annual application, just the application, consisted of 80-something pages. I would have rather had teeth pulled than work on it, I really would have.

“It’s an audit that’s more intense than an [Internal Revenue Service] audit. We’ve been through three IRS audits in our 42 years together, and I had an Organic Crop Improvement Association inspection every year. But, organic farming was very good to us for many years.”

At the start, it was difficult to sell the organic durum because of shady grain buyers. Tom chased payment from the middlemen who accepted delivery of his grain, once all the way to the Minneapolis-Saint Paul International Airport. In the airport the buyer finally gave Tom an envelope of checks, which Tom fanned to confirm the monetary amounts. He

returned home and Clarion noticed that only the check on the top was signed.

“Those buyers know all the tricks in the book,” Tom says. “I have never really been one to sit still when there’s something like that going on. So, I traveled to trade shows and stuck my nose in places most people wouldn’t. As I learned more about the market, I met the buyer at the State [of North Dakota’s] Mill and Elevator in Grand Forks. I delivered the mill its very first load of organic durum and was paid cash on delivery. We cut out the middlemen.”

One contract he acquired was with Annie’s Homegrown brand of organic pasta. The Breuers hosted Annie’s vice president, at the time, on the ranch for her to experience first-hand the landscape and durum harvest.

“She didn’t even know what durum looked like in the field, or how it was harvested,” recalls Clarion Breuer. “She was more worried about rabbits that were going to get in the [combine] heads.”

The vice president rode along with Tom as he operated one of the four combines apart of the harvest crew. “She asked me, ‘Now, tell me the truth. What’s happening to the little animals that live amongst the grain crop?’” Tom recounts. “I told her that the mice will go underneath, because we cut a 10-inch stubble. If the rabbit is deaf he might not hear this combine coming, but I bet he at least feels it, and he will leave the area. The mortality rate of little animals is zero unless you count the grasshoppers, crickets and ladybugs. I wasn’t really sarcastic. I might’ve been a tad blunt, but I was quite informative.”

Tom and Clarion produced the majority of organic durum in North Dakota, and Annie’s featured them on the back of a box of pasta formed with Rafter 5 grain. “I think consumers like the idea that they can go to their shelf and see a man’s name on a box of food,” Tom says. “They feel there’s a person, not a corporation, they could contact and that sets their mind at ease. But never once did anybody ever call Annie’s and say, ‘I want to talk to Tom.’”

The niche of organic durum successfully generated profitable returns for over 20 years for the Breuers. Then, in 2014, they faced a shortage of dependable ranch hands while Tom endured multiple back surgeries. One day, Clarion entered Tom’s hospital room to find him resolute: they must reduce their workload. “I decided to lease out X only niche; they also identified niche markets for their cattle herd. The Breuer’s Rafter 5 cattle are sold through the sale barn and directly to consumers to diversify income sources and profit. Feeding out cattle to processing weight

Tom Breuer holds organic durum wheat. Photo courtesy Clarion Breuer.

The Rafter 5 Ranch’s feeder calves before shipping. The ranch’s feedlot for direct-to- consumer beef sales lies in the background. Photo courtesy Clarion Breuer.

amount of acres and we would just keep enough [cropland] to grow feed grains for the cattle,” Tom says.

“I didn’t argue,” Clarion adds. The Breuers know it pays to realistically evaluate market strategies and adjust course when necessary. began with a steer that fractured his leg in the trailer enroute to the sale barn. Tom took the steer from the sale barn to a local locker to process it for meat.

“The steer must have weighed about nine [hundred]; not what I’d consider finished,” Tom says. “Well, we’d eat him anyway. Damn, that was the best meat we’d ever had! We decided to finish a few head ourselves. We started by

Clarion and Tom Breuer in their ranch house.

finishing heifers that wouldn’t breed up because we already had some around. People knew we had a few cattle in our small feedlot, so we sold a couple halves and wholes.

“Pretty soon we had a regular list of people. I took four cattle a month to the locker. It grew to be quite a little niche. I’ve always been open to the little niche market, because there’s always a little premium.”

Tom finishes cattle that might otherwise earn low prices at the sale barn. These include calves that would have their sale price docked because they lost their ears to frost bite, an injury bobbed their tail, or they sport white markings from the Rafter 5 herd’s cross of Black Angus and Simmental genetics (most cattle buyers only want solid black-hided cattle). Additionally, Tom adds to the feedlot heifers culled from the main herd for not breeding or losing their first or second calves.

“I don’t like cattle buyers to dock my sale lots either,” Tom explains. “After my last load of feeder calves is delivered, I park the [semi-truck and cattle] pot, and I sit there at the sale. As the pen riders form the lots and mark cut backs because of a limp or whatever, I motion for them to put the calf in my pen. The buyers hate me because my sale lots consist of uniform calves. After the sale, I load the cut back calves that are in my pen back in the pot and take them home to my feedlot.” The Rafter 5 feedlot contains self-feeders. Once a month the Breuers grind corn to fill the feeders. “It’s a little to no labor for the fat cattle,” Tom says. “If you got really technical about it, and figured out the cost of feed and how many days on feed down to the penny... we probably make a few hundred bucks per animal above the sale barn price.” Tom’s and Clarion’s beef is in demand from North Dakota to North Carolina. “People want to know where animals have come from and what they’ve been fed,” Clarion explains. “Our cattle were born and raised here on our ranch, and that’s a selling point for people.”

The Breuers have yet to spend a dollar on advertising their private beef sales. Word spreads, organically. One of the Rafter 5 beef customers worked at the post office in Bismarck, ND. “He would pass out hamburger to his coworkers,” Tom chuckles. “I asked him, ‘How come you’re giving away your beef?’ He says, ‘Watch this.’ Before long we had a dozen customers from Bismarck’s U.S. Postal Service.”

North Dakota’s 2010–2015 oil boom brought thousands of people to the region north of Bismarck, and many became Rafter 5 beef customers. “It was a modern day gold rush,” Tom says. “We got hit with more orders than we had fat cattle. Then the locker wanted a couple extra to fill their meat case. We moved our yearly processing up to about 60 head. I dipped deeper into my herd’s younger cows. Then I realized those cattle needed to stay home. Getting too big, too fast, pinched us. And, I need to sell X amount of calves each year to balance the cash flow. I don’t want to run a full-scale feedlot. So I capped the little feedlot at finishing 50 head a year.”

By raising some of their cattle to processing weight, Tom and Clarion benefit financially from a niche market. They considered certifying their cattle USDA organic and the niche market for grassfinished beef. They didn’t calculate enough profit margin in either option because of the former’s restrictions and the latter’s slower finishing rate on the grass-only diet.

The Breuers do record every vaccine and antibiotic each calf receives and do not utilize growth implants or stimulants, because this enables them to sell feeder calves for the all-natural premium offered by cattle buyers. “We always compile a sheet of this information and present it at the sale barn,” Clarion says.

“It raises one more hand than you’d normally have bidding,” Tom adds. “There’s always a guy in the row of chairs that has orders to buy only cattle

I’ve always been open to the little niche market, because there’s always a “ little premium.

that carry an affidavit. And, I’m there to sign it. It often increases the sale price a couple bucks per head.”

Through the affidavit process, Tom met a cattle buyer that liked the all-natural Rafter 5 calves. “He asked me to let him know when and where I was selling our feeder calves,” Tom says. “This is our goal: to make our cattle the kind of cattle that buyers want.”

The Breuers benefit from the niche markets they established to sell wheat and beef directly to food brands and consumers. “They’re all subtle things,” Tom muses. “You don’t have to dedicate your whole calf crop to private sales. You don’t need keep all your bred heifers. You might sell off a few bred heifers here and there for a little premium. If it works for you, good. If it doesn’t, maybe there’s something else next year. We’re not ever getting rich at ranching, but we can pay our bills and we’re happy.”