RAISING CHICKENS IN COW COUNTRY
By Colter DeVries
Driving in to the wide-open valley where Flint Creek enters the Clarks Fork of the Columbia in June when the hills are solid emerald, the pines cover every horizon, and the wind is calm, the word majestic seems like an understatement to describe the scenery and vastness of this area of Montana.In a town that is dotted with reminders of days past, it is easy to see why Drummond was once a very proud cow-town. From the Hereford Bull sign as you enter town that reads “Home of Montana’s Best Breeding Cattle,” to an Angus Bull sign welcoming you to Drummond followed by Mentzer’s Used Cow Lot with long horns atop an overhead. You start to believe the interstate billboard that this was once the seed stock capital of the world.
As a ranch-broker who might be in Cody Wyoming on a Tuesday and Kalispell that Friday, two things come to mind as I pull off the interstate to see old friends. First of all, what amazing country this must be for livestock. No sage brush, incredible grass, plenty of irrigation, abundance of live-water, and a much more favorable climate than that of Medicine Bow Wyoming, Westby Montana, and most places in-between. Secondly, it’s hard to imagine there are many multi-generational family ranches left in this area as the 5 mountain ranges that make this region so plentiful in grass and water also make it so desirable to the new era of ranch owners.
There is currently what brokers would call a good supply of inventory of ranches for sale in the Drummond area for no less than $1,253/Acre on even the most rugged timber-lined parcels of straight pasture offerings. With values like that one had better hope his bulls hit the $100,000 jackpot at auction several years in a row if he is going to continue scaling his registered operation.
The annual Drummond rodeo is called Bullshippers Rodeo Days, but given the changing dynamics in land ownership and agriculture, I have a hard time believing the future of this region is centered around registered Angus or Hereford production. This is of course unless that registered outfit is operating on all leased land, or that registered herd is just part of the image of today’s western Montana lifestyle, hobby, and recreational ranches’ owner.
Another rancher who can see the changes coming understands that scaling the livestock business is not going to be feasible any time soon and chooses to accept it and move forward is Alex Verlanic. Along with his two other brother’s Andrew and Connor the Verlanics operate a cage-free egg operation and run their family’s 4th generation registered Angus herd.The cage-free chicken operation might have been youngest brother Connor’s idea, but all three brothers bought-in and surprisingly enough it didn’t take a lot of arm wrestling. Unlike the family operations I am familiar with these three share ideas, workload, risk and responsibility really well.
For three men who were exceptional college football athletes, Connor and Andrew at MSU Bozeman while oldest brother Alex was at UM Missoula, the cooperation between them is actually benefitted by their competitive nature.Alex and I were classmates at UM studying finance. Andrew and I were classmates at MSU’s College of Agriculture and while they were both exceptional athletes on the field they were even more so in the classroom.After college Alex moved to San Francisco to work corporate restructurings for one of the nation’s largest CPA firms. He consulted private equity clients on bankruptcy, consolidation, and M&A deals. Andrew and Connor took the reins of the family ranch. So when Alex came back to the ranch the age old situation of being long on labor and short on opportunity was a reality they faced with virtue and resolution. Rather than feeling like victims of the market and unable or unwilling to bend with the time they found absentee owned opportunities to work with in growing the herd to meet the needs of the growing family.
When Connor brought up the potential to capitalize on the demand for cage-free eggs in western Montana, in particular their location relative to Missoula, everyone at the dinner table listened with intrigue and optimism rather than pessimism and negative skepticism.“If you look at what’s going on with Beyond Beef and the lab-grown cell-cultured stuff it’s scary to think what the future of beef looks like,” said Alex. “I’ve been reading articles and following the trends as to how consumers, Millennials in particular, view animal proteins. It just doesn’t feel like a positive outlook long-term. We needed to find a way to diversify and capitalize on this opportunity.”
With three cooperating and work hungry young men who are well-versed in finance, agricultural production, and business management they then set out to find the barns, process, vendors, diagrams and marketing relationships to make this cage-free egg venture happen.They built the barns, feed system, assembly line and conveyor belts themselves as any good farmer would. With the experience in production-ag that we all come to appreciate most, they have been learning the importance of finding trust-worthy and reliable vendors, developing a reputation of quality and integrity, and looking for cost-savings such as growing their own feed.One of the unforeseen opportunities they have established was the benefit of rural-labor. “We are lucky to have four or five part-time employees who were more than willing to make extra income because they live right here in Drummond and there isn’t much else around here for work” says Alex.
Quite often when other areas of the economy are doing well agriculture struggles to fill the need and a dependence on immigrant labor is created. The climate controls, feeding, and harvesting equipment are mostly automated, but with the hands-on tasks such as cleaning, candling, and packaging the eggs the Verlanics are in the rare position to have quality and reliable local help that so many other small businesses struggle to obtain.
With a roaring economy that is at the lowest unemployment rate in nearly 50 years the impact of job growth is often felt adversely across rural America as it is felt in the urban centers. Yet value-added and ventures such as Verlanics cage-free chicken eggs show us on a small-scale what opportunities are available for those with the right attitude and perspective.
As we all know, change is the only thing in life that is constant. Long before the cattlemen came to call Drummond their home, miners claimed this area as their own. Much like a declaration of the world’s best cattle genetics, this industry of prospectors were so certain of their stake on the landscape they gave it names such as “New Chicago” which much like the leaning corrals and deteriorating barns that dot the ranch-landscape today, the gem and gold towns fell to ruin by new technologies and changing markets.
I believe change is an important fact of life to remember while we talk to our banker about this year’s operating renewal, the discussions we might have with our agronomist on new seed varieties, or simply those dinner-table ideas much like Connor shared with his brothers a few years ago. This area has seen its fair-share of change. From the stories of Nez Perce killing gold-panners as told by Andrew Garcia in his classic Montana memoir Tough Trip Through Paradise to Earth First protests that led to the rise of environmentalism and displacement of the timber industry. Industry is always changing. For ranchers today in even the most isolated pockets of Montana, such as Turner, an old Chicago-based firm is working on monetizing the potential for carbon sequestration credits. A new market is being developed while an old one dies. This is what the Stoic Philosophers call the transitory nature of all things.
So as appreciated land values might displace the smaller and generational family farmer with a fly-fishing and elk-hunting Silicon Valley entrepreneur, who values scenery and recreation higher than average daily gain on Angus calves, resilient and creative players in the market will find a way to adapt and roll the dice on a new venture that responds to these changes in a capitalistic manner. Entrepreneurs like the Verlanic brothers will continue to lead the way in creating value for a new economy while also maintaining their Agrarian Montana roots.As I was leaving the ranch, set to make my trip to Kalispell for MFU’s midyear meeting and touring some of these progressive new ideas and ventures in Montana’s greater agricultural industry, Alex seemed to summarize it best. “We all wanted to be here in Drummond ranching. It’s where we grew up, what we wanted to do, and where we wanted to live, we just had to find a way to work together to make that happen.”