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On the auction block: Vermont's culled dairy cows head out of state to slaughter

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Posted on October 26, 2009 |
By Kathryn Flagg



web_auctionarena.jpg
COWS ARE BROUGHT one at a time into the ring for viewing by bidders at Addison County Commission Sales, the only auction house of its kind in Vermont. Below, owner Tom Wisnowski oversees the auction while Phil DeMarco calls out prices. With no large slaughterhouse in Vermont available to process the animals, roughly 200 cows each week are sold here and then shipped out of state. Independent photo/Trent Campbell

Editor’s note: In the first of two installments looking at slaughterhouses in Vermont, we examine what happens to the bulk of Vermont’s dairy cows — animals that are typically shipped out of state to be slaughtered. This Thursday, we’ll turn our attention to the growing market for local meats, the challenges facing smaller meat producers and slaughterhouses, and the creative solutions some farmers are exploring to make beef production more profitable.

ADDISON COUNTY — “Good cow,” shouts Tom Wisnowski, the owner of the Addison County Commission Sales. “Good cow coming up.”

At the East Middlebury commission sales on a blustery Thursday night, a few buyers huddle around a small pen, hunkered down on wooden benches lining the ring. Inside the ring, Andrew Gebo twirls a cane, and perched up above the auction floor Wisnowski and 78-year-old Phil DeMarco man the booth. They’re wedged into the booth beside the enormous face of a scale. A metal gate opens, the “good cow” steps off the scale, and then the gate slams shut with a jarring, metallic clang.

Gebo gets to work, rapping his cane on the cow’s haunches to send her around and around the small pen. DeMarco takes up the call in his thick, warbling voice. Half of his words are lost in translation. (Tom Wisnowski’s wife, Marcy, admitted that even she can’t decipher DeMarco’s words most of the time.)

But this much is clear: DeMarco starts the bidding high, gradually dialing back the live weight cost of the animal until a bidder bites. Prices for the good cows, the heavy, healthy ones, start high, in the neighborhood of 40 or 50 cents per pound. Older cows, or bony ones, or a few with pronounced limps, go cheaper.

Meanwhile, the bidders start in with their heckling, and the back and forth — between Tom, up in the booth, and the bidders, down around the ring — keeps up all night.

This isn’t good-natured ribbing. This is business.

“I don’t have that kind of market,” one man growls, after the bidding on one cow starts high. “You guys have got to be nuts.”

On a good night, Marcy said, Tom leaves a little unhappy and the bidders leave a little unhappy — which means the farmers end up with the fairest price for their meat. On bad nights, the auction could well devolve into a screaming match.

The buyers signal their bids with almost imperceptible nods of the head and flicks of the hand, and then, suddenly, the auction is over: Gebo taps the cow’s haunches, DeMarco calls out a winning bid, and the cow is hustled out of the ring. Already, there’s another animal waiting on the scale behind that heavy metal gate.

This is the other side of Vermont’s dairy industry: Every cow put into production in a milking parlor, after all, eventually grows too old to milk. So, more than 10,000 cows end up at the Addison County Commission Sales each year, the only auction house of its kind left in the state. Wisnowski’s trucks head out as far as 250 miles on their runs to pick up culled dairy cows.

The auction moves fast. These sales happen twice a week at the East Middlebury barn, where the Wisnowski family has run the commission sales for 60 years. Every week, 200 cows and 400 calves come through this complex. The bull calves typically go to veal, and most of the cows — almost always culled dairy cows — head to large, out-of-state slaughterhouses to be killed and processed into ground beef.

All of this prompts a few questions: Why are Vermont’s culled dairy cows heading out of state to be slaughtered? In a state in which the agricultural industry is built on dairy farming, are in-state slaughterhouses a feasible option? And are dairy farmers, who are losing money on the milk they produce right now, getting a fair price for their cows?

A LACK OF COMPETITION
Those are questions a few farmers and other officials are asking. The price of cows right now is low, which means even farmers looking to get out of the dairy industry are reluctant to sell their animals.

Others say that, because only a few major slaughterhouses come to bid on animals at the county commission sales, there isn’t any sort of competition between bidders to keep prices fair.

“I don’t feel like they’re really bidding on the cows,” said Bridport dairy farmer Jerry Connor. “They’re more or less setting the price before they even get here.”

“They” are the two biggest bidders on cows at the commission sales: JBS Packerland, formerly Moyer Packing, out of Souderton, Penn., and Cargill Meat Solutions, formerly Taylor Packing in Wyalusing, Penn. Typically there are anywhere from two to four major beef buyers at the commission sales in Addison County; last week, JBS and Taylor were joined at the bidding ring by Champlain Beef Company, in Whitehall, N.Y.

Connor has been running his own farm since 1968, which means he’s been selling cows for beef for just as long. He’s seen the number of large slaughterhouses buying cows at commission sales drop, and prices have gone down, too.

Recently, Connor said, the best price for culled dairy cows is roughly 40 cents per pound at the animal’s live weight, “tops.” If the cows are thin or not in prime shape, that price drops to 20 or 30 cents per pound. Connor’s assessment was on par with the prices rattled off at last week’s auction.

“This is 2009,” Connor said. “We were getting more for beef 15, 20 years ago.”

Just take the price Connor brings in for bull calves. The majority of these calves are sold for veal, while female calves are raised to milk.

These days, Connor reports earning just $10 or $15 per bull calf. In 1963, when his family first began farming in Vermont, the price was somewhere closer to $25 per calf.

SNAPSHOT OF VERMONT SLAUGHTERHOUSES
At the annual Addison County Farm Bureau meeting, attended by Sen. Bernie Sanders, I-Vt., Connor pressed Sanders to consider supporting the development of a large, Vermont slaughterhouse to process culled dairy cows.

Just why Vermont doesn’t have a large slaughterhouse of its own is a good question, and several feasibility studies over the past few years have investigated the potential for an in-state facility.

One, a 2006 study looking into the viability of processing ground beef, tried to determine the market potential for a line of “all-Vermont” ground beef, and proposed using some of the state’s existing smaller slaughterhouses to process the meat.

The upsides of more in-state processing are clear: Keeping processing in Vermont would generate jobs, cut down on the transportation of animals over long distances, and could earn farmers more money for their animals.

But there are plenty of reasons why an in-state slaughterhouse is easier imagined than executed, explained Tom Wisnowski. He’s seen a few packing companies go out of business in his time, including the short-lived Middlebury Packing. Local slaughterhouse options are dwindling: In 1984, there were 20 commercial slaughterhouses in the state. That number is now down to eight.

Swanton Packing, once New England's largest meat processing plant, closed in 2004. A fire shuttered Rutland's Fresh Farm's Beef in 2006. The remaining eight facilities don’t operate on the scale necessary to process Vermont’s culled dairy cows. Right now, the largest facility in the state slaughters around 600 head of cattle a year, according to Randy Quenneville, the meat program section chief at the Vermont Agency of Agriculture.

That’s just a tiny portion of the animals heading out of the Addison County Commission Sales alone, let alone the number of cows heading to “drop off” centers where animals are sold by set rates instead of auctions. The 2006 study on ground beef put the estimated number of culled cows in all of Vermont at between 19,000 and 30,000 cows per year.

The drop in the number of facilities coincides with a ramp up in regulations. The Swanton plant’s closing, for instance, lined up with a new federal rule that forbids the slaughtering of “downer” cows, or animals with broken legs that aren’t ambulatory. (Part of Gebo’s ring-around-the-rosies dance with the cows at auction demonstrates the animal’s soundness.)

The new rule lined up with a case of mad cow disease that originated in Washington State from a “downer” cow. The rule is based on safety concerns, Tom Wisnowski said, but it makes for a lot of waste among perfectly healthy, albeit injured, cows.

“The inspections are just brutal,” said Marcy Wisnowski.

Strict regulations aren’t the only obstacle facing in-state slaughterhouses. Expenses are high, and the scale of out-of-state facilities makes competition with those plants difficult; larger facilities have newer, higher-tech equipment, and aren’t faced with the same shortage of trained workers that many Vermont plants encounter.

But the biggest reason, according to Tom Wisnowski, boils down to volume.

“There’s not enough volume,” Wisnowski said, “and the majority of the major markets are big packing houses that will pay more than your local slaughterhouses.”

“Because they can distribute their costs more easily,” Marcy said, jumping in. Larger slaughterhouses slaughter thousands of animals; if they take a loss on one or two cows, or even a hundred cows, they can absorb that dent pretty easily.

Statewide, there are a few fledgling projects looking into small-scale slaughterhouses, but Quenneville said the idea of a large facility to handle culled cows just isn’t in the works.

“Realistically, there is no real push for that kind of a slaughter establishment that I’m aware of,” Quenneville said.

BUSINESS AS USUAL
The price of cows goes up and down, Tom said, just like milk prices. In fact, the two typically line up: When milk prices were high last year, farmers held on to their cows longer, driving up the price of beef. Now, as more dairy cows are culled from the national herd, the price has slumped a bit.

After the last round of Cooperatives Working Together (CWT) herd buy-outs, the price has rebounded a little. Not every farmer will see that in his or her meat check, but the live weight price on prime animals jumped eight cents last week.

During the auctions, Marcy spends most of her time in the office, where the sounds of shouts from the auction room are just slightly muffled.

Just like slaughterhouses, auction markets face a lot of regulations: The USDA comes in regularly to check the condition of the barn and the scales. That, and high insurance costs, are part of the reason why so few markets still exist, Marcy said.

The insurance comes in handy every now and then, when occasionally unruly animals jump the gate.

Back in the auction ring, a little bit of that unruliness reared its head Thursday. A cow balked in the ring, and Gebo darted out of the way as the cow lunged toward the spectators. She thrust her head toward the bidder from JBS Packerland, smashing his hand into the metal railing. The man had been crouched high up on one of the rungs separating the pen from the rest of the auction room, but as the cow lunged again he sprang back, clutching his arm.

Even so, it was a relatively calm evening at the commission sale. Almost always, Marcy said, tensions between Tom and the bidders run high. The bidders are looking for the lowest possible price, but the commission sales team wants to keep prices high; because they take a cut of the sale, high prices are good for the farmers and for the Wisnowskis.

The volume at the auction house has held steady over the past few decades, despite the declining number of farms in Vermont. The farms that have held on have grown larger, Tom explained. Now, instead of stopping at 10 farms to pick up 10 cows, his truck drivers might stop at one farm for the same number of animals.

‘WHAT WE STRIVE FOR IS FAIR’
Collusion between the few major buyers, Marcy said, is certainly a possibility — but if Tom starts to worry that bidders aren’t paying a fair price for the meat, he will occasionally bid on his own cows. That means leaving the booth, hunkering down among the buyers circling the pen, and occasionally buying up his own stock. That keeps the bidding as fair as it can be, though it means Tom is occasionally left with a few cows on his hands to feed and water until he can try auctioning them off again.

“(The farmers are) our bread and butter,” Tom said. “They’re everybody’s bread and butter … My father used to say, ‘When the farmers have no money, nobody has any money.’”

And, Marcy said, even the out-of-state slaughterhouses ultimately want to make sure dairy farmers stay in business. When a farm goes under, it might mean a short-term gain for slaughterhouses that can buy up beef on the cheap, but if the supply here dries up the buyers would have to go farther and farther away to fill their demand.

“On the whole, there are going to be people who are unhappy with the big guys, and then people who are (OK),” Marcy Wisnowski said, as her husband picked up the ever-ringing phone in the offices of the commission sales building. Out back, the calves going up for auction that evening kept up their braying.

“In the end, what we strive for is fair,” she said. “Fair is going to get you some screaming and yelling on any given night. If that’s how it works at the end of the night, then we’ve done our job.”

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