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Byproducts Cut Costs In This Feedlot

It s late September and all of the desks are empty in the head office at Sharpe s Farm Supplies near Guelph, Ont. Paul Sharpe hesitates a moment before choosing a place to sit down for an interview. He decides on the desk in his dad s office, the one with the big picture window that overlooks the brick bungalow where he grew up.

It s appropriate, since his parents, Bill and Marion, started the business that now provides a career for Paul and his brothers, Michael and John. What is your title here, I ask? I don t have one, he replies. We all wear a lot of hats.

It s that philosophy that has been applied to every aspect of the company: diversity. That way, as Paul says, one thing floats you if another one fails.

By design, it s hard to peg down just one area when describing their business. There s the grain elevator at the home base, five feed and farm supply stores, and an agronomy centre that sells fertilizer, herbicides and seeds, all forming the agribusiness side of Sharpe s Farm Supplies. The farming arm grows cash crops wheat, soybeans, corn and white beans and tucked away at a farm near Rockwood, where his brother John lives, there s a beef feedlot.

How does beef fit in to Sharpe s diversity equation?

It started in 2003, the year of BSE, when Sharpe s needed an outlet for oat hulls and corn screenings that were a byproduct from their grain elevator and feed mill. Corn screenings were hard to market the area doesn t have a lot of beef cattle left anymore so the market for byproducts from the elevator and feed mill was inconsistent and hard to find.

Their father had cattle back as far as 1967 so beef wasn t entirely new to the Sharpe family. The boys wanted to keep it simple, utilizing facilities that were already on the farm that they bought in 2003.

They started small and slowly built their numbers to where they stand today, rolling 500 head or so twice a year. The size and ease of operation fits in to their hectic schedules about an hour a day plus cleanout time is all it takes.

So what was their feedlot strategy? Number two corn had too much price competition from ethanol, export, and the hog and feather industries. They knew they couldn t get more money for their cattle, nor could they buy them any cheaper, so the place to realize a bit more profit was to utilize different inputs. As he explained, our advantage is on the feed side.

The cattle beast is a tremendous thing, said Paul. As a ruminant they are able to use grains and byproducts to add value to what may otherwise be considered waste.

They ll use what is available, from frosted corn to rained-on horse hay that stretches the silage. It s not a nutritional discount but it is a monetary discount to use such feeds, helping to manage their cost per pound of gain.

Partly because of their proximity to the GTA (Greater Toronto Area), based near Guelph, Ont., Sharpe s also has access to some unusual byproducts.

It s those other products that help to account for a two-to three-cent competitive advantage, ingredients such as brewer s grain from microbreweries in the GTA, coming in lots of small-volume deliveries that food processors are happy to sell at the price of trucking.

Paul also utilizes bakery byproducts that contain a high percentage of chocolate to provide a source of carbohydrates for the cattle. As he says, it s all just wheat and sugar.

Again, the proximity of the farm to the GTA provides the advantage: a middle man collects broken cookies, ice cream cones, jujubes and other throwaways from small bakeries in Toronto and blends them to get a consistent product that has a high percentage of chocolate, making it otherwise not usable by feed mills. Bakery has the biggest potential for variability so it is limited to less than 15 per cent of the ration. The cattle like it but so do the bees, making storage a little tricky at times.

New storage facilities at their feedlot make it easy for companies to recycle such byproducts on a regular basis, ensuring a steady supply as feed ingredients for the cattle.

The bulk of their feedstocks remain corn based, including wet corn gluten and wet distillers grains, corn screenings, corn chop that is a byproduct from a birdseed plant, and corn silage.

Sharpe s cattle do qualify for the Ontario Corn Fed Beef program administered by the Ontario Cattle Feeder s Association, where Paul sits as a director. That marketing program started 10 years ago, has been growing in popularity since Day 1 and snowballing since May 2011 when Loblaws took it on.

The diet still needs to be predominantly corn, Paul reports, but he is allowed to use some other products such as brewer s grain and bakery as long as they are registered with the government (which they are) and are fed at less than 20 per cent of the overall diet. The inclusion of bakery byproducts reflects recent changes to the program requirements.

When it comes to balancing the ration, Paul relies on the services of a nutritionist. Sometimes he can source byproducts at an economical price but won t pull them in because they don t meet their nutritional standards. Ingredients not only need to be consistent in supply and inexpensive but they also have to make sense.

Along the way they have tried some ingredients that haven t worked as well as they would have liked, such as pasta that came with garbage plastic gloves and cardboard boxes that had to be picked out. Others have tried to use food waste from grocery terminals but it may flavour the meat, especially if there are onions in it.

Another locally sourced input to their beef feedlot operation is hardwood planings from a local flooring mill for bedding. Walnut shavings cause health issues with horses but not for cattle, keeping them cleaner than straw and making for less work.

Sharpe s will market Black Angus or Charolais-cross steers, buying them both locally and from the West and selling through Cargill in Guelph. Their average daily gain is consistent at 3.6 to 3.9 pounds per day and they run a feed conversion rate of 6.5 to seven pounds per pound of beef. They ll market the steers at around 1,500 pounds, with 97 per cent AA or AAA and two to three per cent at single A grade.

Would feeding byproducts work for anyone? It s probably an Ontario thing, Paul admits, farming on the edge of the GTA with its many food plants. In other regions it may be hard to find the right ingredients.

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A middle man collects broken cookies, ice cream cones, jujubes and other throwaways from small bakeries

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