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Commercial Elk Farming ă

Rich Forrest

Mountain Velvet, Ltd.,  Del Norte, Colorado

719-657-0942,  Antler333@amigo.net

www.elkusa.com

 

November, 2004

 

 

 

Summary:  Commercial Elk Farming is a relatively new agricultural industry for Western civilization and the United States.  Elk, more accurately described as “Wapiti”, are a magnificent and unique animal possessing several attributes suitable for business development.  Annually, bull elk produce “velvet” or soft antler, highly valued by East Asian cultures. Recent research in North American has declared antler velvet effective for nutritional joint support and maintenance.   Nutritionally superior elk meat (AKA venison) is becoming more popular and is developing rapidly.  Controlled “sport” hunting is also gaining popularity.  These markets are supplied with animals from an escalating breeding industry. Animals are expertly “farmed” to produce the maximum value offspring annually which can be sold at fluctuating market prices.

The History of Domestic Elk

Elk farming is relatively new here in the United States.  Until the 1960’s very few elk were commercially raised, mostly for zoos, game ranches or selective sport hunting.  Today, over 1000 game ranches hold approximately 120,000 animals, predominantly for breeding and velvet purposes.

Siberian natives have been domesticating elk and deer for thousands of years.  Europeans also have domesticated deer for hundreds of years.  Legends suggest that the American Indians had domesticated Wapiti like horses.  To the American Indians, the elk also had spiritual and religious connotations.

Theoretically, all North American elk varieties are derived from Siberian stock, which migrated across the Alaska land bridge during the ice ages, hundreds of thousands of years ago.  They are direct relatives of European and Asian red deer and will still interbreed with them.

Until recently, only New Zealand has had a thriving red deer, elk and elk-hybrid business dating from the early 1960’s.  Surprisingly, U.S. President Theodore Roosevelt seems to have created the New Zealand (NZ) industry by shipping a small excess elk herd from Wyoming’s newly formed Yellowstone National Park in the early 1900’s.  Over the years, these animals mingled with imported European Red Deer and survived well in NZ’s lush forests and glens where they were later captured and domesticated by game ranchers.  New Zealand has a 20-year lead in the husbandry of elk and deer.

The NZ business continued to thrive and expanded to over one million deer-family animals.  The red deer-elk hybrid market has now matured into both velvet and meat production.  The driving force behind NZ expansion was the Near East’s demand for elk and deer products, particularly for such items as antlers, tails, pelts, etc., much for pharmaceutical use.  Currently, much of the NZ meat goes to Europe, but a strong attempt has been made to penetrate the American market with their “CERVENA” brand of venison.   Further, the elk and deer meat is in strong demand locally, where the proper slaughtering of animals has become an art.

The erratic availability of Siberian elk and now the superior North American elk from commercial operations had slowly impacted NZ’s velvet market until Chronic Wasting Disease (CWD) was found in a few North American elk and many deer.  CWD has sufficiently scared the marketplace to significantly reduce the value of American elk. Basically, the Asians had indicated a preference for northern hemisphere (cold weather) elk products and more recently, Siberian Elk velvet is becoming more difficult to obtain due to corrupt influences and a badly dated and inefficient infrastructure.  

All domestic elk in the US must come from private herds.  The last elk sales from Yellowstone were in the 1960’s.  Commercial elk are not “wild animals”.  Many generations of controlled breeding have create larger and more docile herdstock.  In June of 1994, the Colorado Legislature recognized domestic “pure” elk (no red deer DNA markers) as Alternative Livestock under the jurisdiction of the Colorado Department of Agriculture.  Other states have gotten or are attempting to get similar legislation, most without the restrictions on red deer.

Elk Farming

Elk farming in the U.S. is in an early growth stage.  Breeding stock is of significant value.  Like cattle, growing the biggest and best elk is on everyone’s mind.  Unlike cattle, only about 15 years have passed since elk farming as an industry was realized here in the U.S.  In 1990, the North American Elk Breeders Association (“NAEBA”) was formed and has implemented a registry program to facilitate animal ownership, marketing, breed purity and strength.

Elk are hardy animals that need little of the attention required of cattle.  They will eat whatever they can forage, including shrubs, leaves and tree bark.  The lush grasses of summer will allow them to store fat for winter.  Green alfalfa and grain supplement are the preferred feeds.

Two to three elk may be kept in an area suitable for just one beef steer. Elk eat about 2 to 3% of their body weight daily.  Bulls average about 800 to 1000 pounds in weight while cows range from 450 to 650 pounds.  Proper elk management in North America requires the feeding of supplemental hay during the winter followed by a rich vitamin-mineral routine before and during breeding, calving and velveting.  On good irrigated ground, feeding costs are generally less than $300 annually per adult animal whci can be reduced to about $150 annually with creativity.  The mortality rate of a young, well-managed herd should not exceed one to three percent annually.

Facilities for elk are divergent from cattle.  Generally, eight-foot high fences are necessary, as per local regulation, and feeding stations are required.   Fence costs are high, easily exceeding $10,000 per mile.  Barn facilities with holding pens and squeezes are particular to elk, and are likewise more complex and expensive than for beef.

Elk Breeding

Elk mate in September or October and carry their young through the winter with a 248 to 255-day gestation period.  A properly maintained herd will have a +95% pregnancy rate.   Calving generally begins in mid-May continuing through June.  Calves are weaned and can be sold off in September.  At least an 85% weaning rate should be anticipated.  At an age of 15 to 16 months, heifers have a +65% chance of breeding if their body weight exceeds about 400 pounds or they are at least 70% of their expected adult weight. Cows generally bare only one calf annually, and the sex ratio is close to 50-50.  Calf mortality rates vary from 5% to 15% depending upon climate, feed, care, etc.  The mortality on bull calves is slightly greater then females.  Unlike pigs, or other domestic livestock, the slow calving process and single calf production, makes building elk herds a slow process. 

A female elk has a productive period of at least 12 years and perhaps up to 20 years.  Tax-wise, the animals are depreciable over 5 years.  Average cow prices have increased steadily from about $700 in 1981 until peaking in 1991 and again in 1997 at about $7,500.  In early 2002, CWD worries caused severe price depreciation throughout North America, so the current average cow prices are approximately $500 to $1,000 per animal varying with age and quality, while meat cows are $250 to $400.  Superior genetics start at $1,000 per animal and may easily exceed $2,000 per bred cow.  The calf crop yields a steady, albeit one-time-annually, cash flow.  Heifer calves are currently valued at from $50 to $100 for average animals, with $150 to $200 for average bull calves.  Proportionately higher prices are gleaned for genetically superior animals, particularly for potential herd sires.

Since bulls are less useful for increasing herd size, average bulls may sometimes command lower prices, unless of course, outstanding stud or velvet characteristics are present.  Mature Bull prices average of around $1,200 per animal today.  Currently both meat and then trophy bulls form a bottom line for animal value.   A few stud bulls have exceeded $50,000 in value, some $500,000.  A velvet bull is productive for at least fifteen years.  A well-planned nutrition program can increase velvet production and calving success giving higher values to well maintained animals.

Elk Velvet

The major product derived from mature male elk is “velvet” or soft antler.  Commencing in his second year and in all successive years a bull grows velvet antler annually.  The 20-year average value of grade A velvet is approximately $35 per pound, although the price is dependent upon the size of individual sticks and for the last few years due to the CWD scare prices have hovered at $10 to $20 per pound.   A good older bull will produce over 20 pounds annually, the current North American record is just over 50 pounds annually, while Siberian elk have been known to regularly exceed 50 pounds annually.  Currently, from a meat and potatoes point of view, a “twenty-pound” bull produces about $300 of  cash flow annually with no detriment to the animal.  At current prices raising elk for velvet or meat is at best a break even project.

Velvet antler is living, growing tissue.  If uncut, velvet eventually calcifies into hard bone like material and is shed in late winter.  At approximately 65 to 75 days of growth, soft antler is harvested surgically.  As such, extensive measures are taken to protect these valuable animals from harm.   They are miraculously growing upwards of 20 to 50 pounds of new tissue; skin, hair, cartilage and bone at the rate of up to 1/2 pound per day!  No other animal outside the womb has this ability.

Cut velvet is frozen, dried and then shipped to a manufacturer, either domestic or overseas, where it is cubed, sliced, ground, or pulverized into a variety of creative “rejuvenation” products.  Over 75% of world production is consumed in South Korea with the average Korean family ingesting about 30 grams of dried velvet annually.  With increasing individual affluence in Korea, China and other Asian countries, the demand for velvet products will escalate.  Recently, new manufacturers of elk products here in the U.S. are catering to the aging baby boomer demand for “natural” cures and rejuvenation products.  Several new domestic drying and processing plants have recently been established.  North American research has shown that velvet contains large amounts of glucosamine and chrondroitin with natural anti-inflammatory agents and nutritionally supports joint health and maintenance.  Once the baby boomers “discover” velvet, watch out!

According to ancient Chinese mythology, “the God of Longevity is paired with a deer”.  Various antler velvet products are reported to: regenerate hemoglobin; control blood pressure; increase lung efficiency; improve muscle tone and glandular functions; heal ulcers, relieve arthritis, ease the debility’s of old age, cure infertility problems, treat the common cold and sharpen the wit!  Can a 2000-year old society with 3 billion people be all wrong!  Someday perhaps, the western civilization medical establishment will recognize the value of these animal-derived products, just as they have now recognized acupuncture.

Not surprisingly, velvet chemical analysis has shown the presence of numerous amino and fatty acids including a hormone-like substance “prostaglandin”, usually found in high concentrations in seminal fluid and important for metabolism, reproduction, as well as, blood pressure, muscle and nerve control.  Try some elk velvet, its works!

Elk Meat

Elk meat is known for tastiness. Many of your finest restaurants serve expensive elk dishes.  Unfortunately, here in the U.S. real elk meat is rare and, in fact, is usually imported, frozen New Zealand elk-red deer hybrid.  Formerly, most domestic elk were too valuable for breeding, hence only culls went to the meat market.  This precluded a rapid short-term growth of the meat market.   However, times have changed.  The rapid depreciation in animals values following the CWD scare has made meat more affordable for the average consumer.  Elk meat is currently very competitive with all-natural or organically grown beef………and lower in fat and cholesterol!

Nutritionally, elk meat is superior to most other animal meats.  Lower fat and cholesterol suggest that elk will have a good future with the “Boomers”.  Burger generally sells for $4.00 to $6.00 per pound, while special trimmed meat cuts sell from $5 to over $20 per pound.  Due to a current abundance of meat animals, hanging carcass weight may bring $0.80 to $1.25 per pound, which is a bit below the cost of production.   Hanging weights average perhaps 400 - 500 pounds for a bull and 250 - 350 pounds for a cow.  Young animals (<3 years old) are preferred. Bulls older than 4 years should not enter the consumer food chain.  About 33% percent of the live animal is usable.  While, some experts believe that over 250,000 animals must be present before a meat market can thrive here in the U.S., that was before the recent price shakeup.  Currently, less than 150,000 domestic elk are in North America, including Canada, most originally for breeding stock. 

An offshoot of the meat market is the Asian’s desire for various elk products from a butchered animal, tails, pelts, hooves, internal organs, etc.  Although a ready market is not now available, undoubtedly it will develop as more animals are slaughtered.

 

Economic History and Outlook

Brood cow prices are one of the main products in a breeders market.  Average cow prices have escalated at an annual compounded rate of 24% annually from 1981 to 1991, and then falling back 20%-25% and leveling off in 1992 through 1994. Average cows reached about $7,500 before retreating.   Animal appreciation restarted again in 1995 especially for genetically superior stock.  Rapid price appreciation accelerated through mid-1997 when finally Asian economic troubles lessened demand for elk velvet antlers.  Average cows were again reaching into the mid $7,000’s.  A resultant severe market correction saw up to an unrealistic 50% drop in animal prices particularly for lesser grade stock.  Prices then collapsed in the 2002 CWD scare.   Meat values were the market floor with hanging weights at around $3.00 per lb. until retreating to about $1.00 per lb. in 2003. 

New demand for trophy bull stock has recently bolstered the bull marketplace, but restrictive and varying state import regulations have stifled trade and prevented breeding stock from appreciating in value.  While female values are still weak coming into 2005, a developing meat market may provide a profitable outlet for mid-age cows after they have delivered several calves.  A prudent operator may find opportunities in a bold new red meat business catering to the boomer generation.  Increasing demand for velvet in Asia, plus a rapidly growing North American ‘baby boomer” demand signals a possible upward trend for elk prices for the next four years assuming no additional major corrections occur in the world economic status.  A buying signal, especially for females seems to be in place.

Commercial Elk Farming ă

November, 2004

 

www.elkusa.com

Rich Forrest, Mountain Velvet, Ltd., Del Norte, Colorado

719-657-0942        e-mail:  Antler333@amigo.net

 

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