Tri-State Livestock News: Matt Thompson story: American cattle feeder fears power of sustainability groups

More and more eastern South Dakota grassland is being covered with water due to high precipitation amounts in recent years. Landowners want to maintain control of the water on their private property but are facing opposition from the state. Photo by Esther “Tiss” Treib

by Carrie Stadheim | March 2, 2018

After working for Cactus Feeders and establishing a successful feeding operation of his own, Matt Thompson and his family may have been the target of a bureaucracy that wanted them gone.

When their licensing conditions were arbitrarily changed, forcing them to cut their feedlot numbers nearly in half, the Thompsons’ Australian feedlot was no longer viable and they left with little more than the shirts on their backs.

The story

Matt Thompson and his wife Janet wanted to feed cattle.

He a Texas A and M graduate in agriculture, she the daughter of a Texas cattleman, they discovered after working at Texas-based Cactus Feeders for a few years that making their own start in feeding cattle in the United States would be expensive to the point that it wasn’t a possibility for the young couple. At least not in this country.

“In 2000, a friend called and said ‘you should come down to Australia and have a look.’ And we did.”

Thompson said he and his wife cashed in all of their savings — including some cattle his wife owned, and moved down under for a new start-up.

The feeding industry in Australia at that time was just getting rolling and it seemed to be the perfect investment for the Thompson family.

“Most of the feeders at that time were not licensed but we were told that if we got licensed, it would protect us from those who were opposed to cattle feeding. We wanted to do it right, we were going to do it better than anyone had ever done.”

Not only did the Thompsons obtain the appropriate permit — they spent two and a half years getting through the entire environmental permitting process — they went the extra mile to meet basically every environmental concern at the time, conducting permeability tests, rigorous cleaning of their pens and more.

The family grew the feedlot gradually. While they were permitted for a 10,000 head lot, they started with 1,000 head.

“It took a while after the first 1,000 head to get things moving but all of the sudden, people could see what value it had and what it brought to the cattle supply chain, and all of the sudden we couldn’t build fast enough.” Soon they were feeding 6,000 head and eventually, they maxed out their license allowance of 10,000 head.

Although a 10,000 head feedlot in the United States doesn’t sound big, in western Australia it was a “huge operation,” Thompson said. Cattle feeding in that part of the country was still a relatively new thing.

There were no government programs to get the family business started.

Western Australia, where they were living was a semi-arid climate, similar to the high plains in the U.S., Thompson said.

“We located in a place where they grow lots of grain,” he said. Wheat was the primary grain being produced, and therefore the main grain being fed to his cattle. “Wheat doesn’t often get fed in America. It’s worth more for the human market. But they can grow it there with less water than corn.”

The market for fed cattle was strong. The animals out of Thompson’s lot were headed for Japan or for the domestic market upon finish.

“By being there we figured we’d add grain already being exported to cattle already there to produce cattle for the Japanese market and domestic stores. Which we did and it was successful until we we got crosswise with the environmental department.”

Most of Australia’s cattle never see a feedlot, Thompson said, so his program was a niche market. Many of the cattle that come of the big ranches or “stations,” as they are called there, located in the arid regions of the country, are exported. Some are shipped live to the middle east, while others are processed and shipped as “minced meat” or ground beef to the U.S. for the hamburger and taco market, said Thompson.

So the family business was thriving. Thompsons’ 10,000 head lot was full.

“I became president of the association of lot feeders and when they started coming in with all of these emissions monitoring schemes which was the basis for the carbon tax, I discovered they were requiring us to report ammonia – to sign a paper based on our headcount.” The government agency said it was going to regulate any feedlot over 100 head. Thompson believes the government was establishing a carbon tax that wound up being used as a weapon against “anyone they didn’t like.”

Thompson said that his educational background was in cattle nutrition and he knew, based on the ration his cattle were consuming, how much nitrogen they were putting out.

“The amount of emissions they required us to report would mean that the animals were emitting more nitrogen than they were eating, which was impossible.”

Thompson wanted to be educated and prepared to deal with the regulating agency, so he became acquainted with others in his same boat — some from the mining and oil industries.

“Methane emissions were forming the basis for the carbon tax. I went to a meeting with mining and oil folks and I presented materials that showed the other side of the debate about global warming and it was like a week and a half after that, they came after our operation.”

Although he had followed the protocol and had remained in good graces with the bureaucratic overseers up to this point, when Thompson spoke out, he believes a target was put on his back, and the very license he was advised to get was ultimately used against them. “Other producers that didn’t have a license, didn’t have any problem.

“It became personal against us only because I was trying to oppose what they were trying to do – establishing a carbon tax to control production by declaring carbon for whoever they liked and didn’t like. I’m an opponent of centralized control. I like freedom. I was vocal about that and that’s why they went after our operation. The same thing will happen here. I think it’s hard for people to realize that until you live through it, they do take away your presumption of innocence and freedom of speech. That’s the goal of the World Wildlife Fund and the Global Roundtable for Sustainable Beef.”

The Thompsons’ feeding permit was reduced to 6,000, and he believes they continued to look for reasons to shut him down. “They told me that the law eventually got Al Capone on tax evasion and that they would find a way to get me.”

After building the lot slowly – beginning with a $400,000 loan and eventually building the business up to a value of about $7.5 million in American dollars, with about $3 million in debt at the time of the license change, the Thompsons were eventually forced out of business.

While the bank, the year previous, had credited them at least $4 million for their equity, when the license change occurred, “no bank would finance us.”

By 2010, the family was broke, unable to economically operate their feedyard, which meant no way to earn income.

Because the licensing of the feedlot was up in the air, the Thompsons couldn’t get a bid on the feedlot at any price. “It had no value as a cattle feedlot without a license. We couldn’t get a ten cent bid.”

In September of 2010, the family was given four days to vacate the property.

In 2011, the family learned that the a federal court judge had ruled that they could not sue the Department of Environment and Conservation, the agency that had arbitrarily cut their feedlot permit.

According to JoNova, a blog addressing international issues, the nearest community – a town of about 5,000 called Narrogin was supportive of the Thompsons. The blogger reported that in in April 2007, when the feedlot was running at its peak with 10,000 cattle, 884 people signed a petition in support of The Thompsons, going so far as to approve of an increase of 50 percent in their feeding numbers:

‘We the undersigned residents of the Narrogin District hereby support Matt and Janet Thompson in their bid to complete their cattle feedlot development to a capacity of 14,490 head. We appreciate the benefits that this business brings to our community, and we believe the Thompsons will continue to make improvements which will minimize nuisance issues.’

Said the blogger: “I’ve almost finished the documentation on the Thompson’s story. As a case-study of what we might all face if the powers of government continue to rise unchecked, their story begs to be told.”

Department of environment and conservation

In 2009, two of their closest neighbors wrote letters of support saying that the odor was not a problem and that the Thompsons’ were a benefit to the community, and not harming the environment.

Thompson believes that a Jordanian company now operates his old feedlot, under a different licensing structure, preparing cattle for live export.

“That’s another thing that happens with licensing. You establish authority with vague guidelines and rules. The company has different conditions on their license. That’s my whole point. We don’t want to lose the rule of law and get into these tyrannical situations where one regulator can decide “yes” or “no” based on whatever reason.

In addition to his concerns over excess governmental power, Thompson worries that even non-governmental organizations – like the Environmental Defenders Office in Australia – could target feeders or producers for reasons such as political disagreements. In particular, Thompson has concerns about the Global Roundtable for Sustainable Beef, and it’s close connection to the World Wildlife Fund.

Dennis Laycraft, the CEO of the Canadian Cattlemen’s Association and immediate past president of the Global Roundtable for Sustainable Beef said the GRSB is not in the business of harming operators, and that profitability is one of the pillars of sustainability it promotes.

“Economic, environmental, and social responsibility, the GRSB recognizes those three pillars,” he said.

The group was indeed established with help from the World Wildlife Fund, the instigator of the “meatless Monday” movement, and while Laycraft can understand why some are apprehensive about their involvement, he said WWF is becoming more rancher-friendly as the result of education from cattlemen’s groups.

“They’ve started to hire people who are cattle ranchers and have hired some out of Cargill. We feel like we’re making a stronger impression.”

Thompson said some producers worry that the GRSB would eventually call for some kind of sustainability certification and because of major industry players like McDonalds and JBS being involved, that the entire beef industry could be forced to play by rules that the retail sector invokes, or be refused the opportunity to market beef or cattle.

Laycraft said this will never happen on a global level.

“There were a lot of people making smoke and mirrors claims about sustainability for marketing purposes. We wanted a real definition of sustainability.”

Several countries including the U.S., Canada and Brazil also have organizations or “Roundtables for Sustainable Beef” which include members of commerce, processing, retail, consumers and environmental groups.

Individual country roundtables could move toward certification programs, which Canada is in fact doing, he said.

“There has been a demand and I think we will go ahead with it. It will be voluntary. It’s important that the cattle industry itself takes a leadership role so that whatever we develop is practical and is based on real information and not just a marketing agenda.” He believes that within 12 months, the Canadian Roundtable for Sustainable Beef will have established some kind of sustainability certification for those who wish to participate.

Thompson fears this is a foot in the door for control over individual producers. “You need to take every action to get out of the GRSB and not cooperate with groups like the World Wildlife Fund that say they want to destroy 20 percent of cattlemen.”

His fear is retaliation and targeting, similar to what he experienced. “They (producers) will no longer be in control of their operation and they will lose their ability to speak out. It may be a management practice that is called into question. You will not only lose your ability to do this but your freedom of speech.”

The Thompson family now resides in Colorado.