Beef for Whole Foods: How a Big Deal With Tribal Ranchers Collapsed

By John Lancaster, WyoFile, Guest Writer, 7-01-10

	Arapaho Ranch entrance sign to the main ranch on the Wind River Reservation. The certified organic ranchhttp://wyofile.com/ will not be providing steaks for Whole Foods after all. WyoFile Photograph by Robert Durell.

Indians and whites have been doing business together since the time of Columbus—almost invariably to the Indians’ detriment. But the announcement last year that the Northern Arapaho tribe had been tapped to supply organic grass-fed beef to Whole Foods Markets seemed like a win for all concerned: The tribe would make money off its land, the grocery chain would score points for environmental and social responsibility, and consumers would enjoy the health and culinary benefits of eating free-range beef with a Native American pedigree.

Alas, it hasn’t worked out that way.

Barely a year after it was trumpeted with tribal dances and cooking demonstrations at Whole Foods stores in Denver and other western cities, the beef deal has collapsed. Tribal officials pulled the plug after a price dispute with Paramount Meats, Inc., the California firm that was the middleman in the deal and now provides Whole Foods with grass-fed beef from other sources. The tribe has recently resumed selling its cattle in the conventional beef market.

“We weren’t making a profit,” explained Harvey Spoonhunter, the chairman of the Northern Arapaho Business Council that oversees the Arapaho Ranch, a 595,000-acre cattle operation near here. “It just wasn’t a good fit.”

The story of the short-lived partnership is in one respect a straightforward tale of a business deal gone awry. But it also highlights the challenges Native Americans face when they seek to share in the nation’s prosperity while safeguarding their natural resources and culture. The problem is particularly acute on the Wind River Indian Reservation in south-central Wyoming, which the Northern Arapaho share with the Eastern Shoshone tribe. Despite repeated attempts at economic diversification– including the introduction of casino gambling– tribal members continue to rely heavily on oil and gas royalties and various social-welfare programs. There are few Indian-owned businesses here and unemployment is as high as 60 percent in the winter.

“They’ll joke that nothing ever works out, and that often seems to be the case,” said Todd Guenther, an archeologist and historian at Central Wyoming College in Riverton. “The arrangement usually involves a white businessman trying to take advantage in some way, but this one was exciting because it sounded like something that was more of an equitable arrangement. But something always goes wrong.”

‘A Cowboy’s Dream’

The tribe acquired the Arapaho Ranch in a foreclosure sale in 1940. Situated on the northeastern corner of the reservation, the one-time sheep operation sprawls across the snowy spine of the Owl Creek mountains, a rugged, breathtaking wilderness populated with elk, moose, antelope, deer, wolves, mountain lions, bighorn sheep, coyote– even the occasional grizzly bear. Its creek-fed draws and high pastures are carpeted with native bunch grasses and forbs that are ideal for grazing. Tribal leaders describe the property as part of the Arapahos’ national patrimony, and say they feel as much responsibility to its land and wildlife as to its balance sheet.

“It’s the pride of the Northern Arapaho,” said Spoonhunter, who has fond memories of working summers on the ranch as “rabbit choker”– a low-level ranch hand — during his boyhood in the 1970s.

To maintain the property in as natural a state as possible, ranch hands ride horses instead of ATVs, eschew the use of fertilizers and herbicides, and refrain from shooting wolves and other predators. Though the predators occasionally kill cattle, they also help protect streamside vegetation by discouraging cattle from lingering too long in one place, according to ranch manager David Stoner. The property is so vast that cattle essentially follow the grazing patterns of wild ungulates such as elk, which migrate between higher and lower elevations with the seasons.

“This is a cowboy’s dream,” Stoner said.

It certainly looks like one. Stoner’s office is adjacent to a corral and a big red barn that appears to have been lifted from the set of a John Ford movie. At lunchtime during a recent visit, young cowboys in jeans and chaps, battered field coats or long-sleeved work shirts and a variety of neckerchiefs filed into the cookhouse, spurs jingling as they walked. A mixture of whites and Natives, the cowboys would soon move into the mountains, where they will live in tents and spend much of the summer branding cattle.

Among them was Starr Miller, 17, a shaggy-haired Arapaho with a bashful smile. Over burritos made from Arapaho beef, Miller described the joys of riding, roping cattle—“the funnest thing is when you win a battle with a two-year-old”—and sharing adventures with his cowboy friends.

“I love the cattle and this big, open country,” he said.

He credits the ranch with helping him straighten out his life since he was kicked out of school for fighting at the age of 14. “It taught me a lot about life skills, how to behave myself,” said Miller, who is working toward his G.E.D. as a condition of employment at the ranch. “I’m a little more grew up than I should be for my age.”

The ranch’s multiple personalities—part business, part nature preserve, part jobs program—makes it difficult to run profitably. Herding cattle is much harder in mountainous terrain than on the flat, and management efficiencies sometimes take a back seat to the demands of collective ownership, such as the goal—so far unmet–of filling 80 percent of ranch jobs with tribal members. Before he arrived in 2001, Stoner said, managers rarely lasted more than a year or two.

Like most who have run the Arapaho Ranch, Stoner is not Indian, and he has an unusual background for a professional cowboy. A lean, earnest man of 57, he studied philosophy at Colorado State, still reads Wittgenstein and Camus in his spare time, and listens to National Public Radio while touring the backcountry in his Toyota four-wheel-drive 4Runner. But Stoner, who also runs marathons, has spent most of his adult life working with livestock, including a seven-year stint as resource manager on the Ute Mountain reservation in southwestern Colorado.

Going Grass-Fed

The Arapaho Ranch was troubled when Stoner arrived nine years ago. Workforce turnover was high and substance abuse among employees was a grave problem. The land itself was under stress from years of drought, as well as the aftereffects of the so-called Kate’s Basin fire, which swept across 168,000 acres of the ranch in the summer of 2000. “Things were really in turmoil here,” Stoner recalled.

He made a number of changes, including mandatory drug and alcohol testing for workers. He also began to ponder the possibilities of a new approach to producing beef. At the time, the ranch was run as a conventional “cow-calf” operation: Calves were separated from their mothers at the age of about six months and sold about 45 days later. Most wound up in midwestern feedlots, where they were fattened up on corn and, more often than not, treated with hormones and antibiotics.

“It’s a horrible system,” Stoner says. “It’s a system about efficiency, not about environmental concern or producing a healthy product.”

The grass-fed model appealed to him on ethical as well as conservation grounds. Cattle that are “finished” on grass never endure the miseries of the feedlot, instead spending their entire lives on the range. And because their meat is considered healthier than the conventional variety– it’s lean and high in Omega-3 fatty acids– it typically sells at a premium. At least in theory, the price advantage allows ranchers to shrink their herds–and lighten the burden on their land– without sacrificing income.

Stoner marshaled his arguments and in 2007 proposed the switch to the business council. The council readily agreed, both for business reasons and also because the plan appealed to their sense of responsibility for the land, said council member Ronnie Oldman. “We’ve just always had that respect for nature and life,” he said.  “That’s just the way we were raised. Back in the day, you only took what you needed to survive.”

In early 2008, the USDA certified the ranch as organic after establishing that it used no chemicals on its land or animals. It is now the largest organic, grass-fed cattle operation in North America, according to a news release from IMI Global, Inc., which assesses environmental practices on farms and ranches. The new business model allowed the ranch to shrink its herd of mother cows from roughly 4000 to 3200. Calves were kept on the range to gain weight on grass, instead of being shipped to feedlots. Starting in February 2009, Panorama, the California meat company, began buying about 40 of the “grass-finished” cattle each week. The animals were slaughtered at an organic-certified slaughterhouse in Colorado Springs, carved into rib-eyes and other cuts, and distributed among 28 Whole Foods stores in the Rocky Mountain region.

Whole Foods and Panorama heavily promoted the new product for its “local” origin and Native American cachet.

“It’s a cool story,” a Whole Foods blogger wrote on the company’s website, touting the tribe’s commitment to “maintaining the biodiversity and ecological balance of its land.” Tribal leaders were invited to promotional events. At the grand opening of a Whole Foods store near Denver last June, Spoonhunter donned a headdress of eagle feathers and porcupine quills and performed a traditional “prairie chicken” dance in the parking lot.

The strategy worked. “If I’m going to buy a few nice steaks this summer, these are the people I want my money going to,” blogged food writer Tyler Nemkov in a May 2009 posting for Denver Westword (title: “Meat with Meaning at Whole Foods.”) Douglas Brown, a feature writer who covered the story for the Denver Post, had a similar reaction: “I am comfortable with Arapaho Ranch, a place that nurtures its cattle until the day they are shipped off to slaughter.”

A Panoramic View

But the grass-fed model allows little room for error. Panorama had initially paid $2.10 per pound for “hot carcasses” — skinned, beheaded, eviscerated yearlings with legs cut off below the hock. But with the onset of cold weather, the weight of the grass-fed animals naturally began to drop; feedlot cattle do not have this problem. At the same time, Panorama’s overhead costs– for slaughtering, for example– had not changed.

“You get smaller and smaller rib-eyes, smaller and smaller steaks,” Mack Graves, the chief executive of Panorama Meats, said in a telephone interview. “You get horribly inefficient.”

Panorama began cutting its price. By March of this year, Stoner and the business council decided that the arrangement no longer made economic sense, especially since prices in the conventional market had begun to rise.

Eager to salvage its grass-fed business, the tribe subsequently approached Whole Foods about whether it would be willing to buy directly from the ranch, bypassing Panorama. Whole Foods considered the ranch’s offer, but recently decided against it because of its longstanding relationship with Panorama, according to David Ruedlinger, Whole Foods’ meat coordinator for the Rocky Mountain region. Panorama has lined up other sources of grass-fed beef to supply the chain. In a phone interview, Ruedlinger said he wished that things had turned out differently.

“I have a lot of respect for what they do at the ranch. I think their story is great and the whole process is admirable,” he said.

Graves, of Panorama, also expressed regret.

“I feel horrible about it,” he said. “They were such good folks. We could have worked it out, and we didn’t.”

This story originally appeared on WyoFile.com. WyoFile is non-partisan public service journalism, focused on politics and public policy.

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