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Isle port moves through thousands of heifers

By Laura Elder
The Daily News
Published June 15, 2011

GALVESTON - A ship carrying 1,449 pregnant heifers departed the Port of Galveston for Russia on Tuesday, marking the first time in decades that livestock was handled at the island's public docks.

But it won't be the last, as Russia increasingly turns to the world market to restore its herds.

Longshoremen, more accustomed to handling produce, farm equipment and cruise passenger luggage, worked from Monday night until Tuesday morning at Pier 34 herding cattle onto the MV Angus Express.

Loading the feed for the trip took longer than loading the cattle, officials said. The ship, carrying Angus, Hereford and Holstein heifers, is sailing on what's expected to be a 24-day voyage to the Port of Novorossiysk on the eastern shore of the Black Sea.

Shipping cattle means cargo diversification and jobs for the port, which worked 16 months to achieve the U.S. Department of Agriculture designation needed to export livestock, officials said.

Russia has imported processed beef. But until recently, disease and other issues with live cattle had prohibited their export to Russia.

The market for U.S. livestock producers opened up in 2008 when Russia agreed to accept breeding cattle, bovine embryos, fattening and slaughter swine and breeding and sport horses.

The heifers sailing on the Angus Express are from Kansas, Nebraska and Oklahoma.

As it stands, Russia won't accept exports from Texas, Alabama or Washington, where several years ago there were confirmed cases of bovine spongiform encephalopathy, or mad cow disease, a fatal degenerative disease affecting the central nervous systems of adult cattle. The disease can cause variant Creutzfeldt-Jakob disease, a fatal brain disorder in humans.

Vern Brown, president of Michigan First Midwest Ag Capital Partners, and his business partner Howard Scarff, of Scarff Brothers Inc., organized Tuesday's shipment to Russia.

Such shipments are complicated, heavily regulated and were preceded by long, bureaucratic meetings. Rustling up the financing and meeting all the health testing mandates and finding quarantine facilities wasn't easy, Brown said.

Since 2008, Brown's firm has organized seven live cattle shipments from the Port of Houston. But fog delays at the Houston port proved costly. Each day a ship is delayed costs about $20,000, Brown said.

The Port of Galveston has fog issues. But it rebounds quicker, and ship pilots allow vessels to sail as soon as the fog lifts, Brown said. The island port has another advantage - a warehouse next to Pier 34 to hold the cattle until they're loaded onto ships.

Federal animal welfare rules require cattle be unloaded, fed, watered and rested for five hours before loading them on to a ship.

Federal rules also require that the warehouse allows each cow 25 square feet of space and at least three-quarters of the space be under a roof.

Brown declined to say what the Russians would pay per heifer. But the cost of delivering the cattle to Russia is about $3,200 a head, he said.

Although it would seem more logical and less expensive for Russia to buy live cattle from European producers, it would mean dealing with hundreds of different small farms, as opposed to just a few large U.S. producers, Brown said.

Opening of the markets allows U.S. exporters to get a cut of Russia's $300 million market for live animal imports, the agriculture department said.

When Russia agreed to accept imports of live cattle, its herds had been in decline for 15 years. That decline began with perestroika, widely associated with then-Soviet Union leader Mikhail S. Gorbachev's policy of restructuring the economic system.

The idea was to stimulate the sluggish economy, but the policy, by all accounts, failed. The unintended consequence of perestroika, observers said, was the disintegration of the Soviet Union in the early 1990s.

While steak houses are opening in Russia's larger, affluent cities, the live cattle imports are meant to meet the most basic needs, Brown said.

"The large majority of people are just plain hungry," Brown said. "They need food."

Russia now imports 40,000 to 50,000 head of cattle annually from the United States, according to reports. President Dmitry Medvedev signed a doctrine last year that seeks to have Russia produce 85 percent of its meat domestically by 2020, Bloomberg News service reported in February.

Until then, livestock will increasingly be counted among Port of Galveston cargo.

Brown's group intends to ship 10,000 head of cattle from the island in September and another 1,600 in November, he said.

Port Director Steve Cernak said the revenues from Tuesday's shipment weren't immediately available and likely nominal. But loading ships puts people to work.

"It's about creating the jobs," Cernak said.

The last anyone recalls cattle moving through the port was in the 1960s, Cernak said.

It wasn't uncommon then for West End ranchers to herd their cattle down the seawall, turn on 37th Street and drive them on down to the port, officials said.