Betty Jo Gigot, Editor and Publisher

ONE FAMILY’S STORY
The sign greeting visitors to Schaus Land & Cattle says it all – “No Cash, Already Robbed.” The door to the large safe nearby bears a large curve from the cutting tools thieves used to breach the combination lock.

The thieves obviously had not read the national news; Schaus Land & Cattle had already been “mugged” by circumstances and politics as out of their control as the gents who came to rob them.

FROM THE TOP
Wally Schaus started by working for a feed company right out of college, selling feed across Canada. His customers knew he traveled a bit and started asking him if he knew where there were cattle for sale. Schaus began putting buyers and sellers together on a commission basis.

“It wasn’t planned,” Schaus said. “I was just helping out.” Eventually Schaus turned to buying cattle for a living.

“It was an exciting life,” he said. “I used to fly to Alberta on Sunday, buy, sort and load cattle and fly back to unload them. Then I would start all over again.”

Schaus’s work paid off. Thirty years later, he and his son Ken had a multi-faceted business out of their headquarters near Elmwood, Ontario.

A group of company order buyers bought and sold calves and stocker cattle, and shipped loads of finished cattle into packing plants in Pennsylvania and Illinois.

Their trucking company was booked solid, hauling as many as 75 loads of cattle south every week and moving cattle across the country.

BUILDING A DREAM
Schaus began to realize that there was also a lot of opportunity in cattle feeding, so he purchased a small confinement yard. Eventually he acquired a barn 30 miles from the Toronto airport and, after much research, built another to his own specifications. Paul Martin, whose family has worked with Schaus for years, manages the 3,500-head barn along with an older, 1,000-head barn.

The new confinement barn combined elements from across the world, including an underground waste system that can move 30,000 gallons of effluent per minute. The waste is transported in sealed trucks to a large potato farm nearby.

“You don’t touch manure until you pump it,” Schaus said, delighted with the facility’s design and efficiency.

The barn has a 55-foot-high cathedral roof and windows that swing open from the bottom.

“It can be very hot outside and still be cool here in the barn,” Schaus said. They use a lick bunk system, limiting feed, and provide spring water in the water bowls. The barn has no odor and floors are dry and clean, as are the cattle.

Dr. Peter Kotzeff, veterinarian and business partner, manages the company’s health and nutrition programs.

The newly finished mill is the only flaking mill in the province. Schaus researched mill designs as thoroughly as he did the confinement barn, using the best of all of the designs he could find.

As in other parts of the world, neighbors are not always receptive to a nearby feedyard. Someone from the city bought property next door, built a house and then worked on closing down the agricultural operation, but was unsuccessful.

UTILIZING THE LAND
Ten years ago, as small neighboring farms became available, the family bought several and started Grasslands Management as a separate company.

“They were farms where the ‘for sale’ signs were falling down and the owners were glad to get rid of them,” Ken Schaus, Wally’s son, said. The farms were cleaned up and fenced into cells where customers could put cattle out to graze under the company’s care. Grasslands Management now runs twelve farms.

A typical farm is grazed from the third week of April until October. The 190-acre farm we saw supported 242 head, and because there was excess pasture, 35 acres were put into hay production. Cattle are rotated according to plant condition and growth, usually about six days.

The major secret for the high production, according to Ken Schaus, is birdsfoot trefoil, a native legume. Seeds are broadcast with ATVs or snowmobiles and, once established, the plant flourishes. Cell grazing is the other key. If cattle are left to free graze, they will destroy the trefoil. The birdsfoot trefoil regenerates within three weeks to be grazed again.

The land is fertilized with hog manure brought in from a local sow unit, hauled by the hog producer, and is part of that company’s nutrient management program.

Cattle are managed totally on foot. The cattle, which are gentle as lambs, come when called and seem to know when it is time to move to a new cell. Ken Schaus walks pastures several times a week.

WHEN THE SMOKE CLEARED
Intent on making sound business decisions, the company had put together a professional management team consisting of the company’s accountant, lawyer, banker and Wally and Ken Schaus. They met often, evaluating every move that the company made; trying to keep abreast of the complex group businesses the family had amassed.

On May 13, 2003, the Schaus family got together for Ken’s 37th birthday. As they celebrated, they visited about the state of their various enterprises. With close to 29,000 head of cattle in inventory, there were 6,000 head of black cattle, fed for the U.S. market, three weeks from finish and under contract. Pastures were full of stocker cattle and 18 trucks were ready to take dairy heifers to New Mexico. A new facility had been purchased as a site for truck maintenance and upkeep, and eight new cattle trailers were on order. The company had 11,000 head of cattle on feed in feedlots in the U.S. All was right with the world.

On May 20 the axe fell. The first case of BSE was identified in Alberta and all hell broke loose. The Canadian border closed. At first, it seemed that it would be a two- to three-week closure. Three different times, the Canadian industry was told the border would open. Two years later, Canadian live cattle are still banned from the U.S.

“They kept telling us it had to be scientifically proven [that Canadian cattle pose no heath risk] and it has been,” Schaus said. “Now it has more to do with politics, not with cattle or BSE.”

The border closure has had longstanding impacts on the Schauses and the country as a whole.

The first hit Schaus took was selling his finished cattle that had been contracted in the U.S. “We literally had to eat them,” Schaus said. “When the check on finished cattle does not cover the feed bill, you know you’re in trouble.”

“Since we’re an exporter, it was hard to get them killed locally,” Ken Schaus said. “We had been competing with those processors for years and they were old enemies. It was hard to get them to do business with us. Finished cattle went from $95 per cwt. to $25 Canadian.”

All in all, the Schaus family lost millions of dollars in equity. Ironically, it was the 11,000 head on feedyards in the U.S. that saved the company. They brought in good money and kept the cash flow going.

“We were really sorry to see the last of them sell,” Schaus said.

RIPPLE EFFECT
The entire infrastructure of the Canadian cattle industry was affected by the border closure. At the Schaus operation, 26 employees lost their jobs, most forced to move from the area to find work. The fleet of 18 cattle trucks was cut to six.

“Industry suppliers were affected, too,” Ken Schaus said. “Millions of dollars in equity was lost. We know of feed companies with customers who have owed over $100,000 for a year. Farm equipment, feed mills, everyone was impacted.”
So was the local economy in Elmwood, which some jokingly call Deadwood right now. Closures include the general store and bank.

“It was like a factory closing in a town,” said Ken McCloud, a banker. “You try to work with it the best you can, but buying power was affected as well as special loans.”

The Schauses have regrouped and are transitioning from buying 900-lb. cattle fed for 120 to140 days, to buying 375- to 400-lb. animals that can be backgrounded locally on farms, taken to the feedlot at 750 to 800 lbs., and sold in the meat. Their profit and loss statement has gone back to black ink, except for the money stolen from the safe.

Their trucking company also has staged a comeback by doing maintenance and washing trucks for other trucking companies. Schaus is back to buying cattle across Canada.

The major loss, as they see it, is the loss of the next generation in the business. Miles of farmland where small herds of cattle once grazed stands empty since the young adults left.

“Future customers for us are gone,” Schaus said. “Too much equity was lost.”

When the border does finally open, Schaus plans to “wait a little while” before trading across the border.

Meanwhile, the Canadian cattle industry is anxious to see what hearings in July will bring, how strong the packing industry will become in Canada, and how an industry they have dedicated their lives to will recover from what was almost a fatal blow … almost.