The Hawaii Beef Industry: Situation and Outlook Update

The purpose of this report is to present qualitative and quantitative information on the situation and outlook for the Hawaii beef industry. Since 1986, Hawaii’s market share of the local beef market has decreased from about 30 percent to less than 10 percent. Hawaii cannot com­ pete in the production of grain-finished beef from the mainland USA because of the high cost of inputs here. Currently about three-quarters of all cattle marketed in Hawaii are exported to be finished and marketed in North America. Transportation costs and other challenges as­ sociated with shipping live animals may make export­ ing a less attractive marketing option in the future. Shipping feeders remains the preferred option for many ranchers, particularly for the larger producers, because the local price is less than the price on the Main­ land. Those retaining ownership on the Mainland gen­ erally get a better return than those selling at the ranch to out-of-state buyers. Producers do not forage-finish more cattle for the local market for the following reasons. First, the for­ age-finished market cannot absorb the quantity of calves that producers would offer for sale at various times of the year. Secondly, forage-finishing a calf would require 24–30 months of pasture space that could be used to support a cow/calf unit that would return higher profits. Third, the climate may limit the producers’ ability to grow forage. Lastly, many producers need the cash flow generated by sales and cannot wait the extra time re­ quired to finish the animal. The cull cows and bulls, however, are sold locally, because the animals cost 46 percent more to ship full grown. Small producers are generally more willing to ac­ cept the lower prices being offered locally for cattle. They also may have more flexibility when it comes to feeding an animal in their pastures after it is weaned. Many have off-farm incomes that increase their ability to adjust to inconsistencies in yield. The wide range in management styles has contrib­ uted to a lack of cohesiveness and cooperation among cattle producers across the state. However, some pro­ ducer groups and individual producers have developed management protocols in efforts to capture a larger share of the local market that have proven successful. Coop­ eration was required to obtain a consistent supply of high-quality cattle for the local market. Producers were able to gain more power in the local market place by acting in a unified manner. Because shipping nearly doubles the cost of im­ ported feed, many people in Hawaii, including employ­ ees of CTAHR and other agencies as well as private­ sector ranches and companies, have been looking for a more economical means of finishing cattle. Examples of ideas considered include the use of energy-enhanced roughage, locally grown corn, and various forage grasses and legumes. While some information about the nutri­ tional effectiveness of these potential feeds or feed supplements is available, no comprehensive compara­ tive economic analysis of the many finishing alterna­ tives has been completed. This information void makes it difficult for producers interested in the local market to evaluate the alternatives. The high yield variability associated with finishing cattle on range forage may make feedlots one of the key components for an increase in market share. The state has only one feedlot, located on Maui. The island of Hawaii has a site that has some of the facilities needed to operate a feedlot, but these facilities are currently