2011-10-13 / Local & State

Ephrata Dealer Big In Cattle Exporting

By Paula Holzman
INTELLIGENCER
JOURNAL/LANCASTER NEW ERA

LANCASTER, Pa. (AP) – Ephrata is associated with many things – the Mountain Springs Hotel, the Ephrata Cloister, Doneckers.

Record cattle deals?

Not so much.

But when the largest cattle shipment to ever leave North America set sail last month for Russia, it was an Ephrata-based livestock dealer who had engineered the $12 million deal.

Howard Scarff, 48, runs Scarff Brothers Inc. out of a Civil War-era house on West Main Street.

At any given time, he's typically juggling transactions totaling about 20,000 head, from Manheim to California.

Scarff is the seventh-generation scion of his family's cattle business, a man who started doing deals when he was 14.

He was raised on his family's farm in Fallston, Md., about 45 miles south of Lancaster.

But he made so many trips to the Garden Spot for business, he decided to move here 24 years ago.

In 1987, Scarff and his brother incorporated the company, which buys, sells and keeps cattle as inventory.

Nineteen years later, Scarff bought out his brother and officially moved the business from Maryland to Pennsylvania.

The company once had as many as five employees.

Now, though, it's just Scarff and Dave Heckel, his operations manager.

Much has changed in the decades since Scarff bought his first cows at auction.

The mom-and-pop cattle farmers who used to be at the core of the busineLAss are vanishing, pushed out by behemoth corporations.

Homes and shopping centers are rapidly crowding out Herefords and heifers in Scarff's native Harford County, as well as in Pennsylvania.

Stockyards have closed. Commodity and gas prices have soared. And the Internet has made finding and exploiting market soft spots increasingly a thing of the past.

“It used to be, we'd make pretty good money, a good living, when cattle were cheap and you could trade small numbers each week,” Scarff said.

“Now, it's very competitive, and your margins are slim, so you've got to pump up the volume.

“You used to be able to sell 100 head of cattle; now (you need to sell) 500 head of cattle to be able to realize the same profit. Your margins are so much slimmer, and your expenses are more.”

But this year Scarff also saw a bright spot amid the gloom of $90-per-barrel oil and the ailing dollar – an increasingly strong export market.

Many overseas markets appeared to be heating up, with Russia looking particularly promising.

The country's statesponsored dairy and beef industries had disintegrated after the fall of communism, but its government now was offering healthy incentives for cattle farmers.

So Scarff Brothers decided to get into the export business, partnering with a European company to start sending cattle to Russia.

Scarff Brothers' first such shipment, comprising 1,700 pregnant heifers, set sail from Galveston, Texas, in June.

It was the first time cattle went through that port since the 1960s, Scarff said.

At that point Scarff Brothers also had begun piecing together the deal that, at 5,585 heifers, would become the largest single shipment of cattle to ever leave North America.

“Logistically, it was an incredibly big project,” said Kelly Scarff, Howard’s wife.

Howard Scarff, Heckel, plus a network of agents and buyers paid by Scarff Brothers inspected, bought and took possession of cows across the country, from South Dakota to eastern New York to California.

All the cows were funneled to two feedlots, one in Kansas and another in the panhandle of Oklahoma, for the testing and quarantine required for export.

After that, 140 tractortrailers transported the cows to Galveston. The trucking bill for the deal approached $1.5 million, Scarff said.

There were other vital considerations in moving this inventory across the country.

As Scarff explained, you can't simply put cows on a truck and forget about them in the scorching sun.

Every step of the way, they need adequate food, water, temperature and space.

“We got into July in the Southwest, and the heat was brutal. I was down there a couple of times and it was 116 degrees,” Scarff said.

“You'd work cattle from daylight until about 10 o'- clock, and you'd have to stop because the rest of the day was so oppressive to put the cattle through the chutes, through the testing and the pregnancy exam.”

State and federal inspections awaited the cows before being loaded onto a ship for a 16- day crossing to Novorossisyk, a Russian port on the eastern shore of the Black Sea.

The ship, the Ocean Drover, can handle up to 13,000 pregnant heifers, making it the largest cattle ship that has ever been to the United States, Scarff said.

About the size of a cruise ship docked next to it, the Ocean Drover took on 55 tractor-trailer loads of feed pellets for the journey, he said.

The Australian- owned ship was chartered for the journey by Scarff Brothers' European partner.

But the Ocean Drover's departure was delayed by about a week.

“ There were a lot of things _ little things _ that just held us up,” Scarff said.

And then he started having chest pains.

“The ship was loaded, and the USDA was really having some trouble generating from their computers the identification list on the cattle that needed to get with the health certificates and get stamped and signed ... so the ship could pull out,” Scarff said.

“I guess I hadn't slept for maybe two days, and the next thing I know, I've got a pain in my arm, turning numb and tingling up into my neck, pressure on my chest. My first heart attack was 10 years ago when I was 38. I'm a heart patient. So I'm about to pass out, so I sat down.”

Heckel took him to a local emergency room.

While Scarff was in the hospital, the ship set sail, at about midnight Sept. 21.

Scarff left the hospital 24 hours later to catch a plane ride back home, his blood pressure having returned to normal when the Ocean Drover left the dock.

Despite the hurdles he faced in getting the deal together, Scarff plans on assembling more export deals.

Scarff said he believes exports in the coming years will be “one of the biggest things on our plate. We'll kind of concentrate on that.”

Not all the export transactions have to be as large as 5,585 cows, though.

“I would rather see a ship with 2,000 to 4,000 head and give me a ship every two, three months and keep going like that, rather than see a ship like ( the Ocean Drover) once or twice a year,” he said.

And more ships – and maybe cargo-plane loads – of cows appear to be in the future.

In two months, there's another ship leaving Galveston for Russia with 1,700 cows.

Beyond that, Scarff Brothers' European partner has indicated that as many as six shiploads, and perhaps a few planes, are slated for overseas in 2012.

Scarff and Heckel also have discussed bringing on another employee to hold down the fort in Lancaster County.

The infrastructure to handle the future exports deals is in place, and Scarff said he feels better knowing just what his two-man operation in Ephrata can do.

“You feel like you're a little more experienced now,” he said.

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