Jesse Nelson has a different investor ask from most Idaho startups: He wants them to buy him cows.
As co-owner of American Beef Ranch, a 517-acre spread in Jerome, Nelson and his wife are looking for funding of up to $2 million to buy up to a hundred head of beef cattle, as well as a hundred head of sheep.
“That’s what we’re trying to do, add the animals back in,” Nelson said.
Buying the family farm
While the Nelsons bought the ranch from his grandfather, it was a fairly recent purchase. “My grandpa bought this place in 2000,” he said. But by 2007, he was looking to do something different, and went to “grazing school” to start a grass-fed meat cooperative until the mid 2010s. At that point, he decided to dissolve the partnership, though he still maintains 25-30 steers he sells in the Twin Falls area, he said.
Meanwhile, Nelson and his wife were living in Las Vegas, where they worked in the hotel industry in events and marketing. But then COVID-19 hit in 2020. “We were forced to move somewhere else, because our Las Vegas jobs stopped happening,” he said.
Nelson started working for his cousin, and then purchased the ranch from his grandfather, who was 79 at the time. “It was time for somebody to buy it,” he said. “We wanted to keep it in the family.”
But the land needed improvements in infrastructure such as the irrigation system – 200 acres are irrigated — and to pay for the improvements, the Nelsons sold the livestock already on the ranch. In 2021 and 2022, it ran primarily as a hay operation, though he did buy a heifer and a couple of bulls at the end of 2022. It went from being negative in 2021 to profitable in 2022, he said.
Nelson’s goal is to acquire certified organic bred heifers, who will be first-time mothers, and then raise the calves for two years before butchering them, he said. That way, he has control over the entire lifecycle and can help maintain the quality better, plus it’s cheaper than buying steers each year, he said.
As far as the sheep, they’ll be a different variety called “hair sheep,” which don’t have the traditional wool. “They’re specifically for meat,” Nelson said. “They shed off in the summer.” In addition, they’re smaller and the meat is said to have a milder taste. “If you’re trying to introduce someone to lamb, it’s a much better way to go,” he said.
The purpose of the animals isn’t just to produce meat, but also to restore the soil, a technique known as regenerative farming, Nelson said.
“Conventional agriculture ignores the soil health side,” Nelson said. Traditional “big ag” relies on chemical-based fertilizers, which works for a while, but ends up degrading the soil, removing nutrient transportation and organic material and making it more difficult for the soil to hold onto water.
The way it works is the herd of animals grazes on a small section of ground at a time. “We move them very often, every day,” Nelson said. That’s also a more natural way for herd animals to live, because they were traditionally pushed by predators. “They eat and move and are very compacted in a small space,” he said.
In addition, because the livestock are on a particular patch of ground for only a short time, their hooves aerate the ground rather than compacting it, and their waste is concentrated in that area, Nelson said.
Using regenerative agriculture also helps save money on fertilizer and other chemicals. While it takes time to build the soils, people generally see an increase in yields the first two or three years, Nelson said.
Regenerative agriculture also saves money on labor. “We buy animals that are self-sufficient and don’t need our help much at all,” he said. “If we have an animal that’s not going to survive, we cull it, because it doesn’t fit what we’re going to do.” Animals bred to be grass-fed, instead of raised in feedlots, are smaller and more efficient, he said, and all he and his wife have to do is open the gate and move the fence to give them a new section of grass, he said.
Nelson is hoping to raise $1 million to buy the livestock. “Cattle and sheep are not inexpensive,” he said. In addition, he’s hoping to acquire water rights to another 120 acres of his land, he said.
In addition to the livestock component, Nelson sells fertilizer. “It fell into our laps with a friend of ours,” he said. The company uses chicken manure that is specially processed to hold onto nutrients better, and is a custom blend based on a soil sample to help repair the soil, he said.
The fertilizer company made the Nelsons $120,000-$150,000 in revenue last year, of which they brought home $35,000 and invested it in the ranch, Nelson said. He’s hoping to raise another $1 million for the fertilizer company – of which he’s willing to sell equity shares – so he can store it locally and apply it himself rather than having other people do it, so he can have more control, he said.
As with any startup, Nelson is working on arranging financing, which is somewhat more complex due to his business. While his grandfather gave him a good price, he couldn’t really use traditional financing because of the nature of grass-fed finished beef and cash flow. “We didn’t know anything about credit,” he said, nor did they have a cosigner.
The ranch is pretty much maxed out on hay production, and raising cattle and sheep could increase the ranch’s gross from its current $200,000 to $600,000, while only increasing its expenses by 50%. Nelson is also hoping to raise the funding pretty quickly because of the animals’ lifecycle. “If we don’t get them soon, we would lose a year of production,” he said.
Consequently, the Nelsons are looking for an investor, he said. “I’m willing to have a conversation with anyone,” he said.
Written by Sharon Fisher, a digital nomad who writes about entrepreneurship.