Japanese Firm Pulls Up Stakes at Paradise Valley Cattle Feedlot

After two years of legal hassles and complaints from local residents, a Japanese-owned cattle feedlot in Paradise Valley, near the Riverside County line, rounded up its last 50 calves and closed its doors for good Wednesday.

With hopes to fatten, slaughter and ship high-quality black cattle to beef-starved and land-poor Japan, American First Beef, an Escondido-based company, instead was stalled by orders to stop polluting the isolated valley north of Warner Springs.

Neighbors, some living not more than 600 feet from the 38-acre feedlot, said they complained to regulatory and elected officials because they feared the clustering of thousands of 1,800-pound cattle in pens would bring noise, dust and flies to their pristine countryside.

The state was more concerned about the potential of cattle manure contaminating surface and ground water, which is used by residents in Paradise Valley as drinking water, officials said, comparing the cattle waste to a toxic spill.

“We got the permits the county told us we needed, but then the water board told us they would fine us for our cattle going to the bathroom on the ground,” the feedlot’s general manager Dan Winne said.

He said that, since the feedlot opened in August, 1988, the Regional Water Quality Control Board has threatened to impose nearly $50 million in fines, primarily for failing to obtain a federal waste-discharge permit.

The company opened the ranch, one of the first of its kind in the United States, hoping to process 100,000 head of Black Baldie cattle a year. The goal was to capture a piece of the Japanese beef market when import restrictions and heavy tariffs on beef imports are lifted in May of next year.

Winne said Japanese investors chose Paradise Valley for its mild weather when they decided to mass-produce in America, and thus sell their Kobe-style beef at a fraction of the cost of doing so on their small homeland island.

Kristin Wirtz, a water resource control engineer with the water board, said the board is still negotiating with the cattle raisers and has only imposed a $15,000 fine on the company for not submitting ground-water monitoring proposals.

“They had cattle there that produced lots of manure. Our concern is that the manure contains nitrates that can leach down into the ground water and contaminate the water supply,” Wirtz said.

But Winne said American First Beef conducted a $100,000 study showing that the company scraped and hauled all manure off the land, and that any contaminated runoff water was collected in a specially designed clay-sealed pond built on the property.

“Anyway, we were giving away the manure to farmers in the area for fertilizer, and they were spreading it on the ground,” Winne said. “What’s the difference, since their land is over the same ground-water basin?”

Although the water board was also concerned about the feedlot polluting Temecula Creek and the San Luis Rey River, situated about 1,000 feet from the ranch, Winne said contaminated water never left the property.

“We’ve been unfairly hassled so much by different agencies and tied up in political red tape, it just wasn’t worth it anymore,” Winne said. “It became economically infeasible for us to do business in San Diego County.”

He said throughout the two-year debate that the Japanese-owned company was discriminated against and, as the only feedlot in the county, was forced to comply with stringent regulations not imposed on dairies, chicken farms and other agricultural ventures.

Winne said the 16 Japanese investors who opened the $8-million enterprise have already returned to Japan. The Escondido packing house they bought was closed in May, and both the feedlot and Escondido property are up for sale. Winne said the Japanese investors will probably lose up to $7 million on the venture.

Although American First Beef had contracted to buy 5,000 cattle last year to add to its 1,287-herd, an urgency ordinance adopted by the county limited the feedlot to about 1,200 head of cattle, a move that Winne said was aimed at keeping American First Beef from expanding.

Winne, 43, who has been in the farming business since he was a boy in Imperial Valley, said the feedlot only slaughtered about 1,000 cattle over the past two years, not the 200,000 it wanted. It sold the prime beef to Japanese businesses for prices ranging from $8 to $100 a pound.

The beef, which is often compared to Japan’s top-grade Kobe beef that sells for about $167 a pound, is more tender and tastier than regular American beef, Winne said. He said ranch workers pampered the cattle, since they weren’t allowed to herd them with horses or yell at them.

Winne said the cattle were even occasionally massaged. The Japanese practice of “gentling,” or petting and soothing the cattle, is one of the secret techniques used to produce top-grade beef.

The Japanese also wait three to four years before slaughtering, rather than the American standard of 13 months to two years. The cattle were even fed a secret high-protein feed to bulk them up to the size the Japanese wanted.

Winne said cheaper beef imports from Australia and America had previously flopped in Japan, but the Paradise Valley meat that American First Beef sold at premium prices appeared to satisfy the Japanese palate.

Although neighbors complained about the concentration of animals in the feedlot’s small pens, Winne said the Japanese had developed husbandry methods that reduced the noise and smell of cattle.