FARMINGTON — South of town at the Navajo Agricultural Products Industry feedlot, 10,000 cattle owned by a Brazilian company roam in fenced pens, eating corn that is harvested nearby.
The cattle are there as the result of a leasing agreement with JBS of Sao Paulo, Brazil, only one of several international business deals for NAPI, the Navajo Nation's for-profit agricultural enterprise.
NAPI recently inked a contract with a Washington company to export 10,000 tons of hay to Japan. And, NAPI ships pinto beans to Mexico through third parties.
"We're competing with our contracts internationally today," said Tsosie Lewis, CEO of NAPI.
The feedlot serves as an example of an international deal at work in Farmington's backyard. NAPI leases the feedlot to JBS, a major international meat producer.
"Our thought was, maybe let's go a little further beyond the borders of New Mexico," Lewis said. The end goal, he said, was the pursuit of "bigger numbers and larger players."
JBS was attracted by the location, near the company's Phoenix-area packing plant and the Four Corners' ample supply of cattle, spokesman Chandler Keys said. "You've got a combination of cattle, corn and water," he said.
The feedlot uses NAPI corn. Keys said the presence of the corn is critical to JBS' presence at NAPI. "That place wouldn't work without the corn right there."
In other international business deals, NAPI ships its pinto beans to Mexico through third parties via ports in Las Cruces and El Paso, Texas.
NAPI in April reached an agreement with Anderson Hay & Grain of Ellensburg, Wash., to export hay to Japan, where it is used by dairy farmers.
"We struck a chord with them simply looking at other opportunities, and we found that they were very much interested in us," Lewis said.
"It poses a great opportunity to use our water, our land and our labor to produce hay," he said.
Mark Anderson, CEO and president of Anderson Hay & Grain, said he had been in discussion with NAPI for some time before a deal was struck.
"It seemed like the timing was right for them to look at an export opportunity to diversify their farm product, and it made sense to put something together," he said. "We're real excited about it."
NAPI's feedlot deal with JBS came about through a mutual relationship with Key Bank. The project is in a trial stage, Lewis said. He would not disclose the value of the lease.
"If it's successful for NAPI as well as JBS, the thinking was we'd talk about a bigger yard," he said.
A larger feedlot would be contingent on receiving federal funding to expand corn growing into three undeveloped blocks of land totaling 30,000 acres. However, federal funding has been trending downward to $4 million this year, a significant drop from $24 million a few years ago.
"This year, we got hit pretty hard," Lewis said.
Expanding into all three blocks would cost about $500 million and take years, Lewis said.
To back its bid for more federal funding, NAPI has gained support in official resolutions approved by the Farmington City Council, the San Juan County Commission and the San Juan Economic Development Service.
"We want to take the opportunity since we do have agricultural water here to expand," Lewis said.
NAPI is fed by water from Navajo Dam as part of federal agreements dating to the 1960s. Engineers calibrate every day how much water the fields need.
Not all of NAPI's international contracts have met with success. In 2007, NAPI announced a $137,000 contract to sell pinto and black beans to Alimport, Cuba's state food processing agency. The much-touted agreement came about because the Navajo Nation is not bound by the U.S. embargo that restricts trade with Cuba.
But a Chinese competitor underbid NAPI, and Alimport reneged on its agreement with the Navajo company.
"Of course, there's no way to enforce a contract with somebody from Cuba," Lewis said. "We kind of got left holding the bag, in a sense."
NAPI has made no further attempts to trade with Cuba. Nevertheless, NAPI has had success with international trade on most fronts.
"The ability to do business with other companies outside the United States will only bring more jobs here," said Lewis, who added that the 27,000-square-mile Navajo Nation, one of the most poverty-stricken areas of the nation, has a 65-percent unemployment rate.
"Our task is to provide employment, so we like to pursue contracts that do bring jobs here to produce a Navajo product to export to other countries."
Chuck Slothower: firstname.lastname@example.org