A double-edged knife: Missoula knife company purchases sale barn; keeps cattle moving
The closure of an ag-based business normally emits a melancholy note to the industry; a reminder of the challenges of viability to farmers and ranchers.
In the case of the Missoula, Mont., livestock sale barn, a gate may have swung closed for the last time, but a proverbial window is opening.
Josh Smith of Frenchtown, Mont., owner of Montana Knife Company purchased the 27-acre property west of Missoula, Mont., that was formerly the Five Valleys Livestock Auction last spring. The final livestock sale was held in May, and on June 1, he started construction of a new 50,000 square-foot facility to house his booming knife production company.
The loss of a sale barn is a detriment to the industry, yet many factors are in play. Real estate in the Missoula area, especially post-COVID, has transitioned quickly from agriculture uses to housing developments and recreational property. There simply aren’t as many cattle in the area as there used to be, say locals.
Justin Iverson is a rancher from Potomac, 20 miles east of Missoula in the Blackfoot Valley. “It’s tough that we lost our sale barn, but I understand that barns close,” he says. “There aren’t that many cattle produced in Western Montana anymore, we are losing a lot of our ag land to homes. If it was a good money maker to stay as a stockyard, it would have. It was a business deal.”
Iverson says the closure of the sale barn has left producers from a widespread region, including himself, in a lurch. He used to work the auction on sale days and said ranchers from the Bitterroot all the way to Libby (in the northwest corner of Montana) and into Idaho brought cattle.
“We absolutely used the sale barn; we went there with calves that didn’t make the truck, cull cows, open cows – that was our closest opportunity to get them to a sale,” he says.
Yet, the numbers speak.
A good fall run would be around 800 head a day, and there were days when only 10 head were consigned and the sale would cancel. The former stockyard is prime real estate at the intersection of two main interstate highways, in the burgeoning western Montana market.
Smith recognizes the impact of the change. He is made of the fabric of hard-working, rural America.
“A lot of my family still ranches and farms and I know how disappointing it is when pieces of our heritage – and what I think is our country’s most important industry, our food industry – go out of business,” says Smith. “The landscape changes.”
Growing up in nearby Lincoln, Mont., Smith started making knives at 11 years old with his Little League baseball coach. He made two samples for his school science fair; his math teacher and his science teacher each bought one for $20. He then used his lawnmowing business earnings to buy his first belt grinder and started making knives in his dad’s garage. “I was kind of making a mess in my dad’s shop, and he said, ‘You need your own space.'” So his dad helped him build his own knife-making shop when he was 13. He joined the American Bladesmith Society at 15 and soon passed his journeyman bladesmith test.
At 19, Smith tested for his master bladesmith rating in the society – recognized upon those possessing the highest skill levels in the craft. Currently there are only 117 individuals in the world holding this rating. The test involved cutting a 1-inch rope and two 2″x 4″ boards, bending the knife in a vice to 90 degrees without breaking, and presenting five handmade knives to a panel of judges. He passed and became the youngest master bladesmith in the society’s history.
Smith enrolled in construction engineering at Montana State University after high school. In addition to sanding on knives in his dorm room any chance he could, “I also basically duck-hunted my way right out of college,” he says with a laugh.
Over the next decade Smith went to work in the excavation and construction business, got married, and became a father to four kids. During this time he was able to quit his paid job and strictly made knives – one at a time – for a living for around eight years. In 2008 he watched the economy crash and his backlog of orders dissipate. He went back to work at Northwestern Energy, where he ultimately became a journeyman lineman.
During the time he was a lineman he went through a divorce, had his house blow up due to a propane leak, and got remarried.
Smith had registered the name Montana Knife Company as a Montana business when he was 19. The dream took him 20 years to get back to. “In 2019 I was still making knives and my wife, Jessica, really encouraged me to pursue this business,” he says. “I built some prototypes and we launched the company.” He met his business partner, Brandon Horoho, and offered him partnership in Montana Knife Company in the fall of 2020.
Once Horoho joined the momentum built – it was time to go all in. Smith left his work as a lineman in December of 2020 and they put everything into the company. “It was go big or go home,” he says.
“Our success has been incredible, pushed by amazing supporters and customers and social media,” he says.
They never borrowed any money nor took a paycheck for several months as they grew their numbers and reinvested in the company. They hired several high school kids and Smith returned to his roots – once again building knives out of his garage. They built a new shop on Smith’s private property in 2023 as their employee base grew.
“It soon became very apparent that it wasn’t going to work having 75 people reporting for work every day in my pasture,” he says. They started looking for property.
“I’m a smalltown guy, and frankly, I would have preferred to stay in Frenchtown,” he says. But regulations on sewer and water didn’t allow that. When they looked at the former sale barn site they saw potential in the manure storage grounds. “There was a ton of unused ground here,” he says.
Smith hesitated on the fact that he knew his purchase would mean the end of the stockyards. “I asked a couple of local ranchers, ‘If I buy this am I going to get ran out of town?’ They told me, ‘Man, that thing’s been struggling for years, we’ve known it’s going to sell, probably going to become a Walmart or a hotel or Amazon. At least if a local buys it stays somewhat local.'”
Smith still recognized the void the change could create. His own kids had sold surplus 4-H heifers through the sale barn.
He talked to the owners at the Montana Livestock Auction in Ramsay, Mont., 111 miles away. “We figured out we could turn it into a receiving yard, and those cattle that would normally come here could get picked up and go to Ramsey,” Smith says.
The receiving station is not a money-maker by any means. Many would view it as a liability.
“There is no benefit to me, it’s only a public benefit,” says Smith. “That’s why we did it. I’m only doing it because we’re neighbors with these people. I truly want to give them a place to drop off cattle. Any other big corporation would just shut that down.”
Iverson acknowledges the pro-ag and rural values approach that Montana Knife Company bring to the area. “I appreciate that they are continuing to work with local producers to have that receiving station,” he says. “They could have easily shut that down and said liability is too much, but they are doing their best to make a best-case situation out of a tough scenario.”
Cassidy Brunner, office manager at Montana Livestock Auction, says since June they have transported a couple hundred head each month from the Missoula yards. The cost is minimal to producers, just $2.20 per hundredweight. “So for a 1,000 cow, it costs $20 to get it here; you can’t drive it yourself for that,” she says. Brunner says the transition has gone as smoothly as possible, and it appears most people are very happy that the situation is as good as can be, given the closure. “We’ve heard lots of praises that [Montana Knife Company] has left the facility open to service that part of Montana. It’s been very helpful to the ranchers in that region.”
Smith says he’s also proud of the fact that they are converting a location that formerly had just two full-time, low-wage employees on staff into a business that will ultimately employ 250 local people with high-paying, full-benefit jobs. “Our starting wage is $22 an hour; that’s for a 19-year-old kid, and he’s getting a benefit package and insurance.”
Sales of Montana Knife Company are 90 percent out of state, which is bringing new money into the state economy. “In many small towns we count on our neighbor for our income, and we are just circulating the same dollars back and forth,” Smith says. “A business like ours influxes millions of dollars from out of state. It’s new money and truly a benefit to the community.”
The former sale ring building remains – it now houses a sector of the operations. The mechanic shop has become a Swiss lathe production area to make screws for the company. The newly constructed main operations building will house a retail area and production viewing café, which Smith plans to also make available for community events.
In the meantime, Montana Knife Company will continue to support its salt of the earth customers: sportsmen, cattlemen, rodeo, and 4-H and FFA.
“We’re glad we can accomplish our goals and still benefit ranchers,” Smith says.
Iverson says ranchers will get creative and find different solutions to market their cattle. Area truckers are already reaching out to put together combined loads to run to Great Falls or Butte. Iverson, his family and business partner are putting more time into selling their beef directly to consumers (they have a Montanan meat depot license) and are holding onto their cull cows for processing, possibly working with a local senior center through a charitable meat processing program in central Montana.
“We’ll figure it out; ranchers always do,” he says. “Maybe it will change the way people market their cattle and get more local beef into local mouths. It’s always easy to just dump them off and get that check in a few days. Maybe this will force us to make changes.”
