Parker Ranch is looking to increase its production of grass-fed beef for local consumption.

The Hawaii island ranch now sends most of its cattle for slaughter to mainland feed lots, which can fatten the cattle at a lower cost.

Parker Ranch, one of the largest cattle ranches in the United States, has teamed with Ulupono Initiative, a social investment firm funded by eBay founder Pierre Omidyar, to finance research on making cattle raising more economical in the islands.

The trial project will test ways to improve grass production and more efficiently manage the movement of cattle to lower the costs of raising herds in Hawaii. The project will start with 200 head of cattle on 300 acres from September through May.

If successful, the ranch said its local grass-fed beef program could reach 2,500 to 4,000 head per year in annual production with its existing pasture.

The ranch ships about 5,000 head of cattle to mainland feed lots per year. The costs of shipping has been rising with the increasing cost of fuel, said Nahua Guilloz, senior manager at the ranch.

Producing more grass-fed beef for local markets would give the ranch "a strategic hedge within our business against the risk of rising energy prices," said Dutch Kuyper, CEO of Parker Ranch, in a news release. "This local product strategy should ensure that we have the capacity to produce high quality and consistent market cattle in Hawaii at a competitive price."

Kyle Datta, Ulupono general partner, said surveys show Hawaii consumers would buy grass-fed, local beef if it is the same price as mainland beef.

If Parker Ranch can do it, other Hawaii ranches will follow, Datta said.

"Parker Ranch’s leadership is essential to help inspire other Hawaii ranchers to consider grass-fed as an option," Datta said. "As more ranchers adopt grass-fed methods, we believe the tangible benefit will be an increase in the availability of high-quality local beef that everyone can afford."

Demand is growing for grass-fed beef, Guilloz said. She said she gets one or two calls a week from buyers looking for grass-fed beef. Most are from local restaurants or hotels.

In addition to bringing down the cost of raising cattle, the capacity of the Paauilo slaughterhouse on the Big Isles will have to increase if the state is to process more local cattle, Guilloz said.

The state allocated $4.15 million in February to improve the slaughterhouse, according to West Hawaii Today.