Saturday, April 26, 2014

Are you prepared for the “local” beef market premium?

The National Restaurant Association recently surveyed 1400 chefs.     The following are the three top trends for 2014:           Locally sourced meat  (and seafood, dependent on location)
                                    Locally grown produce  (the CSA concept is getting larger)
                                   Environmental sustainability  (how raised, how cooked, how served)
You will note nothing in here overtly says “certified organic”.    Clearly, beyond those consumers who are environmental activists, most are just interested in knowing their food has not traveled the world for weeks or months before landing on their plate, and it is not overtly irradiated or chemicalized as a result of its long distance origins.

Can we capitalize on these trends?

Those of you who came up in the 4H world know that the post-show livestock auction has proven to be a great way to demonstrate local support for local livestock production.    Beyond those agri business owners you see bidding at their local fair, you discover others who may remember hanging out at their grandfather’s farm and grew up with respect for the hard working local farmer.

There is a concept out there in the consumer world that farming has become the captive of international corporations who are gobbling up the land once owned by family farmers.    The truth is that most farm land remains in private family-unit ownerships, just not as many total farmers as before—farm sizes are larger than before, in part because planting and harvesting is more mechanized and has larger capacity than the equipment Grandpa used.

The key difference today is that the diversity of animal species you see at the county fair can no longer be found on most farms.   Outside of “organic” or “4H” or “CSA” (community supported agriculture) farms, most of us are pretty monocultural, at most two species of animals (eg, beef and poultry) are on the farm in economic numbers.

The auction market system exists because most of us do not believe the local community has the processing capacity and consumption demand to “swallow” our volume of yields.
In the case of beef, however, when as recently as 2005 the national cow herd only averaged 18 cows per farm (usually the second focus of the farm rather than the first), our perception does not fit reality.

Is the commercial market system for meat animals doing its job?
Americans are the world’s greatest carnivores.    Annual meat consumption is 270 pounds per person, only tiny Luxembourg in central Europe eats more meat than we do annually.     Cattle were integral to the economic expansion across the American continents, with first sheep, then dairy, then beef adding up to major industries alongside the more traditional hog and poultry production that came from those early European ancestors’ traditions and never developed volume farm production until after WW II. 

Cattle could use land that needed to stay in grass (land that row crops would-- and did-- erode into the mighty Mississippi and other rivers that drained the continent).    Thus our commercial scale ranching devolved into the south and the west, away from the cities, the areas where soils were deep and fertile enough to be desirable to the cash crop, vegetable and dairy industries who wanted more return per acre and had a more intensively managed production system than cattle ranching requires.

(Is the commercial market system doing its job?   Page two)

Then the commercial beef market grew into a major user and promoter of the uniquely American corn grain crop, and over time this moved momma cows off ranges and into drylots, and their feeder calves into feedlots, leading to higher cost commercial beef production.    Cattle grading (to establish premium price scales) developed on the basis of how a “corn finished carcass” looked.    If not for the “fast food” industry’s capitalization on ground beef and hot dogs, which brought the surplus dairy cow population into a significant share of the meat eater’s diet, today the quality cuts beef case in any meat market is a place that only restauranteurs and higher income people shop.    

Beef consumption plateaued for three reasons:   (1) changing consumer attitudes toward “fat” consumption;  (2) promotion of different meat species outside of their ethnic roots;  (3) rising prices for premium cuts, defined on the production rather than the consumption side of the table, reducing their frequency of consumption.    

This means a committed Beef producer must question whether the established patterns and channels in beef marketing may be working against us, for example, grading and pricing the leaner, breed specific beef that still has good flavor and eating character lower than the white fat laden corn-fed “prime” and “choice” cuts from feedlot Holsteins that require mechanical tenderization to be edible.

Let’s be clear on this.    It is the consumer that is deciding what beef it will buy – not the commercial packer and the industrial scale market chain, that has turned beef into a commodity based industry, in which there is more concern for carcass size (“I want the biggest steers hanging on our hooks”) than there is for food quality (“I want the steer who was fed in the way that makes the best beef, regardless of size or age”).

Integrate your farming and your beef production

The cattleman who is willing to analyze every step of his farm operation and evaluate how the product he produces will be received by a knowledgeable consumer (who knows, for example, that digestible fiber in grass produces a different fatty acid structure than digestible starch in grain, and one proves to be healthier than the other once the cattle feed product reaches the table as human food) will find the option of producing beef for a direct-purchase local market a potential income booster. 

The trick in this chain of decisions is (a) can I produce cow-calf feed cheaper per acre than I do now, (b) will my reproduction be sounder if I change the mix of feeds away from all high-input sources, (c) is it possible that the right choices in boosting feed production will also boost beef harvest quality, (d) am I working with the right breed or bloodline genetics to optimize beef quality on the local market standard?

We have a national Cow-calf herd that is no larger than we had in 1954—sixty years ago.    Yet we are producing food for 100 million more Americans than lived here sixty years ago.     At the national level of meat consumption, this tells us there has been a great shift in favor of “white meat” and “ethnic link” meat species.     However, the corn dependency of the evolved white meat (pork and poultry) species is eliminating the price advantage these used to have against beef.     Thus it is time for beef producers to challenge the beef industry status quo and produce some new beef options for consumers that will also prove profitable to raise on the farm, and help maintain the fertility of our land while retaining the rural landscape in beef production that appeals to the consumer willing to pay a premium price for “local”. 

We sell beef genetics at both ends (what the cow eats) (what people want)

Not only do we provide access to the bulls that meet your cows’ fancy, we provide access to the forage seeds that are revolutionizing the variety and quality of beef that reaches the consumers’ table.   

The majority of beef breeds have genetic encoding for grazing.   Improving our pastures, lowering the acidity of our stored feeds (less dependency on grain silage or high moisture grain) all have an impact on reproduction as well as quality of beef.

Keeping it straight in our head that some of our matings need to produce “maternal line” replacements (not breeding 100% of the cows to steer maker bulls) can return some vigor to your reproduction and live calf production as well.

Mich Livestock Service Inc         “For the best in bulls”        “For the best in forages”

Phone TOLL FREE (800) 359-1693    or any of the representative listed inside with cell phone numbers

1 comment:

  1. Well stated Greg. A comprehensive, well considered analysis and conclusion.