SPRINGER FARMS MURRAY GRE
Well-known member
Grass-fed Beef Grows
By Suzanne Bopp
March 16, 2006
It's only been for 50 years or so that cattle have been going into feedlots to finish out their lives eating corn, but the process has become an assumption in the production chain. Now, more and more consumers are asking producers to go back to the old ways.
In Lakeview, Ore., rancher Pete Talbott is responding to that request by starting to sell grass-fed beef. It's still a small portion of his operation??—??last year he sold 12 or 13 head??—??and so far his business is only the result of word-of-mouth advertising, but it has proved profitable and he intends to grow it as long as that holds true. He sells animals, not meat, and since most customers don't want the whole animal, he can have 30 different customers for those animals, which makes his operations somewhat complicated. He facilitates the slaughter at a custom shop that is not federally inspected and delivers the frozen meat to his customers. With the plant four hours away and customers in Portland or the Bay area, it's a time-consuming endeavor.
"The majority of them have not bought beef this way before, so you have to kind of hold their hand," Talbott says. But he was able to get $1.25 per pound live last year, while the fed market was in the 90s; this year his price will be closer to $1.30.
Production considerations
Getting into grass-fed production does require some consideration of genetics; not every animal will finish well on grass. Their size, efficiency and the kind of carcass they'll produce matter. "How well the animal marbles and lays down fat is still important," says Glenn Nader, livestock and natural resources farm adviser for California State University. "You need to select for cattle that are moderate in terms of frame." In other words, typical Midwest feedlot cattle don't work, but more old-style cattle??—??fast-maturing and small-framed??—??do. "Those cattle work best on a low-input operation, whether or not they're finished on grass," says California grass-fed producer Joe Morris.
Talbott also went that direction in his breeding program but was going to do that in any case; his cows were getting too big to be profitable. Because he's selling whole animals, the large frames resulted in too much meat for most customers, even if they were only buying halves or quarters. The smaller animal suits that purpose better. Some producers are ultrasounding calves at weaning to determine which will go in their grass-fed program.
Even with the right kind of animals, it's more than just turning cattle out on pasture. "You have to pay attention to the quality of the forage available," Nader says. Talbott makes sure to save some high-quality forage for his grass-fed animals so they get the cream of the crop. There is an issue of seasonality with forages, too. "A lot of producers are trying to establish irrigated pastures to have grass year-round," Nader says. "But it tends to be a seasonal product. You have to develop a market that is seasonal, or harvest a lot of feed and feed them that." Or sell frozen meat, as Talbott does.
Darrell Wood, a rancher in northern California who started Western Grasslands Beef in late 1999, tried something different. He addressed both the seasonality issue and the consistency issue??—??grass-fed beef can take on different tastes depending on what they graze before harvest. He knew if he wanted to deliver a fresh product year-round, he needed a protocol, so he began backgrounding cattle up to 30 days in a hay lot. Western Grasslands Beef now has cattle coming into the program from Washington, Oregon, Nevada and Idaho. Wood says the people who put their cattle into his program to sell but want to retain ownership get 40 cents to 50 cents per pound on the carcass over Choice-carcass prices pretty consistently.
The changes Wood made to his cattle, which are at least 51 percent Angus, came not so much in their genetic makeup as in the attention he started paying to genetics, EPDs and performance. The results of that were that conception rates went up 10 percent and weaning weights went up 150 pounds per head.
"When you start raising cattle through their whole lives, you start seeing the inconsistencies," Wood says. "You start seeing how some carcasses ring the bell and some cost you a lot of money. Getting rid of poor producers, along with analyzing the nutritional end of things, moving to a high-end mineral program made a difference. After a year or two, the premiums on grass-fed made us wonder why we hadn't started earlier."
The biggest management change may be in simply keeping cattle longer than normal and having the investment in the animal over a longer period of time, but it's not much different from retaining ownership in the feedlot.
Marketing changes
The marketing and distribution of product becomes something to consider for the first time for many producers. "Once they start selling grass-fed, they're selling a product," Nader says. So it helps to have some skill and interest in marketing that product. One rancher told Nader he felt like he'd earned an MBA by selling grass-fed beef.
Unless you sell your cattle to a company like Western Grasslands to sell the product, you will have the cost and logistics of issues such as packaging and labeling; inherent in that is more cost. Inventory management can become a problem??—??what if someone wants to buy the primals but not hamburger? It's very important to have that plan in place before you start to harvest, Wood says, as he learned through experience.
"We go out and do cold calls on restaurants and supermarkets; we have a PowerPoint presentation ready," he says. He explains to retailers how his product enhances commodity beef, rather than competing with it. It allows retailers to reach out to customers who don't want to buy commodity beef but who shop in their store.
It helps to be close to an area with a high concentration of those customers with high disposable incomes who are willing to invest in food products, Nader says. They tend to be concentrated in urban areas. It also helps to be close to a processing plant, ideally, a USDA plant.
It was that opportunity for direct marketing to the consumer, directly from grass, that attracted Morris to operate the way he does. "There is a gap between a rancher and his neighbor," he says. "I wanted to cultivate that relationship." He sends a newsletter to about 600 people; about half of them will place orders for whole animals or a fraction thereof. "We do devote a lot of time to our market and talking to people. Direct marketing is a niche way of marketing," Morris says. "That will never be the norm."
His premiums are a result of the direct marketing, more than the production. He estimates he devotes about $150 per head in marketing to each animal, but when fed-cattle prices are in the upper 80s, he'll get about $1.30 live weight, and his business is growing by about 20 percent per year.
Still, the majority of consumers in this country are grain-fed oriented and not frequently exposed to grass-fed beef. "There's no denying the production problems. They don't get as fat as fast; they're tougher because they're a little older," Nader says. "That provides a challenge: to fatten animals and get the quality needed for purchases on a return basis. They might buy it once, but you have to get it right or customers will leave you."
In addition, the feedlot system we use today is efficient for beef production. "It takes less land base the way the system is designed," Nader says. "We could not go back and produce the amount of beef we produce today."
The future
How big can grass-fed beef become? "It will always be a small portion of production, but it's rapidly expanding," Nader says. "Those (who get) in early will be those who will control it."
But others disagree about that assessment and point to the organic- and natural-foods category; the same thing was said of those, but sales continue to climb.
In fact, Morris thinks grass-fed beef, or at least forage-fed, can become the norm. "I think it's reactionary to say it's a niche and always will be," Morris says. The industry structure could remain the same, with those who specialize in finishing animals doing that with grass or forage. "We could produce every bit as much beef as we do now," he says. "We don't know how to grow grass year-round, but we could figure it out." It might mean moving cattle around the country with the seasons, but he can see the possibilities for a grass-fed future.
Yet another reason to go back to the older basic breeds and crosses (like the Murray Grey, which is angus/shorthorn),that do exceptionally well on grass!
;-) :cboy:
By Suzanne Bopp
March 16, 2006
It's only been for 50 years or so that cattle have been going into feedlots to finish out their lives eating corn, but the process has become an assumption in the production chain. Now, more and more consumers are asking producers to go back to the old ways.
In Lakeview, Ore., rancher Pete Talbott is responding to that request by starting to sell grass-fed beef. It's still a small portion of his operation??—??last year he sold 12 or 13 head??—??and so far his business is only the result of word-of-mouth advertising, but it has proved profitable and he intends to grow it as long as that holds true. He sells animals, not meat, and since most customers don't want the whole animal, he can have 30 different customers for those animals, which makes his operations somewhat complicated. He facilitates the slaughter at a custom shop that is not federally inspected and delivers the frozen meat to his customers. With the plant four hours away and customers in Portland or the Bay area, it's a time-consuming endeavor.
"The majority of them have not bought beef this way before, so you have to kind of hold their hand," Talbott says. But he was able to get $1.25 per pound live last year, while the fed market was in the 90s; this year his price will be closer to $1.30.
Production considerations
Getting into grass-fed production does require some consideration of genetics; not every animal will finish well on grass. Their size, efficiency and the kind of carcass they'll produce matter. "How well the animal marbles and lays down fat is still important," says Glenn Nader, livestock and natural resources farm adviser for California State University. "You need to select for cattle that are moderate in terms of frame." In other words, typical Midwest feedlot cattle don't work, but more old-style cattle??—??fast-maturing and small-framed??—??do. "Those cattle work best on a low-input operation, whether or not they're finished on grass," says California grass-fed producer Joe Morris.
Talbott also went that direction in his breeding program but was going to do that in any case; his cows were getting too big to be profitable. Because he's selling whole animals, the large frames resulted in too much meat for most customers, even if they were only buying halves or quarters. The smaller animal suits that purpose better. Some producers are ultrasounding calves at weaning to determine which will go in their grass-fed program.
Even with the right kind of animals, it's more than just turning cattle out on pasture. "You have to pay attention to the quality of the forage available," Nader says. Talbott makes sure to save some high-quality forage for his grass-fed animals so they get the cream of the crop. There is an issue of seasonality with forages, too. "A lot of producers are trying to establish irrigated pastures to have grass year-round," Nader says. "But it tends to be a seasonal product. You have to develop a market that is seasonal, or harvest a lot of feed and feed them that." Or sell frozen meat, as Talbott does.
Darrell Wood, a rancher in northern California who started Western Grasslands Beef in late 1999, tried something different. He addressed both the seasonality issue and the consistency issue??—??grass-fed beef can take on different tastes depending on what they graze before harvest. He knew if he wanted to deliver a fresh product year-round, he needed a protocol, so he began backgrounding cattle up to 30 days in a hay lot. Western Grasslands Beef now has cattle coming into the program from Washington, Oregon, Nevada and Idaho. Wood says the people who put their cattle into his program to sell but want to retain ownership get 40 cents to 50 cents per pound on the carcass over Choice-carcass prices pretty consistently.
The changes Wood made to his cattle, which are at least 51 percent Angus, came not so much in their genetic makeup as in the attention he started paying to genetics, EPDs and performance. The results of that were that conception rates went up 10 percent and weaning weights went up 150 pounds per head.
"When you start raising cattle through their whole lives, you start seeing the inconsistencies," Wood says. "You start seeing how some carcasses ring the bell and some cost you a lot of money. Getting rid of poor producers, along with analyzing the nutritional end of things, moving to a high-end mineral program made a difference. After a year or two, the premiums on grass-fed made us wonder why we hadn't started earlier."
The biggest management change may be in simply keeping cattle longer than normal and having the investment in the animal over a longer period of time, but it's not much different from retaining ownership in the feedlot.
Marketing changes
The marketing and distribution of product becomes something to consider for the first time for many producers. "Once they start selling grass-fed, they're selling a product," Nader says. So it helps to have some skill and interest in marketing that product. One rancher told Nader he felt like he'd earned an MBA by selling grass-fed beef.
Unless you sell your cattle to a company like Western Grasslands to sell the product, you will have the cost and logistics of issues such as packaging and labeling; inherent in that is more cost. Inventory management can become a problem??—??what if someone wants to buy the primals but not hamburger? It's very important to have that plan in place before you start to harvest, Wood says, as he learned through experience.
"We go out and do cold calls on restaurants and supermarkets; we have a PowerPoint presentation ready," he says. He explains to retailers how his product enhances commodity beef, rather than competing with it. It allows retailers to reach out to customers who don't want to buy commodity beef but who shop in their store.
It helps to be close to an area with a high concentration of those customers with high disposable incomes who are willing to invest in food products, Nader says. They tend to be concentrated in urban areas. It also helps to be close to a processing plant, ideally, a USDA plant.
It was that opportunity for direct marketing to the consumer, directly from grass, that attracted Morris to operate the way he does. "There is a gap between a rancher and his neighbor," he says. "I wanted to cultivate that relationship." He sends a newsletter to about 600 people; about half of them will place orders for whole animals or a fraction thereof. "We do devote a lot of time to our market and talking to people. Direct marketing is a niche way of marketing," Morris says. "That will never be the norm."
His premiums are a result of the direct marketing, more than the production. He estimates he devotes about $150 per head in marketing to each animal, but when fed-cattle prices are in the upper 80s, he'll get about $1.30 live weight, and his business is growing by about 20 percent per year.
Still, the majority of consumers in this country are grain-fed oriented and not frequently exposed to grass-fed beef. "There's no denying the production problems. They don't get as fat as fast; they're tougher because they're a little older," Nader says. "That provides a challenge: to fatten animals and get the quality needed for purchases on a return basis. They might buy it once, but you have to get it right or customers will leave you."
In addition, the feedlot system we use today is efficient for beef production. "It takes less land base the way the system is designed," Nader says. "We could not go back and produce the amount of beef we produce today."
The future
How big can grass-fed beef become? "It will always be a small portion of production, but it's rapidly expanding," Nader says. "Those (who get) in early will be those who will control it."
But others disagree about that assessment and point to the organic- and natural-foods category; the same thing was said of those, but sales continue to climb.
In fact, Morris thinks grass-fed beef, or at least forage-fed, can become the norm. "I think it's reactionary to say it's a niche and always will be," Morris says. The industry structure could remain the same, with those who specialize in finishing animals doing that with grass or forage. "We could produce every bit as much beef as we do now," he says. "We don't know how to grow grass year-round, but we could figure it out." It might mean moving cattle around the country with the seasons, but he can see the possibilities for a grass-fed future.
Yet another reason to go back to the older basic breeds and crosses (like the Murray Grey, which is angus/shorthorn),that do exceptionally well on grass!
;-) :cboy:
