Roundtable: Can I make money selling grass fed beef?

It’s a question that comes up whenever a new Devon breeder recognizes the gourmet quality of the meat in his pasture:  can I sell this animal at a reasonable profit or do I have to settle for the price dictated by the auction barn?  That same new Devon breeder also quickly becomes discouraged when he realizes he can’t produce enough meat for the commercial marketplace.

Not many Devon breeders have the numbers necessary to supply the needs of just one store much less a major supermarket chain or a wholesaler that buys thousands of steers at a crack.  The marketing problem seems insurmountable.

Edward Taylor of Vermont wrote us recently and put the question this way:

Do you believe one could scale the economics of grass fed farming methods so that these products would be widely available, and at an affordable price?  Could a breed association spawn a cooperative where such a scale– even regionally– could be achieved?    The traditional form of the Devon would thus find a new broad commercial acceptance.

For some answers we turned to four friends with quite a bit of experience in marketing grass fed beef.

Bill Roberts of 12 Stones Grasslands Beef raises Devon, but, more to the point for this discussion, puts together large numbers of grass fed animals—not only Devon—for the commercial marketplace.

Jeff Moore is the vice president of the North American Devon Association and a longtime successful grass fed beef marketer from his own farm in Dixie, Georgia.

Jeremy Engh is the president of the American Devon Cattle Association and his Lakota Farm is the largest Devon operation in the country, dealing in thousands of pure bred and Devon-influenced cattle every year.  He also organized the Certified Devon Beef program, which is very much along the lines that Ed Taylor is asking about.

Ridge Shinn heads an organization building an ecologically-based alternative to the current food production system.  He consults with farms marketing grass fed beef and founded Hardwick Beef, a major supplier of grass fed beef in the Northeast.

These men have had more experience than most dealing with the challenges and frustrations of  grass fed beef marketing at every level.  What about it gentlemen?  Can this product “scale up” to be widely available at an affordable price?  And if so, is the answer breed association sponsored co-ops or something else?

Roberts:   My opinion is, theoretically yes.  There are several successful grass fed marketing co-ops around the country right now that are enjoying regional success.  But I know of none that are breed association-based at this time.

Shinn:  100% grass-fed beef is eminently scalable in the best possible way.  But it is not easy, which is only part of the problem.  These products will become readily available only when consumers get a grasp of all the benefits of the product.     

Engh:  Do I believe one could scale the economics of grass fed farming methods so that these products would be widely available, and at an affordable price? Yes, of course, time and money are all that’s needed.  

Moore: My answer would be maybe, but it will take more education and a desire for market share in the high end markets.

A breed in itself can give the producer the edge over other breeds, that is how I found Devon.  I know Devon does that since I started trying to produce high quality meat with multiple breeds here back in the late 90’s. I could not gain consistency until I discovered Devon, but you can still produce bad product even with the Devon if you don’t finish them before the kill. My opinion is that Devon is, without a doubt, part of the answer.

The producers who are doing it right and putting out the gourmet stuff have all the customers they can handle. High Quality meat sells easy, the customers will search you out and come to you for it. News of the good stuff travels fast and news of the bad stuff that someone paid a premium to experience travels even faster.

So if my premise is true, then you’re left with the either inconsistent or just not good grass fed producers to fill your co-op and that doesn’t make for a healthy business model.

Shinn:  The challenge is to explain again and again that grass fed beef is clean and healthy—no GMOs, antibiotics, hormones—and has the right fats and vitamins; and the process of growing it sequesters carbon, creates a sponge in the soil to catch and retain water, and provides viable agricultural jobs and revives the rural economy.

When that message really gets through consumers will then be motivated to buy the product in amounts great enough to be commercially rewarding.  How it might be organized by a breed association or co-op is a big question with many possible answers.

Schoumacher:  I think it would be futile to wait for the Devon breed associations to act.  They’re so involved in their intermural struggles that they haven’t trouble promoting the Devon brand much less doing the hard work of marketing. And they’ve never shown much interest in sales promotion of Devon meat.  So I think individual breeders will find they have to “take the bull by the horns”, if I may be forgiven that.   

Moore:  The issue of taking the lead on meat promotion has been on the table for the last two NADA board meetings. I think it will be put into high gear soon one way or the other. Those of us that have been marketing our Devon Beef direct to the consumer know there is no shortage of stories that all end in “That is the best meat I have ever put in my mouth. My burgers taste like a great steak”. 

I have been campaigning for the meat promotion because I think it will be a positive move for the breed and future bull sales. The Devon breed needs to attract more commercial breeders that can discover the advantages of using a Devon to cover their commercial herds with high quality bulls.   95% of my meat sales come from the F1 calves out of my commercial herd that cut out so well even my processor sends me new clients and tells the Devon story. 

Schoumacher:  That’s good to hear.  That’s promotion, though, not actually helping members market in a cooperative effort.  The trouble is many, probably most, Devon breeders have come to this out of a love for the animal, without stopping to figure how they can make money at it.  In fact, there’s something approaching contempt for making a profit.  Those that do want to make their operations sustainable—and Dave Pratt would say “if it ain’t profitable, it ain’t sustainable”—mostly don’t have the scale or the necessary capital or the marketing expertise and are going to have to work through some kind of cooperative relationship.  Could a breed association actually set up a marketing coop, handle and sell the animals? 

Engh:  Yes, it could, but breed associations must not forget their primary functions and responsibilities. Breed associations are created to maintain accurate breeding records, promote the breed, and to disseminate  general information to its members. When breed associations promote specific breeding systems, production systems, bloodlines, or breeders it creates huge problems within the organization. 

This being said, the breed organization could certainly “spawn” a program as suggested, but I feel in fairness to all breeders, including those with an alternate production model in this case, the breed association should remove itself from the process after its inception.  

Roberts:  The marketing co-ops I am familiar with have grass phenotype cattle or geography or family and personal relationships as the basis of their joint enterprise more than a particular breed of cattle.

There are several new entries into the area of processing/wholesale marketing that we are working with to establish consistent quality supply lines with volume.  But again, specific breeds are not the basis for the effort.  Most of the Heritage Breeds out there do not have sufficient numbers to supply what a volume processor demands.  We have three processor partners who project growth of 1,000 to 1,500 head over the next year.  That is 3,000 head on the low side.  And these are regional processors, not national processors like the big boys on the conventional side that do several thousand head a week.

On the conventional side, Certified Angus Beef is a successful model that can be learned from. 

Shinn:  Certified Angus Beef is a good place to start.  Here is a product that was introduced in the market place with a very good story and quality meat to back up the story.  The product originally was the product of Angus sires on commercial cows, that is, the steer had to be 1/2 Angus.  As the program progressed and success demanded many more animals to fill orders, the protocol shifted to anything with a black hide qualifying to be CAB.  The quality in the marketplace eroded, even by conventional standards, and the product does not have the stature it once did.  CAB and the marketplace will verify these facts. 

Roberts: The difficulty in the grass fed sector is that most producers are smaller, with diverse soils, forages and management and rarely have consistent genetics to make a volume supply with consistent quality.  A big stumbling block remains to be the actual finishing of the cattle for a quality product in volume.  There are many quality cow/calf operators and stocker operators.  There are not enough folks who are finishing high quality grass fats yet.  Many individual producers who are successful marketers are successful due to the health aspects of the meat, not the gourmet eating experience.  That is changing but ever so slowly. 

Moore:  So we have producers who are just putting out low hamburger quality product and those producers should not expect the highest prices for what they produce. I have some in my area that are doing just that and their customers tell me all the time when switching to me “the burger’s OK but the steaks and roasts are not edible”. These producers might be well-meaning  but because of lack of knowledge, or the wrong type of cattle, or ignorance of the quality of forage necessary to get an animal finished in their environment, are never going to put out the kind of product consistently that I would want my name on. They do a great job of keeping my customer base strong.

Bottom line, Devon can fill the need, and if I can do it in my area someone else could too, but the level of knowledge and sacrifice will need to match.

Shinn:  My sense is that a program could succeed by collaboration of producers of the Devon breed and commercial cattlemen.  A very successful program in France has 22,000 farmers producing 500,000 lambs annually and all the production/harvest animals are the progeny of 200 rams.  Commercial ewes are bred by artificial insemination (AI) to proven sires of specified breeds.   

In the same way, proven bulls of the Devon breed could be bred by AI to reasonable quality commercial cows of some British breed.  The resulting calves, male and female, should be harvested when they are finished and the process followed each year.  We have done this experiment with proven Devon sires on commercial cattle all across the country.  The F1 (first cross) is always stunning since we are harvesting hybrid vigor (a 15 to 20% increase in production when two unrelated breeds are crossed) as well as the meat quality of the Devon and the percentage cut out typical of the best Devon bulls (65 to 67%).  Remember all Devon bulls cannot play in this game—only proven ones.

This system could then begin to generate the volumes of meat needed to run a successful 100% grass-fed beef program, whereas a coop of Devon producers will probably never have the numbers to create a meaningful meat company with full blood Devon carcasses.

The power of the Devon genetics can generate these kinds of results.

Schoumacher:  My impression is that what successes there have been are almost under the radar, and are regional, even local.  Certainly the well-known big national grass fed operations have had disappointing results.  I hear everything from poor organization and leadership, to under-capitalization, to not figuring a way to sell the burger, as the reason for the failures.

On the other hand, you can look to operations like US Wellness or the company Ridge founded—Hardwick beef—which have different business models but involve more than one farm and have exercised strict quality control to become quite successful.  Those are just two which come to mind.   Jeremy Engh has been behind a program called Certified Devon Beef (CDB), which combines animals from several farms with his own very large herd. 

Engh:  We produce 2,000 a year and have orders for 10,000 through CDB (Certified Devon Beef).  We lose about 8-10% of stock through issues already mentioned but have less attrition every year. Other prohibitive factors not listed so far include disposition, frame size, and health issues. Although we lose very few to these problems, when you deal in thousands of animals, 1-2% add up to significant losses. The key for us and the breeders in our CDB co-op is early identification of animals that won’t work and their early removal from the program.

Which brings up the second part of this question about economics:  in order for the price to become reasonable supply must equal demand. At this time there is a huge gap between the two, which is the reason for the inflated price. I think we are 15-20 years away from seeing this start to balance out.

Roberts:  There are way too many cattle that just do not cut it on the carcass quality or quantity requirements.  Tall Grass used ultrasound to identify quality – they turned a lot of cattle away in that process.  It takes a very large gene pool and a long time with committed effort to develop numbers of cattle that fill the bill for what the industry needs.

It is happening but way too slowly.  Capital, drought and a willingness to work together appear as three hurdles that are slowing the process at present.  Meanwhile, grass fed beef from Uruguay, New Zealand and Australia continue to dominate the markets on the coasts.  The quality may not be the absolute best.  But it is good enough for consumer acceptance with predictable consistent quality and can be accessed in volume with that consistency.  Plus it is cheaper for the retailers to buy than domestic. 

Shinn: It will never be cheap and should not be.  To those that long for cheap, great quality beef I suggest a look around at other products for sale and compare the price/quality equation.  To pick on one obvious product, buy a Snickers bar–you will pay approximately $1.29 for 2.07 ounces.  Do the math and you will find that this product costs $.623 per ounce and then $9.97 per pound.  Without discussing the health benefits of this compared to 100% grass-fed beef we should consider paying an equivalent price for something that will enhance health. 

Roberts:  Consumer demand is for “local” with quality and safety.  Domestic producers have the best opportunity to fill those needs.  It is a prime opportunity for Breed Associations or other associations with commonality to capitalize on.  But it is not easy.  However, it is exactly what we have been working on for the last several years and plan to be among the front runners on supply for the future.

Shinn:  Creating the consumer demand, having producers that will learn to produce great, quality 100% grass-fed beef and then delivering the story with a great piece of meat is the big job to be done.  Many folks have learned many pieces of the puzzle.  Working together on this will push this product towards the tipping point where healthy meat is readily available and the planet is healed in the process of production. 

Final note:  our thanks to Bill Roberts, Jeff Moore, Jeremy Engh and Ridge Shinn for offering their thoughts on this subject.  These men have had years of real world experience in all phases of Devon breeding and marketing and at all levels.  Whether you want help with raising or selling grass fed beef, I suggest you contact them: 

Bill Roberts     12stonesgrasslandbeef@gmail.com 

Jeff Moore       bigmocattle@windstream.net  

Jeremy Engh   enghs@aol.com  

Ridge Shinn     ridgeshinn@gmail.com