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PC/GF/DB?

Big Muddy rancher

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Feb 10, 2005
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Big Muddy valley
I was wondering since geographically your not really that far apart have you ever considered working together? All three of you are selling grass fed beef, could you not gain a bit of economy of scale and help fill in the highs and lows of each other production.
 
Big Muddy rancher said:
I was wondering since geographically your not really that far apart have you ever considered working together? All three of you are selling grass fed beef, could you not gain a bit of economy of scale and help fill in the highs and lows of each other production.

I'm all for co-operation if it can move us ahead but Dylan's family and their program is so far ahead of almost everybody else in the marketplace I'm not sure there would be much to be gained with partnering with the likes of me. PCs operation is maybe at a similar stage of development as mine but he is selling different things and rearing his cattle a little different.
I've been thinking a lot about the next stage of development for us and other direct marketers this winter and here are my conclusions. We are on the crest of a wave of demand - a very good chance that the existing suppliers can't meet the demand. That's a great place to be but it's also critical that we increase production to capture this market or they will go elsewhere for product. I think it is critical that more producers step up to fill this demand.
The worst outcome for me and all producers is if Walmart or Superstore start selling "industrial grass-fed". We don't need a grass-fed "industry" we need producers rearing and marketing grass-fed. To put money in producers pockets we must do the work ourselves. If some of the Thousand Hills type groups like they have in the US start up here primary producers are reduced again to being margin players - maybe $50 maybe $80 premium over conventional.
Same goes with co-operation to an extent, there has been talk in my area of a number of us joining up to market different products, combine deliveries etc and although it sounds good I fear that it is driven more by quest for an easy life rather than ambition to do better. Too many people want to reap the benefits without altering their current practises. Same with all the packing plant proposals - most wanted to be part of them but only because they could drop fats off at a plant like they drop calves off at the auction now yet expected to get most of the retail beef price for the finished product. It doesn't work like that in this life - if you want the reward you'd better expect to do the work. If you want someone else to do the marketing, organise the logistics, the transport etc realise that you have just voted to become a margin player again. The beauty of direct marketing is that you can be a price setter again instead of a price taker and I wouldn't give that up for anything.
I really like the fact that direct marketing works for producers because it is high margin, low volume - the opposite of industrial agriculture. If I can net $500 per animal over commodity price that's the margin off 10 animals at $50. Producers can win the game being high margin, price setters where I don't think they can win being low margin, price takers. I think there is huge potential for numerous different products/types/styles of marketing by all sorts of producers and each can be unique and tailored to the strengths of the family involved. Smaller scale fits the perception of our customers too - they want to buy from and support family farms and ranches. I really think direct market is the "get out of jail" card for primary producers if they can realise the potential and seize the opportunity.
I'd better quit now before this turns into a book :oops:
 
Books are ok if they're interesting-the interesting thing is most of the people that are endeavouring to be price setters is that they are very cognizant of cost of production-a win/win combination. A good old brainstorm amongst eveybody might not be all that bad either!!
 
Joel Salatin took a few things he knew and put it in a few books and people buy them left, right and centre. I think GF that you have a book in you and the margins on a book could be very good. I promise to buy a copy. As far as BMRs good idea, we have tried to cooperate with a couple of direct marketers down here and they both said the same thing you have that this is a little different and that is a little different. I suggested we discuss and use the same protocols but still they wanted to keep it the way it is. We have sent each other customers when we couldn't fulfil demand but that was the extent of it. That is why I have gone the Canada Gold route because several of us can get on the same page and go in the same direction. There is a danger though of commoditising a good thing as GF mentioned.
 
I thought it was your usual witty sarcasm at work NR - I apologize.
Mind you with that sorry impersonation of a Scottish accent you followed up with I think you should be apologizing too :wink: :lol:
 
I'm worried about not meeting the demand as well, there are rumors that Tall Grass would like to start something in the North East. I had a restaurant call the other day asking if they could get a discount if they bought enough. They want local grassfed on their menu. I knew the problem before I talked to them. They wanted about 10lbs per week per cut of ribeye, tbone and ny strip. That's a lot of animals for me that I would have to find another market for the rest of the cow. Especially where I'm currently not processing year round. Makes it pretty tempting for some people to start producing grassfed beef with a feed bunk.
 
The reason for a USDA Grassfed label is to open the door for "industrial grassfed" and the other avenue is imports...and who knows the story behind that. 100% forage beef from conception to consumer is ranch specific...we have to keep buy local/buy from the producer attached to grassfed.
 
Grassfarmer well said! Thank you for your acknowledgment. It's a long row to hoe and while it seems like we have been at this for a long time, so far it remains a challenge. You have given this topic a lot of thought and as you say niche marketing, unlike commodity marketing, does not rely on economy of scale for it's viability. Not that there are no efficiencies to gain, but if that were the main focus you would quickly be back on the commodity track. The focus has to be competing on quality not on price. The reality of direct marketing from pasture to plate - with all of the associated costs that become the responsibility of the owners - is that it becomes very difficult once established and functioning to include other producers except strictly as producers/suppliers. At which point, as Grassfarmer pointed out, the benefit to them will be reduced to a moderate premium at best. One of the larger health food stores that we sell to told us that the average lifespan of direct marketing enterprises ( family farm based) is 11 months - this is because of all of the challenges associated with vertically integrating all aspects of the business: finishing, slaughter, understanding meat cutting to accurately determine yields and pricing, marketing, storage, distribution and delivery, financing and accounts receivable. Once a business has gone through the effort to become educated, established and viable the opportunity for cooperation is limited. The best opportunity for cooperation in direct marketing efforts that will allow all players to benefit on an equal footing is at the beginning where all players are equally involved and personally invested in the project.
 
Dylan Biggs said:
Grassfarmer well said! Thank you for your acknowledgment. It's a long row to hoe and while it seems like we have been at this for a long time, so far it remains a challenge. You have given this topic a lot of thought and as you say niche marketing, unlike commodity marketing, does not rely on economy of scale for it's viability. Not that there are no efficiencies to gain, but if that were the main focus you would quickly be back on the commodity track. The focus has to be competing on quality not on price. The reality of direct marketing from pasture to plate - with all of the associated costs that become the responsibility of the owners - is that it becomes very difficult once established and functioning to include other producers except strictly as producers/suppliers. At which point, as Grassfarmer pointed out, the benefit to them will be reduced to a moderate premium at best. One of the larger health food stores that we sell to told us that the average lifespan of direct marketing enterprises ( family farm based) is 11 months - this is because of all of the challenges associated with vertically integrating all aspects of the business: finishing, slaughter, understanding meat cutting to accurately determine yields and pricing, marketing, storage, distribution and delivery, financing and accounts receivable. Once a business has gone through the effort to become educated, established and viable the opportunity for cooperation is limited. The best opportunity for cooperation in direct marketing efforts that will allow all players to benefit on an equal footing is at the beginning where all players are equally involved and personally invested in the project.
Like this...
http://www.uswellnessmeats.com/about.html
 
I had an interesting visit this winter from Tim the "butcher boss" of a colony at Wetaskiwin. He wanted to look at the genetics that we use to produce grass-fed and also to discuss the grass production side. I was real impressed with the guy - they do about 120 "natural" cattle a year, 30 hogs a year plus thousands of chickens all butchered and retailed through a farm shop on the colony as well as retailing some in Edmonton and at farmers markets. He was very knowledgeable on butchery and particularly the added value side like making high quality sausages using natural products like a celery extract instead of chemical preservatives.

While we don't generally think of the hutterites as being into natural or "non-industrial" agriculture they are smart enough to spot an opportunity. I think if they set their minds to it they could quickly become a very large marketing force in Western Canada - maybe they could supply "natural" product on a large scale successfully? They have the livestock numbers, will co-operate with each other, have approved butcher facilities already for the small species, approved kitchens where the girls could add value to basic products and generally have enough (unpaid) labor available to cut and wrap . I don't think they are necessarily leading edge pioneers but they are early adapters of new methods and technology and technically proficient at most things they turn their hand to. If anybody can build and pay for a small producer owned packing plant it might be the Hutterites - I'm sure some of them have enough tied up in green machinery to build a plant a couple of times over!
 
Grassfarmer,

Your first post is spot on. I am glad I have my base customers who simply buy from me. I have a nice mx of restaurant, retail and direct sales. Anytime I ad one segment I have to be cognizant of the effects on the other segments.

The assumption that grassfed is all the same commoditizes it. We should look at Wine and Beer segments. Porter is not light beer. All grass fed has its own uniqueness. We should market the "Adventure of Grassfed" similar to wine and cheese tasting where each grower and region has its own charachteristcs.

That you recognize the differences in operations close to you is big. There are other ways we can work together including use of butchers, transportation and maybe distributing... And maintain our unique identity.

Maybe we should take a page from the Microbrew industry as far as keeping the indentity that is ours???

That being said, part of your comments goes to where do we sell? We have focused near where we live and think we hav emore oportunity there. We have an affluent population of 150,000 just North of us.

However, to go to the next step, we have Portland and Seattle. I have been exploring those markets differently. A USDA Butcher who needs animals through his plant is helping me find CSA's and Food Coops. Another Beef Producer is needing our calves to fill a restuarant Niche. Both of these may be more of selling at a premium on the rail ($2.00/Lb) on more volume. I may be willing to give up some identity to grow more efficiently. I can only hand so many steaks to end customers.

The big challenge will always be selling what isn't selling. It is IMO where the smoked/sesoned meats are so important. Also, I am looking to the Pet Products for selling Organ Meats....

The other thing I see is the rooms where we meet are getting fuller. There are more irect marketers and I can only hope the demand does grow for our products. It is why I am gratefull for my current customers. The new customers are pretty much not versed on meat. THe result is they fall for lots of things. And, if one new priducer that butchers 700 lb live wt calves on dry grass is thier first taste, it is hard to get them to buy a second time.

The adventure of learning all about different segments and meat is a joyfull challenge for me. I realize it is not everyones cup of tea.Keep in mind, I still have my fultime job. So, maybe I am not the "Expert" I profess to be????? LOL...

Best of luck and let's all keep talking and sharing ideas,

PPRM
 
How are you balancing the sales of the whole animal while selling to restaurants?

PPRM, you took my idea, have grassfed tasting like wine tasting, different vintages if you will.
 
Ben H said:
How are you balancing the sales of the whole animal while selling to restaurants?

PPRM, you took my idea, have grassfed tasting like wine tasting, different vintages if you will.

Actually, Carrie Oliver at the Artisan Beef Institute is the leader in this Beef Tasting.

It is basically some luck and lots of variety.

One Restaurant takes ALL of my Short Ribs. THat takes a huge chunk of Chuck.

The thing is to be cautious it isn't only top end steaks going to restaurants. If they take other cut and you can get several of them. Then the retailer takes some sutff... The Direct end users take stuff. The balance you find ways to use in seasoned/smoked meats and/or Pet Mix...

It is as much luck as skill. But, be ready to say "No". Also, I know one producer who got several chefs to work at taking parts of a whole calf. I think the thing is to be real and upfront. Understand their needs. I think this movement ot use local is getting bigger in the Chef world. Simply keep an eye out and put the word out that you have product
 
PPRM, your lucky to have such a readily available and educated food aware client base to support your direct marketing ventures,are you cooping with other producers in order to service csa's,restaurants,farmers markets and the like.Or do you have the capability to market only what you produce on your place in the quantity needed for such ventures?
 
You guys are more adventurous than me - I know I'm potentially leaving a lot of money on the table by not selling individual cuts but the simplicity of selling quarters, halves and wholes means I don't have to work quite so hard at getting whole carcass usage.
The demand potential just blows me away - we can sell at 75% of average Canadian retail price and make good money. We have two cities of a million people each within 2 hours of me. I don't have a clue what percentage in the cities buy beef direct - is it 2% or 8%? Dylan would you like to speculate on that figure?
The way I see it for every 1% more people we can get to buy direct in a city of a million people it would need around 1000 cattle a year! If they return $4-500 more per animal than commodity that puts another $1/2 million into the pockets of producers and into rural communities instead of into a faceless corporate bank account. If we can sell them better beef, cheaper why can't we increase the number buying this way by 20, 40 or 60%??
I think we could but we would need more cut and wrap capacity and a lot of producers to share the goal.
 

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