Listen, I’m kind of a major nerd. No offense mom and dad, but I get it from you. It’s kind of funny looking back, I hated all things math growing up, and now I find myself constantly thinking about numbers. I very much remember the monthly budget meetings and let me tell you, you had better be broken or bleeding if you interrupted. These very conversations are what lead me down the path of direct-to-consumer sales.
I analyze numbers…like a lot, like waking up in the middle of the night thinking about it, a lot. I would look at what it cost to raise a cow, grab the feed bill receipts I’d find in the feed truck, and begin to calculate what it costs per a load of feed per cow. Then I would review the vet bills, add those on and average out the cost. From there, watch like a hawk what each cow sells for based on weight and try to break down why one versus the other sells better. I think the proper term for this is paralysis by the analysis. If look at my desk, you will see chicken scratch notes that mean nothing to anybody but me!
As you’ve seen by now, we are beef producers. But what does that really mean? We run a black Angus cow/calf operation. We raise our cattle specifically for beef production for the general public. However, the manner in which our beef reaches the potential consumers can vary, whether our beef products enter through the standard meat supply chain process or through direct beef sales.
What’s the difference between the two methods?
Traditionally, we have always sold steers and heifers at preferred slaughter weights as yielded by the livestock market. Much like the stock market, this number changes frequently and is completely out of the farmer, rancher, livestock buyer, and stockyard’s control. Risk is fairly low, the beef is raised to slaughter weight and sold as a live animal. Again, we have no control over the price offered.
Remember earlier when I said I like numbers, not math but numbers? The beef industry as a whole has been experiencing serious unrest. The amount the rancher makes off the beef is nowhere near the price premiums packers receive. Purchasing beef from the grocery store has reached an all-time high, yet farmers and ranchers are being paid at an all-time low. The math doesn’t add up.
Now, I’m not saying this is always the case, but in recent years, our profit margins have trended way down. Enter direct-to-consumer beef sales. This method allows cattle producers an opportunity to not only diversify but to put our beef directly in the hands of consumers. Increased demand in farm-to-table not only in beef but in all food sources has allowed for a niche marketing strategy.
This allows local producers to sell through a myriad of options. We have the option to sell through local farmers’ markets, online sales, retail stores, and direct word of mouth. It also cuts out the middleman, expediting products to potential customers.
We have the ability to sell the same retail cuts you would find in the grocery store as well as larger beef bundles. Even when purchasing direct sales beef, you can rest assured that your beef is inspected. In order to sell retail beef, the beef must be either state-inspected or USDA inspected. The only true difference between state and USDA inspection is that USDA-inspected meat can cross state lines.
Another important factor when operating a direct-to-consumer sales model is going to be the cost to the consumer. Farmers and ranchers carry the upfront cost for each beef as well as the individual cut processing, product storage, and shipping.
To finish each beef out, they are both pasture raised and finished on grain. For us, the finishing process takes 120 days. That’s 120 extra days we hold that beef, thus holding the risk. While high-quality beef makes its way to your plate quicker, it is a more costly process for the individual farmer or rancher.
While every operation is different, our business plan is to use a combination of two methods. I will continue to analyze the numbers and the economic considerations surrounding the beef industry. Our goal is to expand our customer base options beyond the grocery store while providing value.
We truly want to see the beef industry as a whole succeed and want customers to know their beef is a nutritious and quality product whether it comes from the grocery store or from a direct-to-consumer producer.
Know where our next meal comes from, it’s okay to have beef with us!