Final Report for EW02-004
This project provided training through workshops, field visits and networking to 120 agricultural professionals across Colorado interested in branded beef businesses. Niche-oriented production and marketing create an opportunity for producers to diversify and augment their income stream while decreasing their exposure to the market volatility of conventional beef production. Successful diversification depends on education and ongoing access to technical advice about adapting cattle production and product processing, pricing, storage, regulation and marketing strategies to ensure a revenue stream that meets producer objectives and needs, and a degree of liability and risk that fall within acceptable levels for the producer.
- 1. At least 120 agricultural professionals across Colorado, including Cooperative Extension advisors, USDA field personnel, state agriculture agency and community organization staff, other professionals and ranchers, will attend one of three two-day professional development workshops designed to assist livestock producers in developing and operating alternative beef production and marketing programs.
2. At least 80 of all workshop participants will use the training materials to conduct their own educational programs by:
a) providing assistance to ranchers who are starting or already operating a niche beef production and marketing process; or
b) increasing community awareness about the importance of sustainable agriculture and the need to support local agriculture to keep land in agricultural use.
3. At least 80 of all workshop participants will know how to contact fellow professionals for ongoing technical assistance on niche beef issues through:
a) workshop materials and other resources via the Internet; and
b) a network of state and regional contacts and resources.
The western cattle ranching business has faced many challenges throughout its turbulent history, including recurring drought, predators, invasive plants, animal diseases, increasing input costs and a decreasing market share to other meats. Ranching is a resilient business. Today, however, it confronts a fundamental change that is eroding the very foundation of the ranching enterprise – a rapidly shrinking land base.
Forty-nine percent of Colorado’s land, or 84 percent of all private land, is managed by farmers and ranchers, for a total of 32.6 million acres (U.S. Census of Agriculture, 1997). The USDA/NRCS National Resources Inventory provides a historical perspective on changes in the agricultural land base. From 1982 to 1997, 332,200 acres of farm and ranch land have been converted to development in Colorado (NRI, 1997). Pasture and rangeland made up 67 percent of all land converted. Geographic information systems analysis shows that another 2.6 million acres of ranchland in Colorado are currently threatened by residential development (AFT, TNC and CAW, 2001). A primary force driving agricultural land conversion is Colorado’s 2.7 percent annual population growth rate which has led to an annual land consumption rate of 8.3 percent (Sullins, Theobald, Burgess and Jones, 2000).1
There are three fundamental ways of protecting agricultural land from conversion to other uses: 1) direct land protection via mechanisms such as conservation easements; 2) public education aimed at increasing awareness about the many values that agricultural lands provide to local communities; and 3) economic development strategies for agricultural businesses. American Farmland Trust (AFT) has been involved in protecting Colorado’s agricultural land since 1982 (AFT currently holds easements on approximately 13,000 acres), and in public education and policy development in communities across the state since 1997. Over the past years, AFT has witnessed the tremendous growth that threatens Colorado’s remaining farm and ranch land. Many producers are driven to leave agriculture by declining business profitability, but there are still many who would prefer to find alternatives that allow them to remain in business (AFT, 2000). In fact, during the Western SARE-funded train-the-trainer workshops that AFT conducted in Idaho and Utah in 2000, workshop participants indicated that information about agricultural business issues and opportunities should be included in all discussions about land use and agricultural land protection.2
While land use and demographic changes have made some agricultural operations more difficult and less profitable, they have also opened new doors for business development. There are documented success stories of ranchers throughout the Rocky Mountain West who are using innovative strategies to generate income from their existing resources (Sonoran Institute, 2000).
Economic development strategies such as business diversification offer new options to producers confronting the challenges of staying in business in the face of changing market conditions.
One growing area of interest in the ranching business is niche beef marketing. The beef industry is changing, as are consumer preferences. Conventional beef production is very segmented, with meat moving from the producer to the feedlot to the packer (Smith, 2001). One of the most important implications of this is that the quality of meat reaching the consumer can be quite variable. Consistent quality (in terms of taste, tenderness and safety) is very important to today’s consumer. In addition, as consumers have become more interested in and informed about how their meat is produced, a growing number have also demanded meats with other characteristics such as very low fat content or hormone- and antibiotic-free production (Grannis and Thilmany, 2000). Growing demand for these characteristics has created the possibility for producers to market to specific consumer segments.
Niche marketing entails identifying and marketing to a population segment that is dissatisfied with conventionally produced beef and willing to pay more for a product they consider superior. In fact, a survey conducted by Colorado State University’s Department of Agricultural and Resource Economics found that consumers would pay a 20 percent a premium for natural steak and ground round (Grannis and Thilmany, 2000). Ranchers involved in niche production add value to their beef by differentiating it from the products traditionally sold in grocery outlets (ATTRA, 2001). This strategy allows producers to diversify their income stream while decreasing their exposure to the market volatility associated with conventional, less vertically integrated production practices (Nader and Blank, 1997). Beef niches include certified organic, natural (no artificial ingredients with minimal processing), grass-fed (little or no grain finishing), locally raised (promotes local business) and conservation-based (animals raised on land protected according to certain stewardship practices).
Many mid-size Colorado beef producers are interested in achieving the benefits of operating a branded beef business, however, they are also aware of the complex regulatory environment, the changes necessary to existing production practices to provide a consistent quantity and quality of desired beef product to customers, the difficulty in finding a reliable processing facility, and the costs of product labeling and marketing. Many of these businesses struggle with marketing and financial planning to ascertain whether niche marketing will provide enough reward to justify the extra labor and capital commitments involved in such a business enterprise. They are also in need of a decision framework to make pricing decisions for their products that will help them achieve that reward level. There are several niche-oriented beef operations in Colorado. They include Lasater Grasslands Beef (national marketing of hormone- and antibiotic-free beef, raised under humane conditions), Yampa Valley Beef (local marketing of beef grown on agricultural land protected by conservation easements), James Ranch Agriprises (grassfed beef raised on holistically managed land), San Juan Organix (organic beef raised on holistically managed land), Rocky Mountain Beef (marketed locally as contributing to the protection of agricultural land and open space on Colorado’s Western Slope), and Colorado Homestead Ranches (a group of five families marketing beef through their retail store in Paonia). Each of these enterprises focuses on a distinct attribute and distribution area that allows differentiation from other beef products. The coexistence of these successful operations illustrates that there are still markets for beef whose production processes differ from conventional ones.
There are many good sources of summary information on producing beef outside of conventional markets. For example, many university Cooperative Extension Services have published fact sheets on beef marketing (Colorado State University, University of Idaho and Oklahoma State University, among others). Appropriate Technology Transfer for Rural Areas has published two excellent technical notes on alternative meat production and marketing. There is also more general information on agricultural diversification and marketing, such as the University of Nebraska’s workshop series based on, "Promoting Agriculture’s Future – Ag-Entrepreneurism with Brand U Products," and a series of SARE-funded workshops in Wyoming currently exploring agricultural enterprise diversification.
Currently lacking, however, is a step-by-step, in-depth source of information and training for professionals working directly with ranchers on niche beef issues in Colorado and the western region. The production, processing, marketing and retail requirements for niche beef businesses are extremely different from other commodities. Adding value by retaining more control over aspects of the production process is very complex, requiring new management skills and resources, as well as specialized knowledge. Furthermore, there is a lot of hard-won experience among livestock producers who succeeded or tried to establish niche-oriented operations, but no forum through which this information and expertise can be shared. The Western SARE Professional Development Program provides an excellent opportunity to assemble this information and formally train agricultural professionals in an area of growing importance to ranchers and to rural communities.
This project has enabled agricultural professionals and ranchers to come together to learn current practices, understand the regulatory environment and share lessons learned in developing and operating niche beef businesses. It also has built upon previous educational efforts, by AFT and other organizations, to increase the range of options available to agricultural producers to remain in production, keep their businesses viable and protect the land base.
Education & Outreach Initiatives
Through this project, we compiled current information about the inherent challenges and advantages of niche beef production and marketing and disseminated this information to agricultural professionals, including ranchers, across the state and the western region. We examined businesses in other states and across Colorado. The model for these workshops and much of the training curriculum will be very useful to field staff and ranchers throughout the western region, and we have attempted to extend the availability of the materials by making them Internet-accessible.
The goal of this project was not to promote niche beef production and marketing operations, but rather to provide timely knowledge and skills to the agricultural field staff who help livestock producers identify options that will keep their businesses sustainable and their land in production. The project linked producers and professional field staff and encouraged an ongoing dialogue among them to address the changing business landscape in which ranching now operates. The educational tools used in this project were threefold: 1) a written curriculum, 2) three workshops that included field trips and demonstrations, and 3) continuing education opportunities and ongoing access to information. This format provided different media as well as several opportunities for producers with varying levels of risk tolerance and resource availability to study the costs and benefits of operating a niche-oriented business.
The curriculum was designed in conjunction with AFT staff, Colorado State University (CSU) Department of Animal Sciences, CSU Department of Agricultural and Resource Economics, Colorado Department of Agriculture, Rocky Mountain Farmers Union, CSU–Cooperative Extension and others. All training materials were compiled into a three-ring binder for the trainees’ reference. We also made all training materials available on the niche beef Web site (http://dare.agsci.colostate.edu/aftnichebeef/). The training curriculum was designed to: 1) provide trainees with evaluative information that a livestock producer needs before beginning a niche beef program; 2) provide trainees with the tools and resources needed to assist producers in assessing and improving their current production and marketing operations; and 3) establish the basis for an online distance education course through CSU (and other institutions, where possible).
We selected and conducted three workshops at three Colorado sites: 1) Montrose (February 11-12, 2004); 2) Colorado Springs (February 19-20, 2004); Fort Collins (December 7-8, 2004). Each workshop was conducted over two days and featured a field visit to: 1) a ranch involved in a niche beef program; 2) a processing/packaging facility (to discuss carcass specifications, grade and quality issues and other unique carcass requirements for niche beef products); and/or 3) a retail outlet (to evaluate the benefits of niche products in a consumer setting). The Montrose workshop included a field trip to a ranch and to a retail outlet, the Colorado Springs workshop had a field trip to a ranch and to a combined processing facility and retail outlet and the Fort Collins workshop had a field trip to a family-run feeding, slaughter and processing facility. Workshop sessions included: 1) Niche Marketing Beef: Is It An Alternative for Your Operation?; 2) Defining Your Objectives; 3) Business Planning To Get You There; 4) Pitfalls and Potholes: Tips from Cattle Producers; 5) Niche Marketing vs. The Commodity World; 6) Hot Issues Panel; 7) The Retailer Perspective; 8) a dinner featuring a keynote speaker who operated a successful branded beef business. These plenary sessions (including panel discussions) were followed by three different sets of breakout sessions: 1) business management and structure, financial planning and risk management; 2) production, supply and quality issues for branded beef businesses, meat safety in processing and packaging, monitoring and re-planning; and 3) developing a marketing plan, production pricing, production claims and the certification process and marketing regulations. One of the workshops was videotaped to: 1) share with field staff who are unable to attend a workshop, 2) assist in evaluating each workshop session and the educational techniques used and 3) aid in developing a distance learning course. Following the workshops, we have continued to make information and resources available on our website and through professional field staff, which will also serve as a springboard for continuing education.
Presenters included Colorado State University staff and agricultural field staff with
experience advising niche beef operators, ranchers with successful and not so successful
niche beef operations (from within Colorado and several other states) and Rocky
Mountain Farmers Union, which advises agricultural cooperatives. Other presenters included staff from the Colorado Department of Agriculture, owners of slaughter and processing facilities and retailers.
American Farmland Trust coordinated all project activities, working with faculty and staff from Colorado State University, the Colorado Department of Agriculture’s Markets Division, Rocky Mountain Farmers Union, other curriculum contributors and selected peer reviewers, among others. A core committee of Colorado State University faculty and staff and the AFT project coordinator oversaw the curriculum development, reviewed draft materials, selected peer reviewers, designed the workshop structure, selected workshop sites and presenters and conducted the workshops.
To date, project success has been evaluated in several ways. First, the training curriculum was reviewed by the project committee and select peer reviewers before the final manual was released. Second, participants had the opportunity to evaluate the workshop format, presentations and usefulness of the training materials. Third, follow-up mail surveys and key informant interviews were conducted about four months following the workshops to discern the ongoing usefulness of workshop resources and materials. The overall success of the workshops is measured by the number of participants trained and the knowledge they believe they have gained, their ability and willingness to conduct outreach activities and the networks that have they have been able to build with other producers and professional contacts.
Outreach and Publications
To date, two publications are emerging from this project: 1) a fact sheet entitled, "Enterprise Budgeting: An Application to San Luis Valley Grass-Fed Cattle Operations" by Joshua Wilson and Dawn Thilmany in the Department of Agricultural and Resource Economics, February 2005 (attached in appendix); and 2) a forthcoming proceedings article (Ziehl, A., D. Thilmany and W. Umberger. “Cluster Analysis of Natural Beef Product Consumers by Shopping Behavior, Importance of Production Attributes and Demographics.” Forthcoming in proceedings of the 2004 Food Distribution Research Society meetings in Morro Bay, CA. 2005).
Other outreach activities include:
- Robbie LeValley, Extension Livestock Specialist, who has been working with a group of cattle producers from Gunnison on niche business development;
- Tom Field, Professor of Animal Sciences, conducted a strategy planning meeting for the American Shorthorn Association, gave a presentation at the Kansas State University Beef Research Conference in Hays, KS. Dr. Field has corresponded with producers in Ohio, Hawaii, Wyoming, Vermont, Kansas, Nebraska and Colorado after the workshops about the opportunities for niche beef marketing. He has also incorporated project materials into his senior capstone course, Beef Production and Management Decisions, and a Family Ranching course.
- Faculty in the Department of Animal Sciences have worked with the Chipotle Restaurant chain to develop animal audits and work with them on interacting knowledgeably with producers and formulating appropriate claims for the beef and pork featured in their restaurants.
- American Farmland Trust helped link the Ochsner Tenderlean Beef company to a retail outlet in Fort Collins and helped producers obtain information on label development.
- Faculty from Department of Agricultural and Resource Economics helped several producers and the American Grassfed Association develop value-added grants and marketing materials.
This project benefited agricultural professionals and beef producers in the Western region by providing them with training and resources to:
1. analyze the objectives, financial opportunities and constraints associated with a branded beef business;
2. understand the costs and benefits of start-up versus tie-in business development strategies;
3. know who to contact for additional information regarding their specific production and/or marketing strategy; and
4. understand national, regional and local-area consumer preferences for branded beef products, including consumer willingness to pay for different products, including those with value added to them.
This project’s demonstrable impacts can be shown in two ways: first, through post-workshop evaluations and comments; and second, through contacts that participants had with project staff after the workshops. Referring to the post-workshop evaluations, the majority of producer respondents said that the niche beef project had led them to further develop their branded beef businesses. All of the Montrose respondents, 87% from Colorado Springs and 92% from the Fort Collins workshop indicated that the project information was useful to their own business development. They also were planning to use the information from the workshop and workbook in meetings with other producers (Montrose=80%; Colorado Springs=60%; Fort Collins=62%). Overall, 94% of all respondents from the three workshops said that they would recommend the workshops to other producers. Producer respondents said the following:
- The workshop provided inspiration and ideas for family niche beef operation.
- Called several persons involved with grassfed beef sales and production to discover avenue of sale for my production, with no results to date.
- Producer group in early stages of forming is gaining focus due to contacts made [at the workshop]. Very inspiring.
- Colorado’s Best Beef Company is now underway. The workshop was very helpful.
- I thought about whether grassfed beef would really be better for my operation or not.
- I presented at the A.I.M.E. conference in Casper WY--used some of that information, offered advice to other producers interested in natural, grassfed beef.
- Helped us better understand the marketplace and what it would take to enter it well.
- We continue to use the information in the formation of our local marketing group.
- Has helped the further development of a group already formed.
- We had previously planned on creating a website, but the workshop gave me a lot of additional tips and ideas.
- Great workshop and very worthwhile. Led us to begin working on our own label.
- From one respondent: 1) finished beef brochure, 2) created internal process for keeping track of customers, cutting instruction, etc., 3) exploring a hamburger market, 4) have beef products in the Harmony Market, 5) considering buying more cows, 6) have more ideas than time.
- Very helpful shaping costs, using information we learned at the workshops.
Although we only received 5 post-workshop evaluation forms from NRCS, Cooperative Extension and other agricultural professionals, the majority said they have referred to their workbook since the workshop, and all said they had been contacted by cattle producers for information about niche beef business issues and opportunities since the workshop. They all said that they felt better able to answer questions from producers following the workshop. Two respondents had conducted a meeting or workshop using the project materials and 3 said they would do so in the next year. They all responded that they would recommend the workshops to colleagues. To ensure wider access to the workbook materials, we sent out a CD of the entire workbook to each agricultural extension agent, NRCS and RC&D staff in the state of Colorado. Agricultural professionals who responded to the survey said the following about outcomes from the workshop:
- I work with the Ohio Signature Beef Program through Great Lakes Family Farm Cooperative. Information has been very useful in recruiting programs. We would be interested in working with your organization in the future.
- The contact with Allen Williams was great, we are working on some items for Grazefest 2005 in Mississippi.
- I have been working with the American Grassfed Association on standards for grassfed products to submit to USDA.
In terms of contacts and networking outcomes, overall 45% said they had contacted the workshop organizers or presenters for additional information following the workshop they attended (Montrose=100%; Colorado Springs=33%; Fort Collins=38%), and 58% had contacted other workshop participants after the workshop (Montrose=60%; Colorado Springs=60%; Fort Collins=54%). Finally, we have been contacted by staff from several other states about organizing and conducting a similar workshop for them.
Measurable accomplishments from the niche beef production and marketing workshops include steps that producers have taken to initiate or improve direct marketing and conduct business planning and development. They include the following:
1. Hollingsworth Land and Cattle Company started www.myownbeef.com to diversify into marketing directly to consumers.
2. Two families who attended the Colorado Springs workshop teamed up to start Colorado’s Best Beef Company www.cobestbeef.com. They are also selling to a Fort Collins restaurant.
3. A couple from Texas is now marketing their beef to restaurants in their area.
4. A family from Eaton has developed a retail marketing strategy and marketing materials and expanded their business from freezer sales to neighbors to a retail market place in Fort Collins, as well as a larger direct marketing base with customers in Northern Colorado. They are currently analyzing the advantages and disadvantages of selling frozen versus fresh product in the store.
5. The Gunnison Country Beef Producers, a group made up of several local beef producers, is now producing Gunnison Valley High Altitude, Grass Fed and Grass Fed Grain Finished Beef. The Gunnison Country Beef Producers have created the protocol of this beef product to meet their consumers needs, especially those who consider it important to know the source of their food product. The members have agreed upon pricing, procedures for taking orders, transportation of both live animals to the processing plant and finished product from the plant to the buyer's location.
Planning and business development:
1. A family from Stoneham, Colorado is developing a business plan based on the materials in the workbook.
2. The American Shorthorn Association conducted a strategy planning session with the help of the Department of Animal Sciences at CSU to develop marketing that includes establishing a label and filing for it officially.
3. American Grassfed Association’s identity marketing program developed a value-added grant to explore different certification processes, working with CSU staff in determining consumer perceptions and the potential effectiveness of different certification standards and labeling strategies.
The contribution to agricultural professional and producer understanding of this topic is: 1) a good, peer-reviewed reference workbook that details all of the steps and considerations necessary to either beginning or expanding a branded beef business; and 2) a workshop series that allowed participants to interact with speakers who had explored a variety of niches including grassfed, breed-specific, natural, organic and nutrition-based. Workshop speakers also had experience managing both small and large businesses, which enabled participants to better understand the costs, risks and business cycles inherent to the types of niches and scale of business. In addition, we sent out a CD of the entire workbook to each agricultural extension agent, NRCS and RC&D staff in the state of Colorado, to make sure that the workbook materials were widely available. Overall, this project gave field staff technical information on which to base trainings and to distribute to cattle producers, and it also gave them a list of contacts for more information.
a. Attendance: We feel that we were able to convey a tremendous amount of information to all the workshop participants - through the workshop sessions, contacts with other professionals and a good reference workbook. We did learn, however, that it is hard to contact our target audience. For each workshop, we did a lot of advertising, phone-calling and mailing to inform our potential workshop participants, yet we didn’t achieve the attendance numbers we had hoped for. This was due, in part, to difficulties contacting people who may not use the Internet regularly and to producer conflicts with other agricultural activities. Also, even though we tried to keep the cost of the workshop very reasonable, attendance by agricultural professionals within the state of Colorado was limited. Those who did attend spoke very highly of their experience and the knowledge they gained.
b: Materials format: The website was useful for extending the reach of the information into other states (and to Canada), but hasn’t been used very much by our workshop participants. Our participants have indicated that they use the print format of our materials and have shared that with others who may be interested.
c: Workshop format: In terms of the workshops, we learned that holding the third workshop several months after the first two allowed us to make some adjustments to the scheduling and to develop a complementary trade show for the Fort Collins workshop. The format of each workshop was varied by alternating plenary sessions with opportunities for networking with other participants and a field visit, which kept the format more interactive and helped to balance the large information flows with practical applications.