Final Report for FNC98-216
Project Information
PROJECT BACKGROUND
Our group is made up of small, family farmers who are concerned about sustainable farming. All operate diverse operations and specialize in beef, lamb, pork or poultry.
PROJECT DESCRIPTION AND RESULTS
The objective of the project was to attempt to market pastured beef, lamb and pork along with free range poultry via a modestly successful (14 year) mobile meat market called a Goosemobile.
We made two changes in marketing via the Goosemobile:
1) For fourteen years we sold poultry only. We added beef, lamb and pork to the product list in 1998. In 1999 buffalo, goat and ostrich were added.
2) For 14 years we used a freezer delivery truck where only one customer at a time could stand in the entry door to be waited on. For this project a 26 foot cargo trailer pulled by a pickup was filled with eight freezers whereby numerous customers could view product and shop at a time.
Three producers who farmed sustainably were recruited to be involved in the project to provide product, to help with retrofitting the mobile meat market and to assist in labor activities. Each producer was responsible for processing their animals or birds, vacuum packing the birds and cuts and weighing and pricing each package.
Each producer set his own prices. Generally, the prices were 40-50% above supermarket prices for the free range, pastured meats.
The duration of the project was 16 months: September 1, 1998 to December 31, 1999. During this time the mobile meat market toured South Dakota twice the first three weeks of December marketing for holiday feasting and gift giving. There are four major east-west highways across South Dakota. Generally these routes were followed for a total of about 3500 miles each year.
In 1998 sixty two stops were made in the larger cities and towns for 1-4 hours depending on the size of the town or city. In 1999 one hundred eighty five stops were made in every village, town and city in route for shorter durations of time. The gross revenue in 1999 was $18,695.44 and $17,828.99 in 1998 for an average of $18,262.22 with added product and walk in Goosemobile. The gross income was approximately $1000 more in 1999. But, the weather factor was much better in 1999.
The average gross revenue in 1998-1999 was $18,262.22 with added products and walk-in Goosemobile. The average revenue for 1996-1997 was $15,404.80 which the following chart indicates the dollar value of each type of product and the percent of gross sales this represented. Note that in 1999 three more types of red meat products were added to the Goosemobile product list: buffalo, goat and ostrich.
1998
Beef, 6%, $1,023.00
Buffalo, -, -
Goat, -, -
Lamb, 4%, $631.94
Ostrich,-, -
Pork, 11%, $1,894.00
Pillows, 8%, $1,504.00
Poultry, 72%, $12,774.04
1999
Beef, 7%, $1,208.68
Buffalo, 7%, $1,341.77
Goat, .5%, $93.48
Lamb, 3%, $560.86
Ostrich, 2%, $394.30
Pork, 12%, $2,243.45
Pillows, 5%, $905.00
Poultry, 63.5%, $11,871.60
Beef and pork sales increased slightly (1%) over 1998. lamb and pillow sales decreased one and three percent, respectively. Buffalo was a big surprise in that it equaled beef in sales. Goat and ostrich only appealed to the highly curious shoppers.
Poultry sales appear to have suffered with the addition of other products. The five year average (1993-1996) of poultry sales by the Goosemobile before adding the other products was $15,692.97. The 1998-1999 average was $12,322.82 for a 21% decrease in poultry sales when red meats were added to the products for sale. As we previously indicated, total sales increased on average of $2,857.42 with the addition of red meat products. This is a 16% increase in total sales.
How much did the new type walk in mobile vehicle influence the improved overall sales? There were many complimentary comments. Customers appreciated being able to get in, out of the weather as well as actively inspect the products in the various freezers.
During the period from May 1 through October 31 sales were limited, to a local farmers market in Sioux Falls, (100,000 population) for there wasn’t time to travel through the state and still raise and process the birds and animals. An accounting of the value of each type of product sold at the farmers market was not kept. But a gross income record is available.
1998 poultry only sales at the farmers market was $5209. 1999 poultry and red meats sales at the farmers market was $11,332.57. This was 117% increase in meat sales.
The difference between a 16% increase in sale of poultry and red meats around South Dakota versus a 117% increase at the local farmers market is probably accounted for by the difference in customer contact. When making 185 stops over three weeks, it is a hurry up situation. A five hours stand at a farmers market gives more time for salesmanship skill to be executed.
The total sales at the Goosemobile during the 1999 farmer’s market season was $15,062. This included in addition to the meats: baked goods, candy, pickles, flowers, herbs and few fresh garden products.
The cost of marketing via the Goosemobile on the routes and at the farmers market are as follows:
$1998, $1999
Newsletter printing, $779, $299
Bulk mail postage, 1691, 843
Press release, 83, 75
Personal travel expenses, 812, 765
Phone, 364, 160
Mileage (34 cents/mile), 1071, 1202
Weekly advertisements, 139, 335
Daily advertisements, 889, -
Radio advertisements, 342, -
Insert advertisements, 205, -
Return postage, 270, -
Labels (label & labor), -, 50
Labor (attaching labels), -, 54
Total case expenses, $6,646, $3,780
Gross income, $17, 829, $18,695
Percent cash expenses, 37%, 20%
Labor ($60 a day), $1,320 (22), $1,140 (19 days)
Percent expenses with labor, 44%, 26%
Farmer’s Market
Mileage (41 sessions/ 75 miles/ .34/mile), $1050
Stall fee, 450
Lunches, 144
Newsletter (1500/.09 each), 153
Postage (1500/.21 each), 315
Phone ($40/month for 8 months), 320
Misc. 186
Total expenses, $2,600
Gross income, $15,062
Percent expenses, 17%
Labor ($50/day/41 times), $2050
Percent expenses including labor, 31%
The primary means of advertising for the Goosemobile routes has been by means of newsletters to former customers on our mailing list. We hadn’t seriously tried other means of advertising. In 1998 with the help of the SARE grant, we tried four other advertising media: daily newspapers, weekly newspapers, radio and shopper inserts. In 1999 we made the decision to go only with the weekly newspaper and the newsletter. Weekly newspaper advertising is very reasonable and marketing professional highly regarded nurturing former customers. Note that the 1999 gross revenue was $866 more dollars than 1998 without the expense of daily newspapers, radio and insert advertising.
Through the years the newsletter to communicate with former customers was a single 8x17 sheet and the mailing was executed by us. Again, with the help of the SARE grant in 1998 a marketing firm was hired and the list was updated.
A much more elaborate four page newspaper type newsletter with more information and pictures was sent out by the company. The company was supposedly able to mail more cheaply in volume with their accounts and clean up the mailing list so not so many copies would need to be sent.
In 1999 we went back to a single sheet type newsletter mailed by ourselves. The results were a $866 increase in sales at less than half the expense.
We have substantiated two factors necessary for family farmers operating a mobile meat market to make a profit. First, they must sell a “niche” product that can command a premium price. Secondly, they must provide labor themselves until sales volume could substantiate hiring workers.
Custom processing is very costly and vacuum packing is necessary for customers appeal and longer shelf life of the frozen product. To give an idea of the appeal and longer shelf life of the frozen product. To give an idea of the costs involved with the direct marketing meat by the cut, we give the following example from one steer and six pigs raised and marketed by the producer and custom processed versus 400 chicken raised, processed and marketed by the producer.
Beef, pork, chickens
Income, $1934, 2034, 2000
Processing cost, -495, -803, -100
Gross profit, $1439, 1231, 1900
Value of animals or birds, -884, -525, -800
Gross profit, 555, 706, 1100
Marketing costs, -348, -407, -400
Net profit, 207, 299, 700
Profit per animal, $207, 50, 1.75
Profit per pound (live weight), 0.17, 0.20, 0.35
The following number of animals and birds were slaughtered during the duration of the project: 23 hogs, 3 beef, 20 lambs, 4018 chickens, 485 geese, 635 ducks, 409 pheasants, 187 turkeys and several hundred stew hens.
OUTREACH
Two press releases have been sent out to South Dakota newspapers. One announced the granting of the grant and the other was a progress report. Two letters to the Editor were sent out to South Dakota daily newspapers. Two presentations have been made: one to the Northern Plains Sustainable Ag Society and the other at the SARE Lincoln, Nebraska Conference. Numerous interviews were given to writers.
Plans are to produce a summary of the project news release. An article about the project will be written and submitted to several sustainable agriculture publications. We will be on call to provide presentations upon request by any organization.