Development of a Rancher Cooperative to Market Grass-Fed Meat

Final Report for LNC95-078

Project Type: Research and Education
Funds awarded in 1995: $33,300.00
Projected End Date: 12/31/1997
Matching Non-Federal Funds: $20,400.00
Region: North Central
State: Kansas
Project Coordinator:
Dan Nagengast
Kansas Rural Center, Inc
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Project Information

Summary:

The ranchers involved in this project knew that if we wanted to produce grassfed beef, we would have to create our own marketing system through which to sell it. Nevertheless, none of us had any idea how difficult all this would be.

Our SARE project objectives were:
a. Found a Marketing Cooperative or other rancher-controlled business
b. Develop quality control standards for production of grassfed beef
c. Conduct market research on grassfed beef with consumers
d. Explore processing options with small-scale meat processors
e. Develop a business plan to implement production and marketing program

First, we reviewed and discussed alternative legal structures such as corporations and partnerships. The ranchers then decided to form a cooperative and adopted articles and bylaws, (fully revised a year later to allow capitalization through marketing rights). We also developed a group process outline for decision-making and resolving conflicts. Internal harmony and cohesion are crucial for us. The co-op model has the advantages of pooling capital, labor and enthusiasm, and with the one-member one-vote provision, equalizing the power of all members regardless of size. In developing our business plan, we ran into huge challenges in the developing skills, procedures and infrastructure to manage what has become a manufacturing and marketing firm.

We conducted an extensive literature review on grassfed beef production. We decided to conduct our own production “research.” Based on the literature review and our best instincts from personal experiences in grazing cattle in the tallgrass prairie region, we began to produce and market grassfed beef. We have processed and marketed now over 150 head and continue to fine-tune our production model accordingly.

We tested the beef in a formal large blind taste panel, in our own rancher testing committee, in numerous promotions, and generally in the marketplace–the ultimate “test panel,” and find that grassfed beef is enthusiastically accepted by our certain market niche, and has distinct flavor appeal. However, we had to educate consumers as to how it was different, how to cook it, and its tremendous nutritional advantages. We conducted a Ranch Day inviting customers to come to our ranches to see the land, learn about ranching methods, and meet and form a connection to the people who raise their food.

We had to process in a federally-approved plant in order to sell out of state, so we explored the few federal plants which would handle small volumes, and then established a relationship with a small plant that did “private label” work for other small specialty meat companies. Our processing costs are very high compared to large-volume producers.

Related projects have been nutritional testing and obtaining USDA approval of a special claims label. This has been an incredibly complex, time-consuming and expensive, but essential to adding value to our premium-priced product to be able to sell at any profit. Results have shown grassfed beef has such significant nutritional advantages as to constitute nearly a wonder-food.

Realizing that we are still midstream in our development, basic conclusions we would submit at this point are: (1) it is possible to produce quality grassfed beef that is enthusiastically accepted by a niche market, (2) grassfed meat in general has exciting potential as a nutritionally excellent food source, (3) if producers want to direct market their products, cooperatives are an advantageous way to do it, (4) it may not be realistic to expect success from small producer marketing cooperatives unless (a) a great deal of training and guidance is available all along the way, and (b) adequate capitalization is available, and (5) producers going into such a business must be prepared to make serious commitments affecting work and family life.

Introduction:

Ranchers joining together to market grassfed beef reviewed choices of business entities and decided to form a marketing cooperative. They learned team-building and decision-making. They studied literature on grassfed beef production, but found their own trials to be most informative. Their marketing efforts found grassfed beef to be an enthusiastically-accepted product, particularly in the niche of consumer with concerns about health, the environment and animal welfare, although many buy it just for the exceptional taste. The most remarkable discovery has been the terrific nutritional profile of beef raised in this way–very low in fat and high in protein and iron.
However, the ranchers have had severe difficulties in keeping up with the challenges of developing product, developing a market, handling distribution, accounting, budgeting, inventory, database, etc. The complexities of managing a manufacturing and marketing firm were nearly all new–the beef business is totally different from the cattle business. Capital requirements have been stiff and personal demands on time difficult to bear. Nevertheless, the group has made great progress and attributes much of this to their cooperative model in which a group of committed people working together can accomplish much more than they could by themselves.

In summary, producing quality grassfed beef is certainly possible and the product has many advantages. However, creating an entirely new functioning market for it has been intensely difficult, but possible through the immense potential of motivated people working cooperatively.

Project Objectives:

a) To found a marketing cooperative, or other legal rancher-controlled business structure, with a defined group process for decision-making and project implementation.

b) To develop production standards and carcass grading standards for high quality meat product identified as “grass-fed”

c) To conduct market research with consumers to determine consumer desires in a grass-fed product

d) To explore processing options with small-scale meat processors.

e) To develop a business plan that would combine the results of the production processing and marketing studies.

Cooperators

Click linked name(s) to expand
  • Jerry Jost

Research

Research results and discussion:

a) To found a marketing cooperative, or other legal rancher-controlled business structure, with a defined group process for decision-making and project implementation.

First, the group reviewed the alternative business structures and produced the white paper “Considerations Concerning the Choice of a Business Entity.”

The group also conducted a session with a team-building leader to develop the following Group Decision-Making Process Outline to utilize in approaching all aspects of this project (see Report Appendix B). We have found this outline, which we developed on our own, has served us very well over the years. We use sections of it in every decision, and use it in entirety at strategic planning sessions or when a particularly crucial or divisive decision confronts us.

We also used personality analysis and team-building exercises to learn how each of us is different, and how we perform differently in group situations. We learned how to utilize each member’s strengths: we have some members who thrive on meeting the public, but are not so strong on personal organization and detail. These people are great in promotions.

Mechanically inclined members work on co-op equipment, and our more meticulous and detail-oriented members tackle jobs such as accounting, inventory and labeling issues. Instead of being frustrated that everyone is not just like we are, we feel lucky that our group is stronger as a whole because of our differences.

The group proceeded to form a legal marketing cooperative with full Articles and Bylaws and Marketing Agreement (all of which had to be fully revised about a year later). The co-op now consists of nine members who must be “family ranchers” — living on and doing the day-to-day work of their ranches themselves. Each family has bought Marketing Shares to capitalize the co-op, each serves on the Board of Directors and special Production or Marketing Committees, and each takes turns helping with the co-op work whether doing promotions, deliveries, quality testing, etc. Attendance at co-op meetings is mandatory.

All members have shown commitment and willingness to devote tremendous time, energy and what capital they could afford, to develop the co-op, although the level of time has well exceeded what all had anticipated. Nevertheless, having sacrificed as much as they have thus far, all want to see this through. For these ranchers, the many co-op meetings, deliveries, promotions, etc. have all become a routine part of their “ranch work.”

At this point, the advantages of the cooperative form of organization and of working together with other families to market cooperatively seem to vastly outweigh any disadvantages. Disadvantages might be seen as having to attend many meetings and the time involved in seeking consensus, that progress can be slowed by non-team players (those these tend to drop out after a while), and the unusual accounting and IRS regulations of cooperatives. On the other hand, the advantages of marketing cooperatively include the following:
• pools talent, energy and brain-power, increases breadth of perspective in decision-making
• pools capital to meet cash flow, equipment and personnel costs
• pools labor to fulfill co-op duties such as promotions, deliveries and transfers, committee leadership, etc.
• allow individuals with specialized knowledge to focus on areas of strength, i.e. production issues, developing promotional material, direct sales, label development, operations design, accounting, etc.
• pool product supply to even out shortages due to local drought, varying calving seasons, varying forages
• marketing advantage to consumer buying co-ops: co-ops like to buy from co-ops
• mutual support – excitement of teamwork and willingness to sacrifice for others create a group momentum that can overcome temporary discouragement of individuals

b) To develop production standards and carcass grading standards for high quality meat products identified as “grass-fed”

We have developed production standards for high quality grassfed beef products based on Literature Review (See Appendix C) and our own trials with over 150 head. They are as follows:
• predominantly British genetics – Hereford and Angus steers and heifers (no bulls)
• preferably 18 months of age and no older than 24 months of age
• rapid gain on quality forage of at least two pounds per day for 60 days prior to slaughter
• free range–no confinement in drylot and always access to standing forage
• primary nutritional source some sort of forage and supplement only to maintain animal health during low quality forage periods such as drought, snow-cover or extreme cold
• all beef must pass quality control testing including co-op taste panel checking flavor and tenderness as well as mechanical testing (Warner-Bratzler Shear Tester) for tenderness
• all animals treated humanely (follow HSUS principles)
• follow requirements of all other special claims of Tallgrass Beef label

All whole muscle cuts are vacuum-packaged and aged around 21 days to maximize tenderness and avoid shrink.

We developed the ten potential finishing models for a “normal” year, if one exists our region (See Appendix D). We believe ultimately each producer should develop his/her own least cost program using what forages/hays are available. Producing year-round beef including during winter months continues to be a terrific challenge, as alternative winter annuals are not always reliable and we are subject to snow cover and weather extremes. But this is an area that needs more exploration. Also, partnering with ranchers from southern regions is a possibility.

We have decided not to use the conventional USDA grading standards as they put a premium on fat which we are trying to minimize (see note below) Instead, we want to produce lean and tender beef. All animals must pass our quality control testing which includes review by our co-op taste panel which must approve both taste and tenderness, and a Warner-Bratzler shear test. Also, to guide in future production decisions, each producer receives carcass data showing overall box weight yield and breakdown of yield by different cuts. Producers are paid on Hot Carcass Weight.

Note on Nutritional Characteristics of Grassfed Beef

Nutritional analysis was not within the scope of this project funding, but the striking nutritional characteristics of grassfed beef are worth mentioning. First, grassfed beef can be pushed to grade Choice under limited circumstances, but in this project the ranchers decided not to try to grade their product according to USDA “Quality Grading” standards which identify quality with additional marbling or fat in beef. Instead they chose to produce healthier beef according to the USDA’s recommended Food Pyramid which says we should limit fat in our diets (the reverse of the USDA grading system). As a result we use the word “finished” less than others as it conventionally implies the intentional deposit of fat in the carcass, whereas for us it simply means growing the animal to the desired ending weight.

Most “lean” beef now sold is grain-fed in feedlots and “lean” due to genetics and trimming. In contrast, the grassfed beef raised in this project is naturally dramatically lower in fat, requiring little or no trimming, due to the simple fact that the cattle are never fattened. These striking fat level differences are hard for some experts to accept as they have become accustomed to beef as an inherently high-fat, high-calorie meat. But, there is nothing intrinsically fat about cattle–it is how they are raised. Instead of being fed 25 pounds of grain a day for three-four months, grassfed cattle are simply eating “salad”–the forages to which they have adapted over the millennia to process in their rumen and turn into muscle. As many health-conscious consumers desire alternatives in low-fat protein sources, with grassfed beef, they can enjoy the chance to eat beef again. Others who don’t care about calories simply prefer grassfed beef for its exceptional full beef flavor, a result of the natural forage-based diet.

(c) Conducted market research with consumers to determine consumer desires in a grass-fed product.

We did conduct market research with consumers including a large organized sensory panel, two focus groups, a Ranch Day attended by over a hundred people, and numerous informal trials with samples at promotional events. However, our primary form of “market research” has been through our sales and customer feedback.

Many consumers do not initially understand the distinction between grassfed vs. grainfed without some explanation, as they have only vague notions of how beef are produced. Even many consumers predisposed to “natural” or hormone-free beef still have never heard of actual grassfed or “free range” beef, since even “natural” or “organic” beef is currently mostly fattened in feedlots (though its purveyors say little about feedlots). A few who do know more initially will have a prejudice against grassfed as inferior, based upon association with cull cow beef known in industry as “grassfed” (very cheap ground beef). Others suspect loss of quality resulting from less fat due to the conventional wisdom–a view that is very much institutionalized in the USDA grading system–that the fatter beef is, the better it is, and the reverse. We know there is a large segment who will never change their minds and are deeply convinced that marbling equals quality, and our goal has always been to promote grassfed beef, not to denigrate grainfed beef. Even among those with more open minds, there are still many who hesitate on grassfed beef because they believe leaner beef must be tough.

However, we find, within the right target market, once consumers understand what quality grassfed beef is, and even more dramatically, once they taste it, they are sold. Some like it for very specific reasons: because it is lower in fat, because it is free range or never confined (due to combination of environmental and animal welfare concerns), because it is raised without inputs such as hormones or antibiotics in feed, or simply for its exceptional taste.

A great part of the co-op’s marketing goal was to help recapture some of beef’s lost market share: to bring consumers back to beef who had left it for various reasons including health, environmental and animal welfare considerations. We tried to design our product to meet every possible consumer objection to beef (except the fundamental vegan requirement of no meat in the diet–not much we can do with that). Again, though, humans being the pleasure-seeking creatures we are, we have found our greatest asset has been the wonderful taste of this beef. When it’s all said and done, food can be politically correct, but unless it’s tasty, you have an awfully hard sell. Fortunately, we could sell grassfed beef easily on taste alone. (But this still doesn’t mean creating that market is easy–see Section 10 – Areas Needing Further Study.)

d) To explore processing options with small-scale meat processors

We researched various plants in our area and learned about the limitations of state-inspected plants: that we could not market beef processed in them anywhere but in state. We then researched the few federal plants in Kansas which would handle small volume. They are a rarity as the expense, pressure and increasing complexity and federal regulation of such operations makes it an unattractive venture. Almost all small processors we spoke with were very discouraged and wished they could get out of the business.

We finally decided on a family operation that was somewhat inconvenient geographically but not too terrible. This company does quite a bit of private label work for other small meat companies, and its owners and employees have been an invaluable and trusted resource for us. However, even though all processing is contracted to our processor, we learned we its services are limited–they “don’t take you to raise.” Instead we have our own Operations Manager who spends time at the plant and is very involved supervising processing and packaging. This in-plant presence we have learned in essential to achieve the results we need.

The problem we continue to face in working with our processor is how to cut costs. We find that the smaller scale processing with its low volume is so much more expensive, that it is very difficult for our prices to be competitive with conventional beef. This is one of our biggest problems. We can process from one to twenty head at a time in our plant. The next step up sized plant, which would be much less expensive in processing, requires regular loads of a minimum of forty head at a time–beyond our reach at this time.

Also we have struggled to capture the value of the “fifth quarter” or hide and offal, which larger meat companies can utilize for a major profit enterprise. But once again, volume is the key and we are a long ways from having 600 hides to fill one truck to send to the tannery.

We see from these obstacles that it is all the more important that our product be seen as a premium, specialty item, which simply cannot compete generically on the supermarket shelves with beef from the large volume monopolies.

e) To develop a business plan that would combine the results of the production, processing and marketing studies

Our Business and Marketing plans are constantly evolving and adapting as we find our way in the marketplace. We realize every co-op will have unique features and emphases in its product and marketing plan. As a guide to new cooperatives, we have distilled our experience and produced the attached “Business Plan Outline for Grassfed Beef Co-op” (See Appendix E) which contains sections specific to plans for grassfed beef cooperatives.

Research conclusions:

A. Marketing Cooperatives are a Complex, but Promising Answer for Producers:

We find ourselves now frankly amazed at the magnitude of this project. We would advise farmers wishing to market their products to plan ahead how they plan to establish the policies, procedures and infrastructure they will need. Areas which were especially challenging for us are:
• record keeping for USDA label
• production scheduling and coordination
• capitalization and cash flow
• gross margin analysis
• budgeting
• supply management
• inventory control
• accounting – invoicing, accounts receivable, cooperative patronage records
• storage and delivery
• job descriptions for employees

Add to above-listed challenges the degree and complexity of regulation of beef labeling for niche market beef products (i.e. natural, nutrition facts, etc.), and you have a “brick wall” too intimidating to most small producers. Indeed, if we were working as individuals, we would have given up long ago. However, as a cooperative, we share our varied skills, energize each other, establish internal discipline and shared responsibility, thereby making our goals more attainable.

B. Grassfed Beef is Good!

We feel we can serve as official “mythbusters” against the notion that lean, grassfed beef is low in quality, i.e. tough and bad-tasting. Yes, it can be those things when proper production methods are not followed or it is over-cooked, but produced with correct genetics and with rapid gain on high quality forage the last sixty to ninety days, properly aged and cooked correctly, grassfed beef is of excellent quality and exceptional nutritional value because it is naturally low in fat and cholesterol. And most important of all to the marketer, it tastes great!

We feel the impact of these revelations is far-reaching, and will promote increased free range, forage-based beef production, resulting in obvious benefits in energy conservation, soil conservation, and water quality enhancement as well as offering the consumer a very healthy product.

Economic Analysis

The scope of this grant did not cover economic analysis of production and marketing grassfed beef. In fact, we decided that we would let each ranch determine and manage its own internal costs of production. It was challenge enough for us to manage the post-slaughter costs of production for the co-op. However, we will go ahead and note here one of the most significant factors of on-ranch production: if the animal does not mature and has to be kept through a second winter, the increase in cost is substantial and a much larger premium needs to be earned for member rancher profitability.

As for the co-op, our budget and basic assumptions are new enough that we are constantly revising them and adjusting variables. Of course these variables will be different for every product and every type of market and distribution channel. But for basic planning purposes, we can relate the following lessons we learned, which are probably very elementary to economists, but were fairly complex and challenging for many of us to assimilate.

Basically, the economic variables needed to determine gross margin and profitability for the grassfed beef marketing cooperative are:
• Volume (no. head)
• Hot Carcass Weight
• Retail Pounds from Hot Carcass Weight (actual saleable weights, or “boxed weight”)
• Sales (an overall sale price–an average of all the cuts in ratio to their proportion of total carcass)
• Purchases (overall cost–again based on hot carcass weight paid to ranchers)
• Direct costs (processing, bags, labels, storage, etc.)
• Overheads (administrative and selling costs)

The overall formulas we use to see if we are operating profitably are:
Sales less Purchases equals Gross Product.
Gross Product less Direct Costs equals Gross Margin (figure also on a per pound basis)
Gross Margin less Overheads equals Profit/Loss.

These figures can only be generated by estimate at first and then historical data as you begin production and marketing. Of course they are all inter-related and a change in one (i.e. price, or carcass yield, processing costs, etc.) will affect the whole outcome.

We have found it is possible to produce, price and sell our product at levels which will give us an adequate gross margin. But, our primary challenge has been to increase volume so that it covers our overheads and brings us into the breakeven range. Also, initial product research and development costs and co-op equipment purchases have been difficult to cover. Finally, the need to cover the purchase and other direct costs of beef for about 90 days between until actual receipt of income has caused us cash flow problems. Adequate capitalization is a constant issue.

Farmer Adoption

All nine members of our cooperative have now raised and marketed grassfed beef through our cooperative and have committed future supply to meet market needs (see Cooperators section). We have a long ways to go to actually meet our goal of 100 percent of each ranch’s beef production being marketed through our co-op, but this is our goal.

What specific recommendations would we make to other farmers in terms of day-to-day operations? Should others try what we are trying? We are still struggling and not yet in a position to say: Yes, this works. We are confident that we have a good chance to succeed, but also many chances to fail if we are not careful. We would advise all farmers wanting to direct market meat that they need to acquire extensive new knowledge and skills, specifically in these areas:
• basic business management
• marketing in the food industry
• meat inspection and labeling
We would advise against our own initial tendency to oversimplify our task and expect immediate results. The ranchers in this project now realize they were charting unknown territory on more fronts than they ever initially dreamed and are looking at project that will likely take 3-5 years to develop, instead of 12-18 months. Before this project, only one producer was selling grass-fed beef products and only on a tiny scale as locker beef. We knew of only one successful rancher-co-op we could use as a marketing model, but since it was marketing the familiar feedlot beef consumers were used to, and was located near the coast and big urban areas, our challenges were very different.

In fact, geography is the fundamental factor in how you can market. For the producer group that is remotely located, the luxuries of having consumers drive to the ranch to purchase or making direct deliveries in town just aren’t viable options. This changes everything. We know of a number of direct marketers who are successful within a 30-mile radius of a larger town. None of us are. We live in isolated areas and delivery and distribution are major problems.

In retrospect, once into the stream, we realized that by direct marketing grassfed beef we were swimming against the current of the beef industry on its two most fundamental levels–
• In production – by producing forage-finished, extra-lean beef and abandoning the grain-finishing, feedlot model with its conventional grading standards which reward marbling in beef and instead proudly displaying nutritional information on our lean beef
• In marketing – by forming a producer-owned marketing cooperative and managing that cooperative by ourselves, constructing our own procedures and business infrastructure, instead of employing consultants and managers (whom we couldn’t afford)

We learned quickly that although there was great interest in this by other producers, no one else was doing what we were doing. The excitement of this soon evolved into confusion, bewilderment and frustration. Although we have had dedicated and sincere advisors, we could find no experienced mentors or models of grassfed beef producers on the scale at we wished to produce. They may be out there, but we did not know of them.

Even the wonderful new generation co-ops of the northern Midwest seem based on the large-scale, bricks-and-mortar model: raise millions to build a plant, and hire experts to run it and market the products produced. And though there may be one somewhere, the fact is we found no textbook that tells you how to do this. We have read some basic college marketing and management textbooks that have helped on fundamentals, but of course they assume very different sorts of business entities and structures than ours.

Finally, we think producers must frankly deal with the issue of personal time invested in the marketing co-op. For our members, working in the marketing co-op had to become a part of their ranch work-day (not every single day for most, but many, many days). Also, a core of leaders must be willing to devote huge blocks of time, for a period of years. This is a daunting prospect, and one which we might not have undertaken had we been fully aware of it. Sometimes it’s good not to know, but yet it also prepares you to better meet a challenge if you know of it ahead of time.

But in the end, the issue of “sustainability” for producers must apply to their own quality of life as well as to their treatment of the environment. How much personal sacrifice can producers sustain, and for how long? Marketing is a huge time commitment. How much time away from family and off the land are producers willing to give? This has been the hardest thing for many of us, as family and land were the things which initially impelled us to undertake this project. The sad irony of our current struggles is painfully apparent. We can only hope that we will reach a critical stage at which the time investment will become more manageable.

And, it is quite possible our struggles have been unnecessarily awkward and time-consuming; perhaps others could have done it more quickly and easily than we have. We see many mistakes now and things we look back on and would have done differently. Also if other groups are better capitalized than we were, they could have hired professionals to do the jobs we have had to do ourselves. Although there is the advantage of doing things yourselves: then you truly understand what is happening. We understand the Dakota Lean owners got into serious trouble because their employees were doing things they didn’t know about.

But for all its difficulties, we know there are many producers out there who are motivated to change the paradigms and would welcome the challenges of forming a marketing co-op. The pioneer spirit has always been alive and well in American producers. We believe a rising tide lifts all boats and hope others will take on this challenge, and we hope this report can be a help.

Involvement of other audiences – i.e. Consumers

(Also see Outreach section for itemization of programs for other producers and consumers).

In October 1996 we conducted our first “Ranch Day” or customer appreciation event, held on one of our member’s ranches and attended by over one hundred people. We introduced our guests to our beautiful scenery, ranch life and the philosophy behind our product and cooperative. Participants were very enthusiastic. We served a delicious steak dinner, had prairie tours explaining our unique system of beef production, historical exhibits, and educational speakers. We also participated in a large outdoor concert at which we had an educational display and producers on hand to visit with city people.

In our promotions, we give cooking demonstrations on how to prepare lean beef and explain to our customers how our beef is different. Working from our homemade booth of leather and wood, and dressing in our western work clothes, we have won awards at trade shows where professional salespeople often appear bored and complacent in their pre-fab fiberglass and plastic displays. We are fired up and naturally motivated about this product we raised ourselves. We have fun meeting consumers and we think they really enjoy meeting producers.

We have conducted other educational sessions for urban audiences. For example, we gave a program on rural economic development through marketing cooperatives, and have a slide show for laypersons which illustrates grassfed beef production and its inherent conservation of prairie, timber, water and wildlife resources, and the philosophy of direct marketing to preserve family ranches and rural communities.

Participation Summary

Educational & Outreach Activities

Participation Summary

Education/outreach description:

The following list is inclusive of articles and presentations also listed in our Annual Report of December 15, 1996 and those since; however, please see the December 5, 1996 report for actual copies of articles published prior to that date.)

On a basic level, we have been available to numerous individual producers who have contacted us (through telephone and correspondence) with questions on grass finishing and direct marketing.
In addition, we are reaching producers and consumers through the following published articles on our product, methods and mission (arranged here by date):

• Nancy Smith, July 23, 1995, “A Way of Life–Flint Hills Rancher Works with the Land,” Lawrence Journal World, p. 1-2D.
• Nancy Smith, July 23, 1995, “Beef Cooperative Organized,” Lawrence Journal World, p. 2D.
• October 1995, “Tallgrass Prairie Producers Introduce Tallgrass Beef,” KRC Rural Papers, p. 6.
• November 1995, “Sustainability Roundup is set for Dec. 2,” High Plains Journal, p.8B.
• Anne Browning Wilson, Fall 1995, “Grassfed Beef and Family Ranches: A Vision for Prairie Landscape and Communities, ” Land Report, No. 54, pp. 17-19.
• Norman Rose, Jan.1996, Chapter 7 “Grassfed Beef and Lowfat Cooking,” DHEA The Miracle Hormone & No Fat Cooking.
• Jerry Jost, February 1996, “Marketing Co-op Offers Learning Experiences,” KRC Rural Papers, p. 4, No. 126.
• Anne Browning Wilson, February 1996, “Tallgrass Beef on sale at Merc,” Merc News, p. 13.
• May 1996, “Tallgrass Beef,” Chase County Visitor’s Guide – Spring & Summer Guide 1996, p. 12.
• May 1996, “Pasture-Raised, Lean Beef from the Flint Hills,” Tour Kansas Guide, p. 12.
• November/December 1996, “Tallgrass Producers Thank Their Customers,” KRC Rural Papers, No. 154, p. 4.
• Kelley S. Carpenter, December 13, 1996, “Ranchers coming to Lawrence to discuss naturally raised beef,” Lawrence Journal World, p. 3D.
• Stan Finger, June 6, 1997, “Turning Back the Clock on Beef Production,” Wichita Eagle (p. 1A – front page)
• Associated Press, June 7, 1997, “Ranchers Raising Free Range Beef,” Emporia Gazette, p. 1 – (front page) – this articled was syndicated through Associated Press in other newspapers as well, but we do not have copies of all.
• June 11, 1997, “Area Briefs – Information available on co-op’s grass-fed beef,” Wichita Eagle, p. 13A.
• October 14, 1997, “Core Group Weekend on Cooperatives,” Chase County Leader News, p. 8.
• (Anne B. Wilson is being interviewed October 28 for article in upcoming Farm Talk newspaper; also Kelly Lens of WIBW Ag Issues program has requested an interview)

We have also reached producers and consumers through participation in the following conferences, panels, presentations, booths & displays, and radio and television programs:

• October 26, 1995, Anne B. Wilson, “Small Business Collaboration in South Central Kansas,” Leadership Butler Conference – Economic Development Session, Rose Hill, Kansas.
• December 2, 1995, Anne B. Wilson – “Labeling Requirements for Beef,” Heartland Roundup-Sustainable Ag Conference, Manhattan, Kansas.
• January 25, 1996, Pete Ferrell, panel discussing community supported agriculture: “Guidelines” (television program), KTVH-Channel 12, Wichita, Kansas.
• February 15, 1996, Anne B. Wilson, “Producing Grassfed Beef in the Flint Hills,” Society for Range Management – International Convention, Cottonwood Falls, Kansas.
• March 9, 1996, Monica J. Young, “Producing Grassfed Beef, ” Seminar “Marketing Co-ops: These Folks Do It,” co-sponsored by Tallgrass Prairie Producers and Green Hills Farm Project, Trenton, Missouri
• March 9, 1996, Anne B. Wilson, “Early Stages of a Grassfed Beef Cooperative,” Seminar “Marketing Co-ops: These Folks Do It,” co-sponsored by Tallgrass Prairie Producers and Green Hills Farm Project, Trenton, Missouri
• June 12, 1996, Earl B. Wright, “Kansas Flint Hills Ranchers Create a Market for Grassfed Beef,” Integrated Farming Systems conference, North West, Maryland.
• July 4, 1996, all rancher members, educational exhibit (photo display, handouts, brochures) at Brass on Bluestem concert, Matfield Green, Kansas.
• October 11, 1996, “Tallgrass Beef and Family Ranches” slide show, Sierra Club, Wichita, Kansas.
• November 10, 1996, Anne B. Wilson, “Tallgrass Beef and Family Ranches” slide show and “Developing a Small Marketing Cooperative,” Farmers Union Conference, Topeka, Kansas.
• December 7, 1996, Anne B. Wilson,”The Tallgrass Prairie Producers Story,” Heartland Roundup-Sustainable Ag Conference, Manhattan, Kansas.
• December 7, 1996, Monica J. Young, “Pasture Finishing Research,” Heartland Roundup-Sustainable Ag Conference, Manhattan, Kansas.
• January 3-4, 1997, Earl B. Wright and Anne B. Wilson, “Cooperative Marketing – Flint Hills Ranchers Create a Market for Grass-Finished Beef,” Practical Farmers of Iowa Winter Workshops, Ames, Iowa
• January 20, 1997, Earl B. Wright, “What is Direct Marketing?” Heartland Cluster Group, Ramona, Kansas.
• January 26, 1997, Earl B. Wright, “Direct Marketing Through a Producer Cooperative,” Regional Direct Marketing Meeting, sponsored by Kansas Rural Center, Omaha, Nebraska.
• February 11, 1997, Earl B. Wright, Demonstration on Free Range Beef, Lawrence Chefs, Lawrence, Kansas.
• February 21, 1997, Cathy and Jim Hoy, Interview on Grassfed Beef Coop – WIBW Radio “Food Talk,” Topeka, Kansas
• March 12, 17 and 27, 1997, Anne B. Wilson, Slide Show and “Low-Fat Beef from the Tallgrass Prairie” presentation to Wesley Health Strategies’ Low-Fat Cooking class, Wichita, Kansas
• April 5, 1997, “How to Connect with Local Food Buying Clubs,” Community Mercantile Co-op, Lawrence, Kansas
• April 15-16, 1997, Booth with display, literature and samples, Restaurant and Hospitality Trade Show, Wichita, Kansas (received first prize for booth)
• May 2-4, 1997, Booth with display, literature and samples, Kansas Products Expo Trade Show, Topeka, Kansas (received first prize for booth)
• May 16, 1997, “Health Fair” at Love Box Co., Wichita, Kansas
• May 27, 1997, Earl Wright, “Low-Fat Beef from the Tallgrass Prairie” presentation to clinical dieticians at Via Christi St. Francis Hospital, Wichita, Kansas.
• May 28, 1997, Earl Wright, “Low-Fat Beef from the Tallgrass Prairie” presentation to clinical dieticians and students in Via Christi Preventive Health Strategies Weight Loss class, St. Joseph Hospital, Wichita, Kansas
• June 12, 1997, Anne B. Wilson, “Ranchers Add Value to Revitalize Rural Economy,” presentation to Place-Based Education Workshop of rural educators, Matfield Green, Kansas
• July 24, 1997, Arlan Stackley, “Lean Beef from the Flint Hills,” Lions Club, El Dorado, Kansas.
• September 11, 1997, Pete Ferrell, on-farm tour for Heartland Grazing Cluster, Beaumont, Kansas.
• September 18-20, 1997, Booth with display, literature and samples, Natural Products Expo East Trade Show, Baltimore, Maryland.
• September 30, 1997, Pete Ferrell, moderator of panel on “Rancher Direct Marketing,” HRM Conference, Elko, Nevada
• October 7, 1997, Anne B. Wilson, participant, teleconference meeting on Marketing Grassfed Beef (nationwide – organized by Jerry Jost, Heartland Network)
• October 15, 1997, Dorothy Glass, “Health Fair,” Topeka, Kansas.
• October 19, 1997, Anne B. Wilson, “From Romance to Reality: Ranchers Learn Co-op Management,” Farmers Union Core Group weekend, Topeka, Kansas.
• October 21, 1997, Anne B. Wilson (Five Oaks Ranch – Elmdale, Kansas) and Pete Ferrell (Ferrell Ranch – Beaumont, Kansas), on-farm tours and presentations on “Producing Beef Sustainably,” for Land Institute Interns from Salina, Kansas.

Project Outcomes

Recommendations:

Areas needing additional study

1. We need more research on the nutritional advantages of grassfed beef. Initial results indicate much lower fat and actually higher iron and protein. Is this always true and if so, why? How do different forage production models, seasonality, genetics, etc. affect nutritional content? Also, what is the full story on linoleic acid levels in grassfed vs. grainfed beef? Is this truly a beneficial dietary characteristic? Also, how can public be educated to these advantages in grassfed beef?

2. How can we prepare producers for the many complexities of business management inherent in developing and managing a processing and marketing company? How can we alert farmers-to-be of the breadth of management skills beyond on-farm production that they will need to be valuable members in a small producer co-op? These skills include
• bookkeeping and accounting, including receivables, payables, payroll, sales reports, taxes, etc.
• establishing and maintaining databases (i.e. customers if direct marketing)
• inventory tracking, supply and usage management – tracking and filling orders
• distributions management: freight and delivery
• creating adequate capitalization
• budgetary supervision: determining adequate capitalization levels, managing cash flow and tracking gross margins
• written, verbal and graphic design skills to develop promotional material including labels, brochures, displays, booth signage, presentations
• product research and development
• group leadership, conflict resolution and meeting facilitation
• personnel management: co-op members, officers, employees, sales reps
• production/supply management – planning and scheduling with ranchers to meet supply

3. How can we assist small producer co-ops in learning about the food industry and how it works, and help in discovering a cost-efficient distribution system for their product. Most producers know little about the food distribution system and need education in the alternatives they have to reach the consumer with their product: distributors, brokers, sales reps, delivery options, etc. Producers are very naive about the complexities of food distribution, and initially tend to oversimplify the process, blaming middlemen for sucking off profits that should go to the producers. One thing we have learned is the tremendous expense and difficulty (impossibility?) of getting our product to the consumer by ourselves in profitable volumes, and are now turning to the much-maligned middleman to help us. Also producers need training in how to promote their products and service accounts, and how to develop effective promotional materials.

4. How can we educate producers in the complexities of labeling so that they can fully comply with the USDA FSIS requirements and not commit unintentional errors for which they will be nevertheless be liable? We read of the Dakota Lean case (small family-owned natural beef company–owners now in federal prison) in horror and continue to live in fear that we may have committed some unknown infraction that will destroy us and make us into criminals–a total nightmare. Without large budgets to hire consultants, meeting these requirements has been one of the most formidable obstacles for the ranchers, although by the close of this project they had finally achieved some of their labeling goals–after about three years of work and great expense. These labeling procedures are extremely technical and expensive–almost overwhelming to laypersons. We know they are important for consumer safety and truth-in-labeling and would never suggest doing away with them–but perhaps stating them in lay language in manuals.

5. High processing costs put small volume meat producers at a terrific disadvantage price-wise in the marketplace. This is all an issue of volume. Small companies are paying processing costs of 30 cents a pound and up, while the four huge packers who have monopolized 84% of the industry operate at volumes where their processing cost is down to a few cents per pound. The significance and burden of this cost cannot be overstated and remain the Achilles Heel of profitability for smaller producers. What are the solutions for bringing down these costs to smaller producers (or breaking up the monopolies with their unfair advantage)? If processing costs could be reduced, producers would have enough profit margin to hire more experts and consultants to perform the very burdensome development and management roles we have had to personally assume at great sacrifice (and probably inefficiently due to inexperience).

6. How can we encourage the USDA to refine its definition of “free range” to make sense with respect to beef. It currently simply means not confined in a building means more with respect to poultry). Of course, beef cattle are not confined in a building. We need a definition which clearly and simply communicates the distinction between cattle confined in drylot conditions (feedlots) and those raised entirely on standing forage. As it is, this definition has become rather meaningless, as has “natural,” so there is little incentive for the producer who really does raise cattle free range.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.