Final Report for LS00-116
Many beef producers in the United States are experiencing the effects of concentration in the cattle industry through lower market prices. In Oklahoma, where cattle are the number one commodity raised in the state, ranchers are looking for alternative ways to market their cattle. However, most ranchers do not have the time, expertise and network to develop organizational and relational plans to market their beef.
The goal of this project is to explore the feasibility of linking a producer retained-ownership program with small independent packers to market quality natural beef products within Oklahoma, Texas, and Kansas and to review the effects of agricultural policy on the participants in this process. Using a whole systems approach, the priority area will be to research the feasibility of producers marketing their beef products directly to the consumer using a cooperative network of producers and packers. Sharing information, marketing channels and marketing duties will allow producers the opportunity to realize more on-farm income.
The research objectives are:
1) develop a beef producer survey to investigate producer interests in being linked with packers and exploring value added marketing strategies;
2) develop a survey that will be distributed to small independent Oklahoma beef packers to investigate characteristics of packer operations, their interest in being linked with producers, and equipment needs to provide retail packaging;
3) obtain information and expertise from the Oklahoma State University Food and Agricultural Products Research and Technology Center on collaborative value added natural beef marketing strategies;
4) design and distribute a pretest market survey, perform test market research for value added natural beef products by developing and distributing an in-store survey to a sample size of 400 consumers;
5) analyze government policies and programs that effect the feasibility of linking beef producers and packers with consumers; and
6) hold regional state focus group meetings in each quadrant of the state, and conduct producer and packer group sessions to develop producer networks to be linked with participating packers.
The project outcome is to develop a research plan that will identify areas of need and available resources for producers and packers who are interested in linking together to produce, process, and market sustainably raised beef. Areas of need will be analyzed and responded to by providing timely educational and technical assistance. If the results from the consumer test market studies are positive, the Kerr Center for Sustainable Agriculture (KCSA) intends to develop a pilot program.
The research and education plan includes a variety of farmers, institutions, and foundations. The KCSA will serve as the lead project investigator. The OSU Food and Agricultural Products Center will serve as co-investigators. The Food and Agricultural Products Center and OSU Extension will provide technical support and educational materials on business plans, and value added marketing examples from other states. Results from the study will be provided on the KCSA website, and will be available at our offices in hard copy. The research findings will be published in the KCSA monthly newsletter, which has approximately 4,000 subscribers. Results will also be made available through the OSU Extension Service, Oklahoma Department of Agriculture, and the Oklahoma Land Stewardship Association.
- Develop a beef producer survey to investigate producer demographic and socioeconomic information, farm size, cattle numbers, current marketing methods, and interests in value added natural beef marketing strategies.
Develop a survey that will be distributed to small independent Oklahoma beef packers to investigate the characteristics of packer operations, their interest in being linked with producers, and equipment needs to provide the retail packaging.
Obtain information and expertise from the Oklahoma State University Food and Agricultural Products Center on collaborative value added natural beef marketing strategies.
Perform market research for value added natural beef products by developing and distributing a survey to Oklahoma, Texas, and Kansas consumers.
Analyze the government programs and policies effecting the feasibility of linking natural beef producers and packers with consumers.
Hold regional focus group meetings in each quadrant of Oklahoma and conduct interview sessions to assess the means by which a producer marketing network linked to interested packers may be developed.
An emerging trend in the food industry is that farmers and ranchers are no longer just raising commodities, they are joining cooperatives (Suber, 1999) and marketing alliances to capture more farm income by turning raw commodities into value added products (Hassebrooke, 1999). Value added investments can increase or decrease in value, but they still offer a better long-term return than selling raw farm commodities in the open market (Sayler, 1997). Cooperatives can offer smaller and moderate-sized farmers more efficiency and bargaining power by combining production and negotiating jointly as a group rather than individually (Hassebrooke, 1999).
Some producer owned cooperative organizations may resemble "strategic alliances" or vertical cooperation (Den Ouden et al, 1996), defined as "individual firms or organizations in two or more adjacent stages of production-marketing channel without full ownership or control by individual firms" (Ward and Estrada, 1999, p.1). Producers involved in marketing alliances maintain their own operations but share information to be more effective in product marketing (Ward and Estrada, 1999).
Alliances may be capable of responding quickly to variations in consumer demand and are able to produce for niche markets (Ward and Estrada, 1999), such as marketing natural beef direct to supermarkets (Hassebrooke, 1999). In todays market, the demand for high quality beef is much greater than the supply (Denton, 1997). Some ranchers are focusing on producing high quality natural products and marketing them directly to consumer off the farm, at the farmer's markets, and through community supported agriculture programs (Hamilton, 1996).
Natural lean beef is becoming the healthy preference for consumers concerned about health and the environment (Lipson, 1998). Jens Knutson, Vice President of Industry and Regulatory Affairs for the American Meat Institute says, "consumer interest in natural beef is growing", and she believes there is a "strong business incentive to sell natural beef: the all natural segment is less than 5 percent of the total beef market, but every percentage point equals 250 million pounds" (Lipson, 1998, p.1).
Dick and Kim Cates have a family farm in Spring Creek, Wisconsin, and have been producing and direct marketing natural beef for 10 years (Mayer, 1999). Jim and Kerri Schiermister of Kaycee, Wyoming are ranchers who sell their beef directly to consumers, but the product called Gold Buckle Beef received most of its exposure from being served at a local restaurant, and now they are trying to keep up with demand (Bopp, 1999). Some family farms have begun marketing their beef on the internet, like Lasater Grasslands Beef farms marketing beef as "Free range product directly off the Western range" (Lasater Grasslands Beef, 1999).
Beef marketing alliances and/or cooperatives are being developed and joined by producers across the United States to produce consistent high quality products to respond to consumer demand, and to realize more on-farm income (Hassebrooke, 1999). Other proposed reasons historically for developing alliances (Mighel and Jones, 1963) have been risk and cost reduction, management improvements, increasing bargaining power, achieving better market position, assuring adequate inputs, investing extra reserves, developing new technology, and obtaining additional capital (Ward and Estrada, 1999).
Today, there are at least 30 beef alliances in operation across the U.S. (Ward and Estrada, 1999). According to a Successful Farming survey taken in 1997, the number of cattle in alliances showed increases from 30 percent to 2300 percent. If that trend continued into 1998, at least 10 percent of the total cattle slaughtered have been marketed under some form of marketing alliance
(Fee, 1997). Coleman Natural Beef is the largest processor of all natural beef in the United States, where " 'All Natural' means cattle which haven't received hormones or antibiotics either injectable or in the feed from birth to market or no animal by products in the feed" (Fee, 1997).
Other alliances have been formed through the benefit of USDA SARE Grants for producers interested in cooperative ventures which sell products directly to retail stores and consumers. Diana Endicott and the Rainbow Organic Farms Company is an All Natural Beef Cooperative that is made up of twenty producers in Southeastern Kansas that sells products directly to retail stores in Kansas City, Kansas under their own label. Annie Wilson and the Tall Grass Beef Cooperative in Elmdale, Kansas will be in operation again after a reorganization this year marketing natural grass fed beef. Another SARE project, Healthy Meats in Madison, Wisconsin, supplies fresh poultry, lamb, pork and beef directly to consumers. The Kerr Center planning project will be able to use some of the information gained through surveys and experiences of Rainbow Organic Farms, along with information gained from other SARE projects.
In addition, the Kerr Center has had success working with the farmer's markets in Oklahoma, and has been reponsible for the formation of other producer groups such as the Shiitake Mushroom Association and the Oklahoma Land Stewardship Association. The Kerr Center would like to provide farmers and ranchers in Oklahoma, Texas, and Kansas education and technical assistance that would be beneficial to them in forming a producer marketing network.
The tax credit offered in Oklahoma under H.B. 2959 for investing in value added processing makes this a seemingly opportune time to assist producers in looking at cooperative marketing ventures. Under H.B. 2959, for each $1 invested in value added processing, the producer receives a .30 cent tax credit they can spread out over 5 years.
Statement of Problem, Rationale, and Significance:
In Oklahoma, cattle are the number one agricultural commodity, yet very little is being done to assist ranchers in retaining ownership past the sale ring. Family ranchers in Oklahoma have been unable to form a network that is capable of addressing their long-term marketing needs concerning beef production. Coordination is needed in a formal environment to facilitate communication between producers and small packers. The research planning proposal will assess the needs of farmers and ranchers for information on the feasibility of marketing natural beef as a value added product. The results will provide policy-makers with information on the current agricultural policy constraints that effect the linkage and marketing processes producers and small packers participate in so that state and federal laws can be changed to promote rancher retained-ownership and marketing.
The project holds potential to positively effect the economics of the region's rural ranching areas by assessing and providing information necessary to begin pilot regional beef marketing cooperatives, alliances, or other forms of networks. The information gleaned from the planning stage will be used as vital information in the formation of networks of producers and packers dedicated to providing sustainably grown beef directly to consumers. Information gained from the producer and packer surveys will allow both parties to explore possible business structures that will compliment the participants' relationship. In addition, results from the consumer marketing survey will provide producers with a range of value added marketing possibilities to explore.
The Oklahoma Legislature, through the passage of the Oklahoma Agriculture Enhancement and Diversification Act in 1999, has realized that this is an opportune time to promote the interest of agriculture in the state by providing financial assistance to projects concerning value added processing and marketing to benefit producers (Oklahoma H.B. 1197).
One category of the funding proposed in the Act includes new and better uses for existing agricultural products by the financing of marketing feasibility studies, business plans, and test marketing.
The social impact of the proposal will give producers more control over their business, by providing information to allow them more options for product distribution. Producers will be armed with information that will provide improvements in agricultural policy and marketing. It will provide packers with another potential customer base. Consumers will gain an awareness of the various types of beef production and become a closer link to ranchers. The research plan will provide an excellent opportunity to reach producers in Oklahoma and impact, with practical information, the process of sustaining the existence of family farms. The plan will also encourage increased communication between farmers and ranchers in the state.
Government Programs Affecting Linkages
Oklahoma has implemented several programs and tax credits that benefit agricultural producers. The following programs and incentives could assist the Kerr Center in creating a link between natural beef producers, small packers, and consumers:
"Made in Oklahoma" and "Grown in Oklahoma" Logo Program
Created in 1991, the "Made in Oklahoma" Program directs the Oklahoma Department of Agriculture (hereinafter ODA) to establish a program "promoting foods, products, and services produced within Oklahoma" (2 O.S. § 5-9 (1991)). The ODA has designed both "Made in Oklahoma" and "Grown in Oklahoma" logos for products which are either raised or processed in the state. Producers whose products are eligible for the Program receive the added benefit of the ODA's advertising and exhibits.
In 1998, the purposes of the "Made in Oklahoma" Program were expanded. The legislature directed the Department of Agriculture, the Department of Central Services, and the State Purchasing Director to cooperate in creating new markets for local agricultural products (2 O.S. § 5-11 ( 1998)). These agencies work together to identify the needs of institutions, universities, agencies, municipalities, and other political subdivisions. The Program encourages state, local, and federal entities to purchase Oklahoma grown and produced agricultural products by providing an expeditious purchasing process for those items. The ODA serves as a link between Oklahoma producers and these entities The ODA has been authorized to assist producers in contracting with these organizations.
The "Made in Oklahoma" Program would be available to a natural beef group which raised and / or processed its cattle in the state. The ODA's resources could be used to obtain marketing information, identify institutional consumers, and assist with any contracting.
Oklahoma Agriculture Enhancement and Diversification Program
In 1999, the legislature enacted a law creating the Oklahoma Agriculture Enhancement and Diversification Program and Fund. This Program provides grants and loans for value-added agricultural products which benefit producers (2 O.S. § 5-3.2 (1999)). The grants or loans are available in the following categories:
1) Cooperative marketing - provides funds for establishing an agricultural production, processing, or marketing cooperative, which fosters diversification and encourages processing innovations;
2) Marketing and utilization - provides funds for creating marketing plans for Oklahoma agricultural products by financing feasibility studies, business plans, and test marketing;
3) Farm diversification - provides funds for family farm or ranch projects that diversify the operation through nontraditional crops and livestock or provide on-farm processing of products; and
4) Basic and applied research - provides funds for business creation research likely to lead to a marketable product.
Sales Tax Exemption
Like many other agricultural states, Oklahoma provides a sales tax exemption for most farm and ranch purchases including building materials, supplies, fuel, and feed (68 O.S. § 1358 (1981)). The Oklahoma law also contains provisions that allow a producer to sell his products on a limited scale without charging the consumer any state sales tax. 68 O.S. § 1358 (A) (1) provides a state sales tax exemption on agricultural products sold by the producer directly to the consumer when the sales are made "at or from a farm." This provision allows producers to provide similar products as retail stores but at a slightly lower price. With the emergence of the Internet as a viable marketing tool, this exemption might encourage more direct marketing of agricultural products.
Income Tax Credit
In 1996, the legislature provided an Oklahoma income tax credit to encourage investment in Oklahoma producer-owned agricultural processing cooperatives, venture, or marketing associations (2 O.S. § 2357.25 (1996)). The law allows up to a 30% credit against a producers's state income tax for any direct investment in such ventures. The total credit cannot exceed one million dollars. If the credit exceeds the amount of tax due, it may be carried forward for a period of six years.
All of these programs provide resources and incentives to Oklahoma agricultural producers and could be used to develop a link between ranchers, packers, and consumers.
The first grant meeting concerning "Developing Plans for Sustainable Beef Marketing Strategies" was held at the OSU Food and Agricultural Research and Technology Center in Stillwater, Oklahoma April 26, 2000. Attendees at the meeting included: 1) Jane and Roger Skelton representing Skelton's natural beef, Texhoma, Oklahoma; 2) Rodney Holcomb, Associate Professor and Agri-Business Economist from the OSU Food and Agricultural Products Center; 3) Clem Ward, Ag-Econ professor, OSU Extension; 4) Brian Freking, Kerr Center Livestock Production Specialist; and 5) Eric Allenbach, Kerr Center Public Policy Analyst. The first part of the grant meeting was dedicated to review and discussion of the grant purpose: "To gather information during the research process that will enable us to more effectively assist farmers and ranchers in Oklahoma, Texas, and Kansas in locating viable natural beef marketing opportunities to increase income of producers and small Oklahoma processors." In addition, the group reviewed the grant objectives and cooperators divided reponsibilities and tasks for the project. Meeting sites were discussed for producer grant meeting locations. Jane and Roger Skelton provided us information on their natural beef operation conerning their protocol and procedures involved in production and marketing of natural beef direct to consumers and to retail stores. The meeting provided an excellent foundation for the success of planned activities.
The first grant objective was to develop and distribute a beef producer survey to farmers and ranchers in Oklahoma, Texas, and Kansas (See Producer Survey, Appendix A). The results will be helpful in the formation of a producer network for the pilot project. The producer survey was developed by Eric Allenbach and distributed using contact information from the Kerr Center newsletter mailing list, an Oklahoma SRM mailing list, and a Kansas Rural Center list.
There were 106 surveys returned from beef producers in Oklahoma, Texas, and Kansas. 66% of surveys were returned from respondents in Oklahoma, 15% from Kansas producers, 4% from Texas producers, and 15% unknown. The producer survey includes demographics, general management information, current marketing strategies, direct marketing information, and descriptive information regarding land and crops utilized in livestock production (See Producer Survey, Appendix A).
Information from beef producer survey results includes 76% of cowherds are purebred, and size of herds range from 51 to 100 head. According to the Oklahoma Agricultural Statistics Service 1999 Annual Report, 37% of cattle operations in Oklahoma are less than 100 head. 66% of respondents do not use implants which means many producers may already meet that requirement in a natural beef protocol. Key information obtained from results suggest 11% of respondents had participated in a marketing alliance, and every producer said they received added value. 86% of respondents said they would be interested in participating in a marketing alliance (See producer survey and results, Appendix A), which many producers later reaffirmed at Kerr Center natural beef meetings in April, 2001. In addition, almost one third of respondents retain ownership of their cattle through the finishing stage on a consistent basis. Almost one third have sold beef products directly to consumers, restaurants, or retail stores, with most activity on a limited basis. In the land and crop section, producer responses showed a variety of crop and grass production utilized in livestock production . In summary, the results to the survey are encouraging and provide a verification of interest from respondents in the formation of a producer marketing network. If producers could achieve significant increases in returns by producing and marketing natural beef, more may shift to production practices to meet a natural beef protocol.
The next survey activity was the distribution of an Oklahoma meat processor survey mailed out by the OSU Food and Agricultural Products Center. The survey instrument used was written by Clem Ward, OSU Extension Ag- Economist for a project in 1983. The survey instrument was updated to provide a comparative analysis of Oklahoma meat processing business in 1983 and 2000. Processors were informed about the survey previous to mailout through information provided in the Oklahoma/Texas Meat Processors Association Newsletter. 157 surveys were mailed out and 35 completed surveys were returned (See processor survey and results, Appendix B). A second mailout was done and 47 completed surveys were used to report final results.
Information from the processor survey results suggests (See "Operational Changes and Management Issues for Oklahoma Meat Processors", Rodney B. Holcomb and Clem E. Ward, Appendix C) that many Oklahoma meat processors are relatively small operations. According to a comparative study by Holcomb and Ward, in 1983 there were 225 meat processors, and in 2000 the number had declined to 157. In addition, over half of the respondents from the processor survey identified themselves as custom slaughter and meat processing operations (Holcomb and Ward, 2000). The study suggests the main source of growth for Oklahoma meat processors since 1983 has been in the area of further processed meats (Holcomb and Ward, 2000). According to Dr. Holcomb, many processor respondents showed an interest in examining the feasibility of adding new value added processing enterprises to their existing operations. The main concern for natural beef producers identified by Dr. Holcomb is few existing Oklahoma processors have a large enough slaughtering capacity or the federal inspection status needed for a large natural beef operation. Note in table 3 of "Operational Changes and Management Issues for Oklahoma Meat Processors", in 1983 8% of meat processors had a cattle slaughter capacity of more than 75 head per week, as compared to no respondents represented in the more than 75 head per week category for 2000. Dr. Holcomb has also provided vital information on planning for a value added venture.
Throughout the grant project, information was obtained from Rodney Holcomb at the OSU Food and Agricultural Products Center at OSU on value added marketing. Information was provided on how value added closed cooperatives had been formed in other parts of Oklahoma, specificly Value Added Partners, LLC in Alva, Oklahoma. Over 800 farmers from Oklahoma and Kansas have invested in a frozen dough cooperative whose main market is pizza shells. They also make cinnamon rolls, croissants, specialty breads, etc. The cooperative has been a great success so far, and they plan to put a retail store at the plant this year.
The final survey was an in-store consumer marketing survey distributed to consumers at supermarkets in Oklahoma City, Dallas, and Kansas City, Kansas. The survey instrument was a modified version of the original survey used in a previous study by Givry, 1998. Diel and Associates of Perkins, Oklahoma administered the surveys at each location collecting quantitative and qualitative information from consumers. It is important to note differences in Diel, "Study of Consumer Perceptions of All Natural Meat Products" and the Givry study, where Diel and Associates collected a large amount of qualitative data in addition to quantitative, and surveys were distributed in three metro areas instead of one, allowing for comparison of regional consumer perceptions (See consumer study, Appendix D).
Probably one of the most significant policies effecting the linkage of natural beef producers, packers, and consumers is the inspection status of various meat processing facilities. Most plants in Oklahoma are state inspected plants, which would confine sales of natural beef products to Oklahoma. It is important that new plants with federal inspection status are constructed, or the status of existing plants are changed to meet federal guidelines. Producing natural beef products for consumers in Oklahoma is a good beginning, but additional revenues from out of state markets could provide more flexibility for natural beef ventures.
Focus group meetings helped identify producers based on levels of individual interest, capabilities, and cooperation to be included in a pilot project. The purpose of the study was presented at the meetings, along with the results from the producer, processor, and consumer surveys. Mike Callicrate was the keynote speaker at the meetings and provided information on direct marketing of natural beef and the new Mississippi Family Farm Initiative (See Family Farm Initiative concept paper, Appendix E). Many producers at the natural beef focus group meetings were interested in how to duplicate the efforts of the Mississippi Family Farm Initiative in Oklahoma.
Natural beef marketing meetings were held April 18, 19, and 20 in Tulsa, Wilburton, and Chickasha. The meetings were advertised in several places by a number of organizations including the Kerr Center Newsletter, a Famer's Union Newsletter, A Farm Bureau Newsletter, Oklahoma Living, The Cowman, The OSU Cooperative Extension Service, The Oklahoma Land Stewardship Association, and several local newspapers.
The first meeting was held in Tulsa on April 18th at the Northeast Campus of the Tulsa Community College (See meeting schedule, Appendix F). The meeting had an attendance of 25 people including beef producers, finance professionals, university and extension professors, and Kerr Center employees Eric Allenbach and Brian Freking. On April 19, the second meeting hosted by the Kerr Center was held at Eastern Oklahoma State College in Wilburton, Oklahoma. The meeting had 17 attendees including beef producers, extension agents, university professors, and Kerr Center staff. The final meeting was held in Chickasha on April 20 at the OSU Cooperative Extension Office where there were 27 in attendance including loan officers, attorneys, veterinarians, feedlot owners, extension personnel, university professors, beef producers, and Kerr Center staff.
Each meeting began with registration, followed with a short introduction of the planning grant project by Eric Allenbach from the Kerr Center. The grant purpose and objectives were briefly explained at each focus group meeting (See meeting schedule, Appendix F). At the end of the introduction, a short five minute video produced by Market to Market was televised to meeting participants explaining how Skelton's Natural Beef in Texhoma, Oklahoma produces and sells natural beef. Several beef producers expressed interest in participating in a future pilot project with the Kerr Center by marking pilot project on the meeting registration form.
Mike Callicrate, a cattle feeder from St. Francis, Kansas was the keynote speaker for each meeting (See -meeting schedule, Appendix F ). Mike began his presentation talking about the problems of concentration and captive supplies in the cattle market. He informed meeting participants about his own direct marketing venture for selling natural beef, Ranch Foods Direct, LLC. Mike presented information explaining why beef producers don't receive fair prices for cattle in the current marketing system - there is not a link between prices paid at the farm gate and at the retail level. Callicrate further emphasized beef producers need to think about going around the present marketing system and possibly setting up a not for profit organization that buys cattle from producers and sells the beef at the retail level - returning premiums to producers.
Mike Callicrate presented the Mississippi Family Farm Initiative as a model for a not for profit entity which would provide ranchers an opportunity to realize greater returns on their cattle past the farm gate (See Family Farm Food concept paper, Appendix E). The organization was set up as a not for profit so producers wouldn't have to invest anything in the organization to receive back premiums on natural beef products sold at Family Farm Food retail stores. In Mississippi, the processing plant, value added kitchen, and retail store are being funding with public and private funds. Private entities that provide capital for startup will get a 10% return on capital.
Under the Family Farm Food plan, cattle producers will receive market price for their cattle from Family Farm Foods and will receive a premium check when the natural beef product is sold. Natural beef products along with other locally raised commodities and products would be sold in Family Farm Food stores in urban areas. In Oklahoma, stores could sell natural beef, pork, chicken, breads from Value Added Products, and fresh vegetables produced by under served farm populations in Oklahoma. Such a system would allow family farmers and ranchers to market agricultural commodities in the form of finished products directly to consumers.
The next presenter at the meetings was Rodney Holcomb, an agribusiness economist and associate professor at the OSU Food and Agriculture Products Center (See meeting schedule, Appendix F). He reminded meeting participants how much the agricultural industry has changed just in the last 15 years, and stressed that farmers now more than ever have an opportunity to capture a greater percentage of income beyond the farm gate. Dr. Holcomb discussed the phenomenon of value added marketing cooperatives that came about in the late 80's and 1990's. He pointed out that more than $1.2 billion was invested in farmer owned cooperatives during that time period. Dr. Holcomb discussed the early challenges of putting together plans for the frozen dough cooperative in Alva, Oklahoma, and some of the obstacles it had to endure to be successful. Over 800 wheat producers from Oklahoma and Kansas are invested in Value Added Products, a farmer owned cooperative. The cooperative has provided jobs for people in surrounding communities, is a non-polluting operation, and has increased state gross revenues and tax revenues from hard red winter wheat produced in Oklahoma.
Dr. Holcomb provided several reasons for the early success of Value Added Products including allocation of state funds by Oklahoma for new value added ventures, assistance from the OSU Food and Agriculture Products Center, tax credits, and the Agricultural Diversification and Enhancement Act of 1999. Dr. Holcomb then presented steps for planning a value added processing venture which could possibly provide farmers with an additional source of income. Rodney concluded the presentation by informing participants about the resources available through the State of Oklahoma and Oklahoma State University.
After lunch, Eric Allenbach presented the results to the beef producer survey (See producer survey and results, Appendix A). The next presentation was given by Dr. Rodney Holcomb covering the results to the processor survey (See processor survey results, Appendix B). The final presentation was made by Tom Diel. Diel and Associates administered in-store consumer surveys in the Oklahoma City, Dallas, and Kansas City Metro areas.
The results from the in-store consumer surveys are provided in the "Study of Consumer Perceptions of All Natural Meat Products". The survey instrument was replicated from a previous survey used in a study by Sebastien Givry in 1998 at Kansas State University. Diel and Associates distributed surveys in stores with no natural meats, some natural meats with regular meats, and other stores had only natural meats in Dallas, Oklahoma City, and Kansas City Metro areas. Quantitative and qualitative data was collected during the survey process. Numbers of completed surveys collected were 212 from Dallas Metro stores, 140 from Kansas City stores, and 105 from Oklahoma City stores for a total of 457 surveys (See Appendix D, p. 1).
Some interesting results from the consumer study by Diel and Associates include a higher percentage of consumer respondents in Texas and Kansas believe they are more informed about how meat is raised and processed than respondents in Oklahoma (See Appendix D, Question1, p.2). In addition, 75-80% of all respondents said it was important to know the meat purchased can be traced back to the farm and animal of origin, and only 3% answered it wasn't important (See Appendix D, Question 2, p.3). A range of 58% to 85% of consumer respondents check food ingredient labels for additives and preservatives (See Appendix D, Question 3, p.3). Almost 30% of respondents in Oklahoma and Kansas purchase natural or organic products frequently to always, as compared to 74% in Texas (See Appendix D, Question 4, p. 4).
Factors concerning consumers most when purchasing beef products include- Oklahoma 22% labeling, 46% taste and tenderness; Kansas 19% labeling, 66% taste and tenderness; and Texas 40% labeling, 50% taste and tenderness (See Appendix D, Question 5, p.5). It's interesting that Oklahoma respondents were over twice as concerned than Texas and Kansas consumer respondents about the price and brand of beef product. When respondents were asked in Question 6 what image they associate with all natural beef products, Kansans answered 65% no antibiotics or hormones and 19% taste and tenderness; Texans answered 79% no antibiotics or hormones and 11% taste and tenderness; and Oklahomans answered 46% no antibiotics or hormones and 27% taste and tenderness. An interesting answer on the same question by Oklahomans was that 17% associated family farms with all natural beef.
Other results include beef consumption ranked very high by Oklahomans - 58 % eat beef 3 or more times per week, and Kansans and Texans were evenly distributed between 1and 3 times per week (See Appendix D, Question 8, p. 7). Oklahoma respondents consume more hamburger than steak;- hamburger 53%, steak 33%; Texas hamburger 40%, steak 47%; and Kansas hamburger 7%, steak 38%, and other 54% (Appendix D, Question 11, p. 8). Respondents in every metro area answered in question 13 that health and safety concerning meat products is extremely important.
The Kerr Center will be forming a steering committee to discuss duplication of The Family Farm Food Initiative in Mississippi. The steering committee will meet in June, 2001 to discuss the activities and funding for a pilot project. Some members of the steering committee have already been selected and include Jim Horne, Kerr Center CEO and President; Rodney Holcomb, professor and agribusiness economist with the OSU Food and Agricultural Products Center; Dr. Wagner, OSU Animal Science Department Head; and 4 beef producers from different parts of the state who signed up for the pilot project. The Kerr Center will be applying for additional funding from SARE and other granting sources to continue the natural beef project. Activities and results in the planning phase of the natural beef project have been very encouraging and there is a great amount of interest in the project in Oklahoma, Texas, and Kansas.
The Kerr Center and the OSU Food and Agricultural Products Center shared several duties on the natural beef project. Eric Allenbach, the project coordinator developed the producer survey and handled its distribution. Clem Ward and Rodney Holcomb at OSU developed the processor survey which was distributed to Oklahoma meat processors. The Kerr Center contracted with Diel and Associates to perform in-store surveys and to provide a final consumer report on consumer preferences toward natural meats. The OSU Food and Agricultural Products Center tabulated survey results from producer and processor surveys. The Kerr Center planned and advertised for the natural beef focus group meetings in Tulsa, Wilburton, and Chickasha.
Eric Allenbach, the project coordinator was responsible for grant design and activity management. The Kerr Center will be seeking new participants from under served Native American and Black populations in Oklahoma to be involved in a future pilot project.
All of the planning grant activities have been completed for "Developing Plans for Sustainable Beef Marketing Strategies." Beef producer, processor, and consumer surveys and results are in the Appendices of this report. Interest from beef producers is strong enough to proceed with development of a beef producer network. We are in the process of forming a steering committee to continue our progress on the natural beef project. Steering committee members selected for a Family Farm Initiative in Oklahoma include Mike Callicrate- feedlot owner and rancher; Jim Horne- President of the Kerr Center for Sustainable Agriculture; Rodney Holcomb-associate professor and agribusiness economist with the OSU Food and Agricultural Products Center; Don Wagner, OSU professor and department head for Animal Science, and 4 beef producers from different parts of Oklahoma. A committee will be meeting in June and discussing the submission of a SARE research and education proposal. The research and education proposal will be submitted to SARE by August 31, 2001. In addition, the Kerr Center will be seeking funding from other grant sources to fund a natural beef pilot project.
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