An Analysis of Producing and Direct Marketing Pasture-finished Beef

Project Overview

FNC96-154
Project Type: Farmer/Rancher
Funds awarded in 1996: $5,912.00
Projected End Date: 12/31/2000
Region: North Central
State: Wisconsin
Project Coordinator:
Thomas Wrchota
Cattleana Ranch

Annual Reports

Commodities

  • Animals: bovine
  • Animal Products: dairy

Practices

  • Animal Production: free-range
  • Farm Business Management: budgets/cost and returns, marketing management, feasibility study, market study

    Summary:

    PROJECT BACKGROUND
    In the growing season of 1994, the Grant Recipients researched (with the help of SARE Grant, FNC93-040), the start up of a small seasonal dairy heifer grazing operation. All fixed and variable inputs had to be bought and utilized within a very short period of time. Twenty five acres of cropped land were fenced and seeded down with a cool season grass legume base, the summer of 1993.

    Twenty Holstein dairy heifers, from two local farmers, were researched over the 1994 growing season. When entering the grazing system, the heifers mean age was 13.75 months, 732.75 pounds, and had a height of 47.90 inches. During the grazing season, the heifers put on an average of 58 pounds of gain per month. At that time the project was completed, on October 5th (17.75 months of age), the animals weighed an average of 965.75 pounds, and stood at 50.62 inches. The heifers gained an average of 1.86 pounds per day during the research study, eating only growing forage, minerals, and drinking water in each paddock. Eleven of the animals were artificially inseminated during the project. This analysis helped support other projects’ results; that adequate heifer weight and height gains can be achieved by control grazing dairy heifers.

    Not only were the dairy heifers researched, but also the costs associated with the summer operation were reviewed. In addition, the quantity and quality of pasture, available to the cattle were tested. It was determined that the paddocks in 1994, could support 38 dairy heifers (on 25 acres) with similar weights, and have a cost to this producer, of $0.97 (with a 7 year depreciation schedule, or $0.79 @ 15 years) per head per day. With a charge of $1.40/head/day, this seasonal heifer raising operation would be cost competitive with larger, year round contractors. Therefore, the 38 head seasonal grazing enterprise would garner a minimum return of $2,451 (to labor & management) above costs, or $25.33/hour in wages, in five months.

    On May 25, 1995, 47 Holstein dairy heifers were locally contracted and arrived on the farm. Five more acres of pasture was fenced, to help lessen the heavy stock pressure on the paddocks. They had a wide range of ages and weights (from 450 pounds to an estimated 1200 pounds), and some heifers had been bred prior to their arrival on the farm. Their weights were not tallied for the season that ended, September 22nd, but after 121 days on grass they all looked healthy and in good condition. During the summer, several animals were artificially inseminated by their owners. The newly purchased beef bull bred various heifers, the last few weeks of the grazing contract.

    The bill for contract grazing the heifers was $6796, or only $1.20 per head per day. However, the farm’s fixed and variable costs, associated with seasonal grazing dropped from $0.97 to $0.83 (or $0.79 to$0.65, using a 15 year depreciation) per head per day. Therefore, there was a net return to labor and management of $2075.79 for the grazing season. Looking at the figures differently it is $17.16/day, or a summer wage (after taxes, etc.) of $22.76/hour (estimating 100 hours of labor for the season).

    It was determined that this type of grass system and minimal infrastructure could also be easily transformed into a beef operation, providing more financial and production flexibility to its owners.

    As of June 4, 1996, this farm had; four Galloway beef cows, a few bull claves, a yearling herd bull, three fist-calf heifers, and five Galloway steers, averaging 695 pounds each. The Grant Recipients were in the process of developing, a Healthy and “Green” Beef Direct Marketing Niche. The very best Galloway heifers and bull calves would be saved for breeding stock needs and client requests. Additional Galloway steers, would be purchased from the other Mid-West breeders.

    PROJECT DESCRIPTION AND RESULTS
    What was the main reason that the Farmer-Rancher wanted to produce pasture-raised beef?

    In 1990, we happened upon a grazer, Bill Thackray (an Eastern Wisconsin Sustainable Agriculture Network member), who finished Beefalo mostly on grass and legumes. He was the only grazer direct selling grass finished beef, within an hour’s drive of my wife, Susan and my newly purchased farm. We bought about a quarter of a side of Beefalo that day. After finishing the first meal, we knew that producing great tasting and healthy beef, was going to be one of our entrepreneurial objectives. Keeping costs down, maintaining animal health, being environmentally conscientious, and producing high quality healthy beef, meant our primary feeding system would be Management Intensive Rotational Grazing (MIRG). Hay (small bales and large square bales) would be the principle feed and wind shelter for the cattle in the six months of cold temperatures and deep snows, common in our Upper Great Lakes location.

    Why is a cow/calf through finishing, controlled grazing system desirable?

    1) During most portions of the cattle economic cycle, using a low input/management intensive system, on farm stocker production costs can be more reasonable and predictable. This system is most effective if the calving is done during the spring grass flush, and capturing the cow’s ability to store and burn off body fat. Measuring the cow’s body condition (BCS), is critical for successful management. However, when off farm stocker purchases are utilized and cheaper, it helps reduce the volatitly of production costs.
    2) The animals are trained from birth, to the fences, corrals, and the operator, causing less on farm “wrecks”
    3) Disease and health concerns can be greatly reduced and controlled with self produced, low stress stockers. This system provides us with chemical free, tender beef for our market niche
    4) By retaining and control grazing the steers and other young stock in front of, or along side of the cow calf group, it allows for better and more efficient utilization of the sward.
    5) Since most of the steer finishing is completed during the growing and fall stockpiling seasons, the herd is often largest in the early grazing months, “harvesting” the excessive growth of the grasses. Later on, the smallest group (numbers of total weight) goes through the expensive winter months.
    6) After a few years of personal observation, the on farm calves, have averaged about a .50 pounds of gain/day over the purchased stockers. Since faster gains means less days to finishing (est. cost of $70/day/head), two added months lowers profits by about $45.75 per head.
    7) Most purebred breeding stock buyers have been very positive and impressed by the looks and stature of our “no grain/no shelter” cattle. Unlike most other operations, our cows have been able to nurse their calves throughout the entire winter months, and maintain good body condition, without excessive hay expenditure. There have been no breeding problems. This eliminates the need for calf supplements, lessens labor costs, and the adding of another separate animal group on a small farm. Savvy clients, note the “honest” rates of gain, aggressive grazing behavior, docility, better hooves and body muscling, along with the understanding, that calf grass-only feeding systems help develop healthy rumens for better sward utilization.

    Why did Cattleana Ranch select Black Galloway cattle?
    Simply, they fulfill the needs of our meat customers, the breeding stock clients, along with keeping our farm costs low, and environmentally sustainable. They harmoniously fit in to the type of land, weather, healthy meat, and management style at Cattleana Ranch.

    Galloways are a English type cattle, that are often cited, as animals that mature at an earlier age, and have a moderate frame size. The 1950s type Angus, or the Hereford breeds are commonly mentioned as direct market beef alternatives. Faster maturity means less time on farm (e.g. less expense), and moderate frame size aids the local processors’ handling ease and costs. More importantly, over the last decade the American consumer is eating moderate and healthier portions of red meat, which the Galloway can provide.

    The strongly polled Galloway were ultimately chosen, because; they are double hair coated for winter energy/feed savings, black skin/hair for better environmental protection, and very aggressive/efficient grazers for less costly feed bills. The dams mostly calve unassisted, having very strong mothering instincts, and also provide financially optimum levels of milk to a 65 to 85 pound calf. In the Upper Mid West and Canada, she still maintains many of the primitive survival and genetic characteristics, similar to the Bison, but is mostly a docile and aloof animal. The Galloway sire was selected because he was; docile, structurally sound, long of body, a heavy muscled animal, carrying plenty of meat on the rump, rounds, ribs, shoulder and along the top line. Since, Estimated Progeny Difference (EPD) evaluations and “no grain” management are rare among Galloway breeders, the next sire will be selected from the best grass gaining and longest bull-calf.

    Several years ago, the US Meat Animal Research Center, in Clay Center, Nebraska (MARC), food sensory panels ranked grain finished Galloway beef above the 11 other breeds analyzed. Galloways ranked; 1st in flavor, 2nd in tenderness, and 2nd in juiciness. There was one genetic pool of Black Galloways tested by MARC that appeared to be very tender. In the same analysis, Galloways had; the lowest exterior fat thickness, the highest percent retail product, the 2nd highest rib eye area, and the 2nd highest meat dress out percentage.

    Some musings, including a financial review of the budget and outlook, for Cattleana Ranch:

    Past review of Iowa’s beef cattle accounting records, indicate that the difference between high and low profit herd is due, about half, to production output and half to the cost of production. So, this financial “fault-line” should be looked at below. In addition, the Stand Performance Analysis (SPA 1991-1994 results), developed by the National Cattleman’s Association (NCA), which analyzed 296 herds, in 20 states, will help bring some light to Cattleman’s current financial condition and future strategies.

    Keep in mind that this year round beef operation is only several years old, and prior to this period custom dairy heifer seasonal grazing, was initiated in the spring of 1994. The infrastructure is mostly complete, but does not include all the fencing and pasture needs for future enterprise growth on an attached 40 acres of cropland. The current 30 acres of pasture and fencing, can handle about25 adult animals, not the 17 head that are in this research project. As of spring 2000, there are 25 head on the property. Over 1600 small bales of hay were made, during the good grass growing season, of 1997. So, there is still some stocking rate leeway, using our present system. However, by 1999, due to the increased herd numbers and drier late summer conditions, very little hay could have been harvested.

    The cow/calf SPA results show that the top 25% most profitable ranches have an annual cost per cow of $327.83. At Cattleana Ranch, were the accounting rules appear to be more conservative, the costs are $349.84. The top ranches had a 85% annual calf crop. So far, we have been at 86% however, the number of head is still very small. Even though our calves are mostly born in June and July, and were still on their mothers, as of December 31st, 1997, the claves closely match the 538 pounds weaned group of the top herds studied. It is assumed that the size of the SPA herds were considerably larger than our mere 17 animals, so there is considerable potential to become a very low cost agricultural enterprise. Our farm cow/calf costs represent 61 percent of he variable costs, and are 37 percent of all associated cattle per unit costs. Once again, Cattleana Ranch’s hay costs fall within the parameters commonly cited by researchers.

    It appears that the near term monetary benefits, would be; to expand the cattle numbers by seven head (achieved by Spring, 2000), which would lower annual fixed costs by about $35 per head, and variable costs by an estimated $20 per head, plus increase total revenues to the business. This will be accomplished by retaining beef heifer calves, and buying some additional stockers.

    Since one of the key variables to our profitability, is low cost feeds (like MIRG and grass stockpiling), the beef cows are calving I the prime growing season (i.e. May 25 to July 25), so their body condition scores (BCS) are at least “5”, and they are eating a very nutritious grass (60%-70%) legume (30%-40%) diet. So far, calving and breeding problems have been very minimal.

    In 1997, the grazing season was extended to the 2nd week of December versus the 2nd week of November in 1996. The spring of 1997, was very late, so the cattle started grazing stockpiled feeds just a week sooner than in 1996. Since the cows’ hay cost are about $0.92 per day, versus $0.16 per day (includes, seed, fertilizers and pasture planting), during the growing season, we saved over $28 per cow and bull, and about $15.50 per stocker. So, there was an approximate savings of $360, by extending the growing season for 17 animals. Following, is a complete financial summary of our cattle operation during the 1997 season.

    Annual Variable Costs:
    Vet and Medicine, $84.70
    Feed and Minerals (excl. hay), $130.69
    Repairs, $170.00
    Seed/Lime/Fertilizer, $250.00
    Fuel, gas, oil, $180.00
    Total Variable less hay, $743.39
    Hay (@ 0.74 147 days), $1,849.26
    Total Annual Variable Costs, $2,592.65

    Annual Fixed Costs:
    Depreciated (15 years below see TFC), $1699.66
    Taxes ($11 acre x 30 acres), $330.00
    Insurance, $120.00
    Utilities, $13.70
    Total Annual Fixed costs, $2,163.36

    Total Fixed Costs (TFC):
    Fencing system, $5,480.59
    Watering system, $2,285.86
    Enclosure, $3,227.51
    Corral system, $3,200.00
    Trailer, $400.00
    Freezer, $557.45
    Bale wagons, $1,100.00
    Gravel, $455.00
    Pasture planting, $2,212.54
    Tractor and Machinery, $6,576.00
    Total Fixed costs, $25,494.95

    Total foregone opportunity costs of $15,750 (pasture @ $35/acre x 30 acres x 15 years) are not included. SARE grant monies received offset those costs.

    Gross Revenue and Weight “Anatomy” of a Typical Steer Sold by Cattleana Ranch in 1998:
    - 1239 pound steer (ave. $1.39/lb)
    - 742 pounds hanging weight (ave. $2.32/lb)
    - 512.5 pounds salable meat (ave. $3.36/lb)
    - 69% salable to hanging weight percent

    Average Gross Revenue Break Out by Meat Package:
    Executive box, 105 lbs x $5.99/lb = $628.95
    Chuck roast box, 59.5 lbs x $2.99/lb = $177.91
    Bulk hamburger box, 138 lbs x $2.49/lb = $343.62
    Hamburger Pattie box, 48 lbs x $3.49/lb = $167.52
    Sausage, 37 lbs x $3.95/lb = $146.25
    Variety box, 125 lbs x $3.95/lb = $436.25
    Total Gross Revenue/Steer, $1,722.49

    Marketing:
    Various factors were taken into consideration, to determine the marketing strategies for Cattleana’s Galloway Beef. First, we will review the process that was used to establish the marketing methodology.

    Identification of the Target Market and Market Needs

    The success of direct marketing in a “commodity” area, such as beef, is to establish a niche for your products. A niche, is a specific group of consumers who have needs that are not readily serviced by the commodity market. A niche does not mean that the market is small without potential. What it does mean, is that it is a unique market that is not currently served by the mass marketers. A niche market has adequate demand for growth and new businesses to enter the marketplace. Overall, you will find that niche markets will command higher prices, but also demand a greater level of service from the seller.

    Cattleana’s market is mostly a health conscious consumer. He/she enjoys beef and wants to know what is “put into” the product, how it is grown and processed. The consumer follows the news regarding mass processed beef and potential problems. He/she demands familiar cuts and in quantities that are easily stored in a small home freezer.

    Note that the Grant Recipients did not state that the customers were looking for low fat beef. Although that was the initial thinking, post buyer research indicated that this was not the common element of our customer base. Health was the common element – but healthy products have different meanings to customers. So, defining this market as “low fat” would limit the market niche and size potential.

    The product:
    Product is defined using two elements: 1) the actual product – in this case the beef, and 2) the packaging of the product.

    In the case of Cattleana Ranch, the use of Galloway animals, the management system, meat and packaging, plus finishing of the animals on grass without the use of added hormones and steroids were all part of the decision. Cattleana Ranch is located near an urban area. The market niche for Natural Galloway Beef are households that typically purchase beef in a retail environment – not directly from the farm in halves and quarters. These two groups have different needs and expectations regarding the beef and services that they purchase and consume.

    Branded Beef: Cattleana Ranch’s Major Theme

    Clover-finished natural beef is lower in fat, with no added hormones, steroids, or antibiotics. The cattle are raised in a natural environment – not stressed by feed lots or force fed corn. They enjoy the serene, peaceful life on lush green pastures of clover and grass. In the winter months, they continue to enjoy the life of the pasture and are fed the same grasses retained from the summer, in the form of hay.

    Why is this kind of description important? The clients of Cattleana Ranch were surveyed throughout the research period. The reasons that they purchased beef directly from Cattleana Ranch were: (in order of importance)
    1) No added hormones or steroids
    2) Knowing were your beef comes from
    3) Lower in fat
    4) Quality and flavor (tied)
    5) Support local farmer
    6) Price

    To maintain and assure the integrity of the product that the market is looking for, the decision was to “brand” the beef that we sell. “Branding” basically is a marketing tool that communicates to the consumer that the product that they are purchasing is unique, and will have basically the same quality every time it is purchased. It creates loyalty from the buyer and repeat business. In economic terms, successful “branding” causes a steep demand curve, allowing for higher prices than “generic” beef.

    Cattleana Galloway Beef is the brand that is used on the meat that is produced and sold by the ranch. In order to accomplish the desired end product, it is essential to control the production phase. Galloway animals were selected for their unique characteristics related to cost control and production, as well as marketing. The production and cost variables were discussed in the first section of this report.

    The Galloway also has unique characteristics that fit the natural beef market, including:
    - The Galloway “fattens from the inside out”, depositing fat, in it’s rib eyes long before the animal reaches undesirable levels of cover fat
    - Galloway cattle have low levels of internal fat – which surrounds the kidneys, heart, and the pelvis.

    Secondly Cattleana Galloway Beef can easily finish on managed grass in less than two years. The Galloway cattle and the MIRG system are the foundation of this operation. Grass finished beef provides the health conscious market niche additional benefits. Finishing the cattle on grass rather than grain provides for lower fat beef and calories.

    According to the American Medical Association (June 28th issue of the Archives of Internal Medicine) cholesterol lowering diets that include healthy red meat were as effective in a cholesterol lowering diet than a lean white meat regimen.

    Epidemiological studies have shown a strong positive relationship between total serum cholesterol and LDL-C (bad cholesterol) and the risk of coronary heart disease. Noteworthy, is the fact that omega-3 fatty acids are two to six times higher in grass fed meat. (Koizumi, 1991, “Studies on the Fatty Acid Composition of Intramuscular Lipids of Cattle, Pigs, and Birds”) The other major health benefit from grass fed animals is “conjugated linoleic acid” or CLA. Ruminants are the richest known source of CLA. According to Jo Robinson in Why Grassfed is Best!, “…a preliminary analysis of grass fed beef from River Run Farm in Clatskanie, Oregon, reveled that the meat had 4 to 5 times more CLA than conventional meat.” In addition, there is research that indicates higher levels of natural beta-carotene, vitamin E, and less risk of e-coli due to grass finished beef systems.

    The Processing:
    In addition to quality control on the farm, it is essential to have the services of a processor/butcher who provides a consistent high quality product. Lean meat needs special attention. A secondary research analysis was conducted on aging methods for lean beef. This information was discussed with Dr. Dennis Buege from the University of Wisconsin Meat Animal Science Department, and a protocol was established and communicated to the processors involved with the research. The basic elements were practiced each time animals were processed, including:
    - The animals are transported and handled by their owner Thomas Wrchota, and are not stressed any more than necessary during loading and unloading. Cattle stress impacts the tenderness of the beef.
    - Cattleana Ranch is usually one of the last to deliver the animals to the processor each time. This allows for warmer coolers. In addition, Cattleana Ranch’s carcasses were kept away from the fans by placing them between other carcasses. Due to the leanness of the beef, this reduces the cold shrinkage.
    - Hanging – Cattleana beef is dry aged (hung) for 10-14 days. This provides for more tender beef. We also want to note, that since the meat analysis research was conducted, numerous trade publications have indicated that “wet-aging”, mainly in craovac packaging, produces some “liver like” flavors. The meat sensory tests done with Cattleana’s beef which was wet aged in craovac resulted in responses of “liver like” flavor. Cattleana customers who have “dry aged” product have not indicated this problem with the beef.

    Packaging
    A major consideration of this target market is the packaging of the product. This market is accustomed to purchased beef in a retail situation. In many cases, the household has two working adults and little time is devoted to food preparation. Today’s market is not yesterday’s farm direct beef buyers. They are not accustomed to cooking the carious cuts that were found in the typical half and quarter purchases. Cattleana Galloway Beef is processed into popular cuts… it is important to continue researching your customers needs regarding the meat cuts and cooking trends. As an example, we found that making the round steaks into cube steaks were more desirable. Customers are also provided with copies of cooking instructions for lower fat beef and recipes.

    The quantity and the variety of cuts desired will vary with consumers. To accommodate the various individual needs, and provide a higher profit margin, the beef is offered in “boxes”. In 1997 the following “box selections” were offered.
    - Executive Box @ 45.99 per pound
    o T-bone, Porterhouse, Rib Eye, and Cube Steaks, plus 2 Rolled Rump Roasts
    - VIP Box @ $3.69 per pound
    o Sirloin and Cube Steaks, ¼ lb Hamburger Patties, 2 Sirloin Tip Roasts, Homemade Wieners, plus 1 top quality chuck roast.
    - Chuck Roasts Box @ $2.99 per pound approximately 5 top quality Chick Roasts
    - Hamburger Box @ $2.49 per pound
    o 1 lb packages of bulk hamburger

    Getting the Sale
    Selling the product is the most difficult for most farmers that want to direct market. The key to selling is to believe in your product, know the fact, and never stop talking about it! When we are asked “what do you do for a living”, the response is “we direct market natural beef”. This leads to many conversations, handing out business cards and eventually picking up customers. You never know who your next customer is going to be – a doctor, nurse, co worker, club member, neighbor, neighbor’s grown children, a farmer’s market product buyer, etc.

    Various promotion methods were tried including newspaper ads, etc. What was most successful for Cattleana Ranch were methods that would bring the seller face to face with potential customers. Customers are not only buying the natural beef, but the production methods (environmentally sustainable), the local farm, and the producers.

    Consistent marketing is a must. Not every buyer of the product becomes a customer – nor do you want them, if they don’t fit into the product market niche that is developed. Keeping in mind that this is a market niche, is always important. Therefore, it is necessary to continually find new customers, as well as, retaining the current customers. Most customers need two to three contacts prior to the initial purchase. Current customers need “reminder” information in the form of newsletter mailings and phone calls. These are some methods that have been successful for Cattleana Ranch.
    - Farmer’s Market – promotion of the beef at the farmer’s markets (not retail sales). Taste testing is helpful since many people “don’t believe” that beef can be flavorful and tender when not been given grain.
    - Newsletters, calls and surveys
    - Direct personal promotion – talking one on one and to groups
    - Referrals – from doctors, dietitians, health food stores and ethnic stores
    - On farm open house – Master Gardner meetings, harvest days, pasture walks, field days
    - Newspaper articles – free publicity not advertisements.

    Product Research:
    Grass finished beef can produce a high quality, desired product!

    A major part of the research project focused on the meat comparison and consumer acceptability of grass finished Galloway beef from Cattleana Ranch.

    The University of Wisconsin – Madison, Meat Science Department, conducted an analysis of Galloway pasture finished beef raised on the Cattleana Ranch, operated by Thomas and Susan Wrchota, Omro, Wisconsin. The purpose of this study was to evaluate the eating quality and nutrient content of the pasture finished Galloway beef in comparison to grain finished Galloway beef and conventional USDA Choice beef purchased from retail outlets. The following is a summary of the results.

    Nutrient Composition
    The nutrient composition of the pasture finished Galloway beef brings home the major benefits of pasture finished beef. Cooked loin from the pasture finished Galloway beef was analyzed for fat, protein and fatty acid content by Covance Laboratories of Madison, WI. All methods were approved by the American Association of Analytical Chemists.

    Pasture finished Galloway beef was significantly lower in fat than other red meat and was closer to chicken breast without skin. In addition, pasture finished beef also was lower in calories.

    Tenderness
    Tenderness can be determined using two methods. The first is a force of shear testing method with shear force measured in Kilograms, which gives a true evaluation of the tenderness of the meat. The second is a subjective method, taste panels, which consists of individual tasting of the meat in a controlled setting.

    The pasture finished beef showed to be equal to low choice beef purchased in retail stores. The high choice beef (restaurant use) was more tender, however there was no significant difference between any of the samples.

    Taste
    The taste panels were asked to rate the beef samples also on juiciness, beef flavor intensity, and different flavor intensity. Rating was on a seven point scale with 7 being the highest.

    Pasture finished Galloway beef showed no significant difference between low choice and high choice in tenderness, juiciness, or beef flavor intensity. The panels did indicate that the pasture finished beef did have a different or sharper flavor. The taste panel members differed on the degree of “different flavor”, depending on their age and exposure to different types of meat.

    Customer Acceptance
    Cattleana Galloway Beef buyers were sent a survey approximately three weeks after the purchase of beef. A self address stamped envelope was included to encourage replies. All surveys were anonymous; surveys were coded to determine the type of package that was purchased. A 90 percent response rate was achieved. The following are the key mean results.

    Please rate the following attributes of Cattleana Galloway Beef using a score of 1 to 5, with 1 being lease favorable and 5 being the most favorable.

    Tenderness, Juiciness, Flavor/Intensity, Flavor/Desire, Overall Acceptance
    Mean: 4, 3.7, 4, 4, 4.5

    How would you compare the overall Quality of the Galloway Grass Fed Beef to “store beef”? (1 being much lower and 5 being much higher)
    Mean: 4.7

    For the quality, rate the value of the beef at the price per pound. (1 being much lower, and 5 being much higher)
    Family, VIP
    Mean: 4.2, 3.7

    Reasons that you purchase beef direct from the producer? (1 being the most important and 5 being the least important, each respondent was given only five selections from a list of eight.)
    Lower Fat, No added hormones or steroids, support local farmer, quality of beef, know where come from, price, and flavor.
    Mean: 2.8, 2, 4.2, 3, 2.5, 4.7, 3

    Since 1997 – Cattleana Ranch Production & Marketing of Healthy Beef
    Most of the changes that have occurred since 1997 relate to; providing customers with products that they want, increasing gross revenue per customer, and enhancing on farm labor efficiency.

    Since the major component of the farm’s beef sales have come from farmer’s market participants, the product lines are being broadened. Customers now can buy their heirloom and unique fruit and vegetable varieties, along with free range chickens. At this stage, most of the chicken’s sales are limited to beef purchases during the summer and fall. Again, the benefits of drug free and green grass pasturing of poultry helps to reinforce the farm’s sales efforts to the health oriented beef customers.
    Since higher revenue per customer compliments a labor scarce farm (with no employees), it is necessary to have product diversification. It is Cattleana Ranch’s goal to have a minimum of twelve customers, who purchase between $500 to $1,500 in 2000. Over half of that goal was achieved in 1999.

    Financially, each product line (beef, poultry, fruits and vegetables) will have to “stand on its own”. Within three years beef sales (excluding breeding stock) needs to exceed $20,000, poultry sales should surpass $5,000 with fruit and vegetable sales moving up to $10,000. These are relatively modest goals, since the farm has gained approximately 25% to 50% in revenue per year for the last three years.

    When the above goals are achieved, along with keeping cost under control, a part time labor source (Susan Wrchota) will be recruited to enhance the production and marketing efforts of Cattleana Ranch, on a full time bases.

    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.