Grass-fed and Organic Beef: Production Cost and Profit Potential

Grass-fed and Organic Beef: Production Cost and Profit Potential

Summary

Eighteen cooperating beef farmers and ranchers producing organic, grassfed and organic grassfed beef documented their own farm data for costs of production and beef production parameters for the 2008 and 2009 production years. Data for 2009 was collected from farm records and 2009 Schedule F tax forms in 2010. Data included market animal weights at key times, animal inventories, feed use, grazing days and frequency of animal moves during the grazing season. Costs of all inputs were recorded, on-farm inputs noted, and labor use tracked. Usable data sets were available for fourteen of the cooperating farms. Data was summarized and is available as an Excel attachment to this report. Drafts of four additional farm/ranch case studies were prepared. These are also available as attachments to this report. Outreach included workshops at the 2010 Wisconsin Grazing Conference, the 2010 Grassfed Exchange in Nebraska and two ranch tours.

Objectives/Performance Targets

Data collection was completed in 2010 for the 2009 beef production year, January 1 through December 31.

We worked one-on-one with 23 beef producers in five states; Iowa, Nebraska, Wisconsin, South Dakota, and Kansas in 2008 and 2009, to organize and document the costs for production from breeding through sale of market animals in three specialty beef production streams: grass-fed or finished, organic grass-fed, and organic grain-fed. The number of farm records collected has been fewer than originally planned, due to producers leaving the project. Twenty records were completed for the 2008 crop year and 14 for the 2009 production and calendar year, for a total of 34 records. Useable records for the 2009 production year included seven from grassfed farms/ranches, three from organic grassfed farms/ranches, and four from organic grain fed farms/ranches.

Many producers in these production streams are calve-to-finish, but others we have identified specialize in cow/calf or the finishing period. In addition, we documented their production systems and the specific practices, genetics, and/or management techniques that enable them to sell into their market niche.

Case Study Development
We prepared six case study summaries of participating farms to provide potential producers a cross section of management systems that do and can work. The Case Study for Ryan and Gene Herman in northeastern Iowa one is completed, with five additional in revision. Drafts have been prepared for the Wayne Rasmussen and Gordon Dvorak ranches in Nebraska and the Jim Munsch, Mike Hanson and John Ovadahl farms in Wisconsin. Case studies include: the size of operations, type of enterprise, yearly schedule of production, grazing system used, additional feeds supplied, animal health program, and beef production statistics. We have also identified key factors for each operation that have led to, or are limiting, success in their production and marketing niche.

Accomplishments/Milestones

Data Collection and Analysis

Cooperating beef producers completed data collection for the 2009 production year. Input costs were derived from their 2009 tax Schedule F forms that were prepared in 2010. Other production, and input records were derived from individual record keeping systems. Eighteen farms collected data and fourteen of those had useable records. Farms/data was sorted by production/marketing stream and summarized for the three production streams studied: organic beef; grassfed beef; and organic, grassfed beef. These production streams were further subdivided into the two production phases in beef production: calf production and the growing and finishing phase.

Linked files contain the summary of data for 2009 for 14 farms in the Upper Midwest. Cost of production were documented for the cow-calf phase and growing and finishing phase for organic, grassfed and organic grassfed herds. Costs were also combined for the entire beef operation for farms that were calf-to-finish.

Five additional farm/ranch case studies were prepared. Drafts of four of those are attached to this report.

Outreach

Outreach included workshops at the 2010 Wisconsin Grazing Conference, the 2010 Grassfed Exchange in Nebraska and two ranch tours. The workshop at the Wisconsin Grazing conference was entitled ‘Real Results & Practical Tools for Beef Profitability’. In the workshop, Laura Paine and Jim Munsch summarized the study results, presented the financial performance of grass-fed and organic farms in Wisconsin, Iowa, and Nebraska and discussed tools for tracking expenses and interpreting individual farm numbers for 40 participants. Denise Schwab, Iowa State University Field Extension Beef Specialist, presented project results at the Grassfed Exchange Workshop in Creighton, Nebraska to 50 participants. Also as part of the Grassfed Exchange, two ranch tours were held on Gordon Dvorak’s and Wayne Rasmussen’s ranches with a total of 170 participants. Total outreach was to 260 farmers, ranchers, press personnel and agricultural professionals in 2010.

• 2009 Summary Costs of Production—-Organic and Grassfed Beef
• Gordon Dvorak Ranch Case Study Draft
• John Ovadahl Farm Case Study DRAFT
• Jim Munsch Farm Case Study Draft
• Mike Hansen Farm Case Study DRAFT

Impacts and Contributions/Outcomes

Two thousand nine was the final year of the study for data collection and full data sets are now compiled. Data is being further sorted and summarized by farms/ranches that had complete record in both years of the study.

Impacts as a result of our work this year are indirect. Field Day and workshop participants have a better understanding of grassfed beef production and the associated costs. Land costs loom large in these production systems and are often the factor contributing to or limiting profitability. This has profound impact for start-up operations interested in producing grassfed beef, depending on their access to land and at what cost.

Collaborators: