Development of a Rancher Cooperative to Market Grass-Fed Meat

Development of a Rancher Cooperative to Market Grass-Fed Meat

Summary

The ranchers involved in this project knew that to produce grass-fed beef, we would have to create a marketing system through which to sell it. Nevertheless, none of us had any idea how difficult all this would be. Objectives were: 1) Found a marketing cooperative or rancher-controlled business; 2) Develop quality control standards for production of grass-fed beef; 3) Conduct market research on grass-fed beef; 4) Explore processing options with small-scale meat processors; and 5) Develop a business plan to implement production and marketing program

We reviewed alternative legal structures and finally formed a cooperative, adopted articles and bylaws, and developed a group process for decision-making and resolving conflicts. The co-op model has the advantages of pooling capital, labor and enthusiasm and equalizing the power of all members. In our business plan, we ran into challenges in developing skills, procedures and infrastructure to manage what is now a manufacturing and marketing firm. We conducted a literature review on grass-fed beef production and did production research. Based on the literature review and instincts from experiences in grazing cattle, we began to produce and market grass-fed beef. We have processed and marketed over 150 head and continue to fine-tune our production model. We had to process in a federally approved plant to sell out-of-state, so we found a plant that handled small volumes and did private label work for specialty meat companies. Processing costs are high compared to large-volume producers.

We tested the beef in a formal, blind taste panel, in our rancher testing committee, in numerous promotions and generally in the marketplace, and found that grass-fed beef has distinct flavor appeal and is enthusiastically accepted by our market niche. We had to educate consumers on how to cook it and its tremendous nutritional advantages. We held a Ranch Day inviting customers to see the land, learn about ranching and form a connection to people who raise their food. Related projects have been nutritional testing and obtaining USDA approval of a special claims label. This has been complex, time-consuming and expensive but essential to adding value to our product. Results have shown grass-fed beef has significant nutritional advantages.

We are still midstream in our development, but we conclude: 1) it is possible to produce quality grass-fed beef enthusiastically accepted by a niche market; 2) grass-fed meat has exciting potential as a nutritionally excellent food source; 3) if producers want to direct market products, cooperatives are advantageous; 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, 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. North Central Region SARE 1997 Annual Report.

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