For those who are familiar with the beef industry, grass-fed and finished beef seems like a no-brainer. Healthier cows, healthier grasslands, healthier people, higher prices… so what’s stopping every rancher from transitioning to grass-finished beef?
This is the daunting question I have elected to take on this summer. I think I have the answer then WHABAM, something else pops up. Everyone I talk to says something different. The system is incredibly intricate and intertwined into years and years of the beef industry adapting to changing markets. I’m going to attempt to frame decades of challenges in five simple bullet points. Here goes nothing… 5 major challenges of switching to grass-fed beef:
1) Access to markets – Large scale feedlots have dominated the commodity beef market, and their size and efficiency make their prices unbeatable, so the major markets that are sourcing from meat giants like Tyson and JBS have no incentive to purchase at a higher price. The mid-sized rancher has the hardest time – farmer’s markets won’t sell enough quantity, but restaurants demand specific cuts that they don’t yet have the infrastructure to make worthwhile. There is a need for the mid-sized farmer to be able to sell on a scale that makes switching to different operation efficient and not costlier.
2) Infrastructure – Without the people and land in place, switch is daunting, especially for cow calf operators. Switching to grass finishing means going from raising calves for 8 months, to being able to raise animals for up to two years. The proper fencing and land allocation is required for the shift.
3) Land Availability and Prices – Land prices are off the charts these days. It is already daunting to buy a new piece of land for a rancher, however adding on the extra bonus that switching operations could jeopardize profit even more, especially upfront, is a huge turn-off.
4) Access to slaughter – Ranchers may have to truck their full sized cows up to 500 miles just to find a USDA slaughterhouse. Transportation is expensive!
5) Risk Aversion – Switching to grass-finishing is knowledge intensive. It is daunting and the upfront cost is high.
The cool thing about most of these challenges is that they can be solved. I am currently working on putting together financial models for a cow-calf operation and a grass-finishing operation. The goal is to get both operations laid out on paper so as to identify the right market opportunity and de-risk the operation. The wheels keep turning and the spreadsheets keep churning.