Top considerations for direct marketing beef
Anticipated food shortages across the country as well as consumers’ increasing desire to know where their food comes from has sparked marketing beef directly off the ranch to consumers to rise in popularity.
As more producers look to direct marketing of their beef, experts at Kansas State University discuss considerations for ranchers to keep in mind during a Cattle Chat podcast presented by the Beef Cattle Institute.
Kansas State Veterinarians Bob Larson and Brad White, Agricultural Economist Dustin Pendell and Kansas State Beef Cattle Extension Specialist Bob Weaber share their ideas on how to successfully market from the ranch.
Develop a plan
The experts all agree developing a business plan is critical to the sustainability of direct marketing. Understanding price structure and determining if producers want to sell their beef in individual cuts or by the carcass are important decisions to be made with caution.
“If I sell a half of beef to someone, they will pay the processing charges, and they get all the yield,” shares Weaber. “But, if I am selling meat by the cut, the pricing model is substantially more complex. Finding a home for the less desirable cuts of meat can be a real challenge and, frankly, can make or break the deal.”
Pendell urges beef producers considering direct marketing to think about what could lend their operation to a niche market. Marketing platforms that have the potential to increase premiums or access to specific markets include grass-fed and antibiotic-free beef.
Producers also need to consider processing schedules and plan in advance with the processor.
“Processors are scheduling months out because of increased demand,” Pendell says. “Many processors also are aware of inspection regulations and laws on selling products.”
Open communication
“If producers are thinking about selling beef to consumers, they need to make sure to communicate with customers ahead of time and have a value structure in place as part of the business plan,” White says.
Pendell adds, “Sometimes consumers assume a direct purchase is cheaper, but it usually isn’t.”
“Making sure the producer and the consumer agree on the benefits of the interaction is key,” says Pendell. “The type and the timing of the product are important to communicate for both parties.”
“One of the first challenges is to find customers who are also going to be repeat buyers,” shares Larson. “Establishing a good relationship with frequent communication is important in retaining and gaining business.”
Producers can also provide education to their customers about how the beef was raised and share the reasons why.
Conclusions
A summary of considerations provided to producers for direct marketing beef to consumers include planning for carcass utilization and pricing strategy, developing a relationship with the processor, identifying relevant regulations in the area, meeting customer demand in terms of timing and product type, preparing to communicate frequently with customers and most importantly, developing a business plan.
Pendell urges, “Producers need to educate themselves before entering one of these direct marketing ventures.”
He shares many Extension websites have good information on direct marketing.
Averi Reynolds is the editor for the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
