Saturday, October 20, 2001
Steamboat Springs An innovative program meant to bring greater profits to local beef producers will take an extended time out this winter. But proponents say they don't believe Yampa Valley Beef is headed for the last roundup.
Since it began operation three years ago, Yampa Valley Beef has sold locally raised meat directly to restaurants and grocery stores, eliminating middlemen in the beef processing industry like feedlots and giant packing plants. The locally produced beef is slaughtered at Mountain Meats in Craig and most of it is consumed in the form of hamburgers by skiers vacationing at the Steamboat ski Area.
But Colorado State University Extension Agent C.J. Mucklow says the program was in danger of injuring its own reputation if it didn't suspend operation for a time and work out some of its growing pains.
"I'm afraid we're going to burn people out if we don't take time out now," Mucklow said. "We have a great idea, but the issues are starting to pile up."
Mucklow explained that in order to truly meet its stated mission of making local beef producers more profitable, Yampa Valley Beef needs to reach a new level that will allow it to sell more beef on a regional basis.
And in order to accomplish that, it must find new and larger storage facilities.
The company also needs to form a business relationship with a distributor that can help it reach a broader base of consumers, Mucklow said.
Yampa Valley Beef President Bill Gay said it's time for the enterprise to formulate a new strategy.
"I believe the business concept of Yampa Valley Beef is viable, has been profitable to members and has been positive for the community," Gay said. "We need to continue the work that has been done on the strategic plan to successfully grow the operation into the future."
After selling almost 30,000 pounds of hamburger in 2000, Yampa Valley Beef has produced 33,000 pounds of meat thus far in 2001. Although that's a lot of burger, it really
hasn't had that big an economic impact on individual ranchers.
It takes just 74 animals averaging 456 pounds of muscle mass per carcass, to generate YVB's annual production. With an even dozen really active ranchers participating, that works out to just over 6 animals per participant, not enough to have a significant impact on their bottom line.
Mary Kay Monger said the premium local beef producers make in animals sold through YVB is greater when the cattle market nationwide is down because the disparity between local prices and the prices at auction are greater. Monger is vice president of Yampa Valley Beef.
Last year, in a down market, the cash difference to local producers was about $50 to $75 per head, Monger said. When the cost of shipping is added, a sale commission and the cost of feeding the animals while they are in a feed lot awaiting sale, the cash difference grew to between $100 to $150.
However, this past summer, with a more robust cattle market, the difference was negligible.
But the primary reason YVB is pausing between the conclusion of its test program and what comes next, is the lack of a plan on how to ramp the local program up to the next level.
Essentially, the local producers need to find a way to generate more cash flow so they can afford to pay for increased storage, an employee to market the product to regional distributors.
"I'd hate to see it go away," Mucklow said. "I've worked too hard on it to see that happen."