Community Agriculture Alliance: The business of beef
November 3, 2011
Steamboat Springs — I keep hearing about the "beef industry," but exactly what does that mean and how does it fit into the typical model of "industry"? It seems in today's world, the term "industry" has a negative connotation and brings to mind those horrible stories and pictures from textbooks about the Industrial Revolution. Very few people choose to acknowledge that modern industry has evolved environmentally and socially and that many industries act responsibly.
Looking at industry in a simplistic manner, each company has the final determination of quantity, quality, distribution, timing and price for its products. The process is fairly linear. The company has some control of the product from the raw material to the finished product.
The beef industry is more of a jigsaw puzzle than an industry, and it takes all of the pieces to put beef on your plate. The beef business, and all agriculture, is subject to many unforeseeable factors at home and abroad — weather, politics, natural disasters, changing interpretation of governmental regulations, actions of others in the business and the fact that it is dealing with living things. Agriculture is the only industry in which the producers ask what the buyer is willing to pay rather than setting the price, until the product has gone through the final processing. This means that planning must be flexible, not linear.
The first piece of the beef puzzle is the 743,000 independent contractors — cattle farmers and ranchers. Ninety-seven percent of these farms and ranches are family owned and operated. These farms are of those whose product is calves, which they sell to others who feed them on the excess grass or vegetation on their ranches (stockers) — either free range or in their own feedlots. Some farms and ranches choose to keep their own calves and grow them through the entire process, even selling the meat under their own brand.
The second piece of the beef puzzle is the feedlots. Feedlots come in a wide variety of sizes and ownerships. Many feedlots also are family-owned businesses. Some ranches have their own feedlots. Large and small feedlots buy cattle directly from ranchers or at livestock auctions. They grow the calves to the size ready to go to the processors. Some feedlots also do custom feeding. This means the rancher pays the feedlot to raise the animals to the desired size and using the desired feed. This is especially true for organic or natural labeling. Organic or natural labeling refers to what medications or supplements are allowed and the type of feed the animals eat; it doesn't refer to whether they've ever been in a feedlot.
The third piece of the beef puzzle is processing. Processing comes in a wide variety of options. Many cattle are processed in large processing plants under tight controls and inspections. Some cattle are processed at local processing plants, some with USDA inspectors and some without. Each is under different regulations of the federal government. Some sellers of branded meats have their own processing plants or contract with established processing plants to handle their meat. Small, independent processors allow for people who prefer to buy local to purchase directly from the rancher and have the animal processed the way they want. Some small local processing plants sell beef by the whole, side, quarter or package. Most chain grocery stores buy meat that comes pre-cut into large muscle groups, and the meat department cuts them into individual steaks or roasts and grinds the hamburger at the store.
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The consumer can find beef at a price he or she is willing to pay: organic, artisan, grass-fed and natural beef sell for higher prices than traditional beef. This beef business jigsaw puzzle ensures that everyone can benefit from having fresh beef available all across the country, year-round.
Jo Stanko and her husband, Jim, are longtime Routt County ranchers. The Stanko Ranch, located on Twentymile Road, has been in operation more than 100 years.