Do Your Homework When Aiming For A Niche Market

Published on Mon, 12/14/2020 - 10:14am

Do Your Homework When Aiming For A Niche Market.

 By Heather Smith Thomas.

 A growing number of cattle producers are selling their animals into niche markets like natural, organic, grass-fed, animal welfare approved, etc.  Stacy Davies (manager of Roaring Springs Ranch in Oregon) is involved in Country Natural Beef and says niche markets give ranchers an opportunity to tell the good story about beef and connect with consumers.

These markets put a face on the people producing the food, and consumers know where and how their beef is being raised.  In mainstream markets the producer has no contact with consumers and the consumer has no idea where the beef originated or how it was fed.  Niche markets personalize the food-producing process.

 “There are several reasons to do this.  One is the extra money to be made, but another is the opportunity to tell the story of ranching.  The requirements involved to sell beef through a niche market are not that challenging.  Most of us already do the main things required.  It’s not as hard to get started as people think,” says Davies.

Many ranchers already handle the cattle properly and take good care of the land.  It’s just one more step to become certified.  “Often the certification doesn’t require additional work, but might require additional record-keeping,” explains Davies.
He feels the beef industry needs to be proactive in letting consumers know that ranchers produce their animals with high standards for humane treatment and handling.  Our co-op (Country Natural Beef) designed standards that could be audited—that would assure that the good practices that most ranchers and processers adhere to on a daily basis are always followed and that this story can be communicated,” he says.

“With help from Temple Grandin and an international co-op committee we developed what we call Raise Well principles. At the same time, Whole Foods developed Global Animal Partnership (GAP) and asked all their meat suppliers to adhere to the GAP standards.  As a result, we now use those; our ranchers are audited to the GAP standards and we also continue to abide by the Raise Well principles.  This satisfies all our customers that our ranchers, processors and feeders are meeting a humane care standard they can feel good about,” he says.  

Third-party independent certifiers audit the farms every 15 months to help them meet GAP certification.  The animals are seen through the different seasons—spring, summer, fall and winter—to get a feel for how the animals are cared for year round.  

Niche markets have strengthened the industry.  “We feel we have converted a lot of vegetarians back to beef-eating.  The reasons they became vegetarians were minor issue they thought they didn’t like, and often misunderstandings.  If ranchers have the certification to alleviate their fear, whether animal welfare concerns, environmental concerns, or production-practice concerns, by being able to show certification, these vegetarians became beef-eaters again.  We have expanded beef sales nationwide and worldwide by having niche market products.”

He believes that small retail chains and small mom-and-pop restaurants, in order to be able to compete with the big box stores, need products that are enough different to bring people in.  “The niche beef products are widely used as something to attract people to the smaller store or restaurant,” says Davies.
Consumers go out of their way to patronize these stores and restaurants because they know the beef is good, and it was raised the way they want to see it raised.  “The health and longevity of our beef industry depends on all our markets, and it is important to have independent smaller retail chains and independent restaurant chains, with many outlets.  If we have to depend on Walmart to buy all our beef, we are in trouble,” he says.

Marketing Challenges
Some producers do the whole process themselves—raising and finishing the animals and selling the meat directly to their customers.  Dr. Rick Machen, Texas A&M Agrilife Extension Service Animal & Natural Resource Management Specialist, has worked with several small to mid-size grass fed producers and hosts the annual TAMU Grassfed Beef Conference.  “The most sustainable system for grass-fed beef in our part of the world is harvesting fleshy 700-750 pound calves at weaning,” he says.  This product is often called baby beef.  These animals are growing fast, fat from mother’s milk and good forage, and the meat is tender.

“The challenge in our region is having enough quality forage at the right time(s) to grow and finish cattle on forage.  Some years we have good moisture and great forage for 12 or 14 contiguous months and we could harvest them at an older age/heavier weight.  Most years, long hot summers take a tool on the quality of our warm season perennial forages,” says Machen.

“The key to grass-fed beef production is sustainable quantity and quality of forage to grow and finish cattle in a timely manner.  Periods of forage dormancy and limited availability often result in cattle being 24 to 28 months old before they finally get to a finished harvest weight and level of fatness, and time is money,” he says.

“Some grass-fed operations have portions of three calf crops on the farm at the same time.  As age at harvest increases, so does the total forage required and cost of production.  If pasture availability is fixed, moving from traditional cow/calf (calves sold or transferred at weaning) to grass-finishing beef requires a significant reduction in cow inventory to allow forage for the growing/finishing operation.  The economic tradeoff between fewer cows and marketing grass fed beef must be considered.”

“Some of the small producers I work with are not solely focused on profitability.  Natural resource stewardship, low stress animal management, sustainability and the ability to move beef from their farm/ranch direct to the consumer also appeals to them.”

Most commercial cattlemen sell calves at weaning.  This is the lowest risk, least involved marketing approach. “Contrast that with selling beef direct to a consumer, and all the tasks performed by people in the middle—stocker operators, feed yards, packing plants, wholesalers, retailers, etc.  People who decide to direct market their own beef often underestimate the time required, and the additional pieces of that puzzle,” he says.

Finding a harvest facility/processor who will harvest cattle and process/package on the producers’ schedule and according to their specs can be a significant challenge.  Inventory management becomes another management challenge.  Unless direct-marketers can sell whole carcasses, halves or quarters direct from processor to consumer, frozen storage in which to warehouse product will be needed.

Getting Started
If someone wants to direct-market their own beef, they need to first make sure they have a quality product to sell.  Eat some yourself, give some to your neighbors and see if they come back and ask for more.  You need to find out if you actually have a product that somebody wants.

It’s also important to understand what it takes to put a good grass-fed product on the market consistently.  It is not just pulling big yearlings off pasture and harvesting them, and calling them grass-fed.  You need to do your homework and make sure you can produce a good product.

One entry option for produces interested in niche marketing is cooperating with an already-existing branded product, such as an established grass-fed or natural market.  “If they already own cows, I encourage them to investigate opportunities to participate in a program as a cooperating grower/producer,” says Machen.  “They can see how that goes, and how long it takes to produce those animals to those specs, and how their forage shapes up for this program.  I recommend doing that with a portion of the calf crop, selling the majority of the calf crop through their traditional market.  This might keep the cow-calf enterprise going while they test the waters of niche marketing,” he says.

“This can be the best way to get your feet wet, learn from mistakes on a small scale, gradually working into a successful forage-finishing program.  We have several ‘cooperator’ ventures here in Texas, one of which harvests 700-800 pound calves at weaning, and this program is run by a producer who has about 50 cows.  They market all their calves through the program as well as a hundred more annually from cooperating growers.  Cooperating growers are paid a premium over what those calves are worth as feeder cattle at weaning,” says Machen.

“One of the greatest challenges is finding a packer who will harvest and package cattle to exact specifications.  Most of the small local packing plants are very busy and their harvest schedules are crowded.”  

“Another consideration is freight.  If the producer can find someone in the grass-fed business within a reasonable travel distance, it can work.  But to haul calves much further than a routine marketplace can jeopardize profitability. You have to consider the cost of getting them there,” he says.  You also must consider the potential stress on the animals if they must be hauled a long distance for harvest.

“Most of the companies that sell niche products have people in place to help producers get past the roadblocks,” says Davies.  “Whatever their fear might be, regarding whether or not they could do this, there is someone who could help them figure it out.”  They can ask questions and find out how to deal with the challenges.

“Here at Country Natural Beef our people are willing to talk to people if they have any questions about natural or animal welfare or environmental criteria, even if they are not selling to us,” says Davies.  “If a producer is not a fit for Country Natural Beef and want to be grass-fed or lives in a different part of the country, we’ll connect that producer with a company in their area that’s a fit for them.  The niche companies have a big network; we help each other.  The end goal is for consumers to have an enjoyable eating experience and want to come back for more,” he says.

The Challenge Of Forage Finishing
The grass-fed producer has to decide whether to finish cattle year round, or just seasonally when the grass is best.  In many parts of the U.S. the grass is not good enough to finish beef except when it is green and growing.  To get an animal finished on grass, the forage must have energy levels similar to a feedlot diet.  You need high-energy pastures.  At the finishing stage, the animals must be able to eat all they want of a high quality pasture, and the limiting factor will be energy.

A fast-growing short, green pasture is very high in protein but very low in energy.  You need something like ryegrass mixed with clover, in a pasture 6 to 8 inches tall.  At this height the animal can reach with the tongue and take a full mouthful with every bite.  It has to be easy; they can’t be working hard to get full.

Cattle must be gaining at least 2 pounds a day during that last 120 days.  Look at your climate and determine which 120 days of the year can provide pasture of this quality.  Irrigation can extend this period of time.  If you want them to gain 2.5 pounds a day for 120 days, do the math to determine the start of that period with an animal large enough to finish in that length of time.