A research project aims to assay the input costs and overall profits of three grass-finishing systems
Even though there's a demand for grass-finished and organic grass-finished beef, is it cost effective for beef producers to provide that kind of product?
That's the question a Midwest beef study hopes to answer. Terry Gompert, University of Nebraska-Lincoln Extension educator, says a Sustainable Agriculture Research and Education (SARE) grant is providing funds for a 2008-2009 study involving beef producers in Iowa, Wisconsin, Nebraska, Kansas and South Dakota. Margaret Smith, Iowa State University (ISU) Extension program specialist, and Laura Paine, Wisconsin Department of Agriculture Division of Agricultural Development, are also serving as study coordinators.
“We're gathering data from producers involved in three types of beef production,” Gompert says. “We want to analyze a comparative study that looks at both input costs and overall profits for organic grain-fed, organic grass-fed and grass-fed beef. The data will tell us if there's enough profit, or any profit, for low-input producers who use a forage system to fatten their cattle.”
Gompert is assisting 12 producers in completing detailed documentation that will provide the study's analysis data. Smith and Paine are working with similar groups.
The study's first challenge was to develop the structure of the form used to gather study information. “What we found in developing the form was that nearly all existing forms were used to gather information on feedlot production,” Gompert says.
In creating the study questions, Gompert says administrators realized the complexity of documenting costs and profits from a grass-finished beef operation.
“How do you allocate part of the ranch assets to ensure the accuracy of your figures?” Gompert asks. “If you're raising annual crops to finish your beef, how do you accurately allocate those costs in your operation? We eventually came up with those answers because we want to make sure the study documentation reflects real numbers.”
Gompert holds degrees in beef production with a focus on grazing management. He also owns a grass-fed beef operation.
One portion of the project includes publication of case studies documenting several participating producers. The information should further assist beef producers involved in or considering a grass-fed operation.
“It's no secret every beef producer has variations in their operation,” Gompert says. “In South Dakota, we're gathering data from Pukwana grass-finished ranchers Julie Williams (DVM) and her husband Larry Wagner. We're also obtaining information from Tim Eisenbeis at Marion, who produces organic beef.”
“Neither Larry nor I like the numbers side of our operation,” Williams says. “This will force us to take time to document our cost information. We feel like we have a lot more money when we're using solar collector leaves to produce most of our feed. What we really need to know is what it costs us per pound to raise a calf. That information will help us determine the value of our animals when we sell them.”
Gompert says the data from participating producers will be very valuable, even though the operations are very different. “A comparative study of the two processes with specific input costs and sales prices is what producers need in order to decide the kind of operation they're going to use,” Gompert says.
Although there are completed studies regarding the cost of producing beef, the researchers couldn't locate a study with the same focus as the one they developed.
“We want producers who are considering grass-fed and/or organic beef to be able to review this study's results and identify the questions they need to ask before making any changes,” Gompert says. “This study should help them decide if some aspects of grass-fed or organic beef are too expensive for them, especially if they have to make use of stored forage.”
Gompert reports he found it difficult to locate organic grain-fed cattle because the cost of organic grain currently is about 50% higher than the cost of traditional grains.
“Organic grain-fed beef is absolutely not profitable right now,” Gompert says. “Corn is just too high; consequently it's pretty clear to producers that they're not going to make a profit with that type of product in the short run.”
Organic grass-fed beef producers face entirely different issues than organic grain-fed, beef producers. They need to carefully analyze input costs and operational requirements and changes to make the right decisions for their operation.
The issue of forage supply
“The biggest challenge grass-fed producers face is having a high-quality chain of forage available 12 consecutive months,” Gompert says. “We can put together high-quality silage and hay, windrow grazing and plant annual crops and graze them late into the fall. We can use native plants and improved pastures and manage all of them appropriately so we have the highest quality feed.”
“High tech” isn't a term producers think of when considering grazing management, but Gompert says learning to effectively produce and use forage requires a significant amount of planning and strategic development.
“Some of this doesn't come naturally and we're really in the learning stages of knowing how to make the most of our forages,” Gompert says. “We need to consider a large variety of forage types and forage-management plans in order to fully explore our options.”
While he doesn't have the data he needs to begin developing an analysis, Gompert believes grass-finished beef will prove to be more cost-efficient than other types of production. He says consumer demand is pushing producers toward grass-finished and organic beef products. However, if costs are prohibitive, consumers won't actually purchase those types of beef.
“Consumers have to realize the cost of producing this kind of meat might be more expensive than traditional methods,” Gompert says. “If they're willing to pay the added cost, producers will do well. But if the costs prove too high, that market will go away.
“Feedlots have been popular because producers could efficiently produce lower-cost meat with a high-quality feed,” Gompert says. “It's been a good model, but some other models are being expressed right now and we need to seriously consider them.”
Loretta Sorensen is a freelance writer based in Yankton, SD.
Grass-fed beef is fed solely on forage. The most difficult element is developing a 12-month forage supply of the quality cattle need to gain.
Organic grass-fed beef is fed on forage certified as organic, which means the land has had no type of chemical applied to it for a specific number of years and no chemicals are used to manage the grasses.
Organic grain-fed beef is fed on grains certified as organic, which means the cropland was chemical free for a specific number of years and no chemicals were used to produce the grain.