Selling beef directly to consumers brought added profitability to these three operators.
“Diversify” and “adapt” are what experts advise producers to do in this climate of high inputs and a topsy-turvy cattle cycle. But how does one go about adapting to change and achieving diversification? For three Great Plains beef producers, their answer came in selling beef direct to consumers — ultimately creating above-average returns for their cattle operations.
Ty Malek, Highwood, MT; Kevin Fulton, Litchfield, NE; and Karl Dallefeld, Worthington, IA; each sell direct to the consumer. While each of their products falls within unique niches, they share a common goal — to adapt to the changing trend in consumer preferences for high-quality, locally grown, safe beef, while also adding value and sustainability to their cattle operations.
Here, they share their thoughts for others considering a direct beef start-up.
Is selling direct for you?
As with any business venture, all three producers had to decide if selling beef direct was feasible. Did they have the assets in land and cattle, and the resources of feed, marketing and time?
Time, according to Malek, who operates Big Sky Montana Beef, is the number-one item producers should consider in contemplating direct beef sales. After all, he spends an exorbitant amount of time on the road promoting his beef jerky products and whole cuts.
“As we developed our beef jerky product, I saw more windshield time,” Malek says. “I traveled to various home and sport show-type events selling. That's why this isn't for everyone. Traveling to these shows and talking with people is how we market our product. It costs money to travel and requires that you be gone a lot. Not every rancher wants to do that.”
Selling beef direct can be done with less travel, but all three men agree you must make your product available. Fulton invites people interested in purchasing beef to visit his Nebraska farm and learn about the cattle; Dallefeld actively sought out grocery store and food-service entities in need of locally grown beef and continues to look for other sales paths.
Identify market opportunities
A second consideration is to determine what type of direct beef sales you prefer.
For example, Fulton became disillusioned in the mid 1990s with traditional crop farming. So he switched to cow-calf production and custom grass-finishing with an eye toward the organic beef market.
About 75% of the acreage on his 2,800-acre farm is now certified as organic, with the rest in a transition phase. He hopes the full conversion will push his operation into the higher-return brackets that niche beef markets often carry with them.
Fulton says his cattle are self-sufficient and get all they need from the grass and a mineral supplement he provides. He targets his beef as grass-finished beef for health-conscious consumers looking for lean beef and apprehensive about growth hormones. He says the change has been well worth his time.
“I think we need to embrace the consumer and be up front with them about what we offer. The days of ‘don't tell us how to produce our food’ are fading fast. Actually, I think if we were all able to go back to a simpler production system like grass-fed beef, many producers would find it's what they wanted to be doing from the very beginning,” Fulton says.
All three men suggest studying consumer trends and settling on something that isn't being offered, or do a better job of providing something that is being offered.
Whether it's grass-fed, all-natural, corn-fed or breed-specific, producers have an opportunity to target a select audience.
“Farmers and ranchers often feel the consumer is ignorant when it comes to beef,” Fulton says. “That's not true. They're way ahead of us and, though they may not know the exact amount of steps or work that goes into producing beef, they know what they want to eat. We need to listen to what they want.”
Hone your marketing skills
Once a production niche is identified, direct marketers must follow through with marketing and sales. After all, the goal is to make money.
Dallefeld, who operates Prairie Creek Cattle Co., offers this marketing advice to producers in the novice phase of selling direct:
In the beginning, avoid marketing by the cut. You need to be able to market all the cuts and utilize the whole animal. Dallefeld says that if you do have to sell by the cut, such as steaks, offer some type of beef package so you have an outlet for undersold cuts.
Communicate with customers. “Communication with clients is the key,” Dallefeld says. As an example, he says, “you can't be 100% sure of when the cattle will finish, so just stay in communication and don't promise customers an exact delivery date.”
Don't let the specialty beef sectors (organic, natural, etc.) scare you. There are several natural tools available for use in helping cattle stay healthy, gaining and eligible for these programs, Dallefeld says. In his operation, he uses natural fly-control products as well as kelp to help with pinkeye and Basic H for deworming.
Tout your animal care and stewardship practices. “People want to know where their meat comes from and how it was raised,” Dallefeld says. “Origin and animal handling outweigh organically raised products in consumer preference.”
He also suggests qualifying your management practices by becoming certified through such programs as Beef Quality Assurance. In addition, include information about your operation and beef production stewardship practices in your beef promotion efforts — via a website for online sales, information or a tagline included on your advertising, and creative efforts with budding relationships with restaurants and grocery stores. The latter might include signage or special literature at these points of sale.
As a final tip, these three producers all take stock in the old adage “the customer is always right.” By listening to customers, they've adapted and diversified their operations to meet those demands. The outcome has been higher profits and a more sustainable way of producing beef, they say.
Codi Vallery is a freelance writer based in Philip, SD.
For more information
Ty Malek is a third-generation rancher who began large-scale direct marketing 10 years ago. Based at Highwood, MT, he harvests 5-7 cattle every two weeks. He's built a niche selling beef jerky, but also traditional beef cuts. Visit www.bigskymtbeef.com to learn more.
Kevin Fulton, Litchfield, NE, is a renowned heavyweight lifter and Nebraska farmer who promotes healthy eating and the beef industry through speaking engagements and organic beef sales. Contact him at: email@example.com.
Karl Dallefeld, Worthington, IA, is a Midwest BioAg forage specialist and owner of Prairie Creek Cattle Co. His forage knowledge has aided him in raising cattle on a “salad bar mix” of grasses and legumes to sell as quality, grass-fed beef. Contact him at firstname.lastname@example.org to learn more.