Imagine a sea parceled out to hundreds of millions of consumers, who have instant access to the quantity they need and want, every day of the year at any time of day.

That’s basically what happens with beef every year, some 26 billion lbs. in 2011, according to USDA’s Economic Research Service (ERS). Beef production in 2011 was worth about $79 billion.

Every ounce of beef produced reaches domestic consumers through either retailers or food service operators. In turn, every ounce that leaves the packer and reaches retailers and foodservice providers must travel via a simple-appearing, yet extremely complex network of wholesalers, distributors and further processors.

Generally speaking, retailers and food service providers either buy directly from packers, from wholesalers/distributors who buy from packers, or from further processors. A further processor example is a company that buys trim to make and sell as ground beef, or a company that buys and cooks hamburger to create taco meat mix.

“Year to year, there’s about a 50% split between beef going to retail and beef going to food service,” says Trevor Amen, director of market intelligence for the National Cattlemen’s Beef Association (NCBA), contractor for the beef checkoff program.

Of the half going to food service, Amen explains about 65% is ground beef with the remainder being whole-muscle cuts. Of the half going to retail, about 50% is ground beef; the other 50% is marketed as fresh beef cuts.

These clear-cut avenues get shadowy in a hurry, though, because some companies serve multiple functions.

For example, Jim Henger, NCBA senior executive director of business-to-business marketing, explains many packers also own further-processing facilities.

Likewise, some of today’s largest retailers, such as Walmart and Costco, have their own divisions that serve the wholesale function, buying and warehousing a sea of beef, then parceling out the quantity and kind needed by various stores.

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For purposes here, wholesale is defined as purchasing a large volume of beef and then selling and/or distributing it in smaller quantities and/or different varieties.

In the case of beef, trucks carry about 40,000 lbs. in a load, whether that weight is in live cattle, swinging carcasses, boxed primals or boxes of specific cuts of specific portion sizes.

“Wholesalers can buy full truckloads, get a cheaper price and maintain a fresh inventory,” Henger says. Conversely, he explains smaller-sized retailers and food service operators may not have the capital to deal in truckload quantities or enough business to turn enough volume to keep such a sizable inventory fresh.

For smaller retailers, wholesalers, like Supervalu and Associated Grocers, perform that same function. In food service, the largest wholesalers include the likes of Sysco Foods and U.S. Foodservice.

“Typically, wholesale used to be the step between the packer and the retailer,” Henger says. It still is, but he explains the line has grown almost invisible in some cases as large retailers take on the role themselves.

Incidentally, another reason the lines become murky is the simple fact that most of the data involved in figuring out who sells to whom is proprietary.

As an example, the beef checkoff funds research of beef volume and dollar sales within the retail and food service channels. For retail sales information, Amen says they rely on Freshlook Marketing retail scanner data. For food service, they employ volumetric data through Technomic. Neither is fully reflective of every beef purchase or sale within the channels.

beef's trip from packer to retail