August 1998
Plunging Beef Prices Make 'Natural Beef' Attractive
A new publication detailing the marketability of regional grass-fed "natural beef" could help ranchers consider their options during a severely depressed beef market, reports a University of California farm advisor.
"Natural Beef: Consumer Acceptability, Market Development and Economics," a free 84-page publication is the outgrowth of a 1996 project funded by the UC Davis-based Sustainable Agriculture Research and Education Program (SAREP).
"We started this publication when beef prices were very low and I thought it'd be another ten years before it would be so timely," says Glenn Nader, livestock and natural resources advisor for Yuba, Sutter and Butte counties. "But guess what—here we are back at the same depressed-price place." Nader says beef prices are currently less than 60 cents per pound, compared to a normal price of about 70 cents per pound.
Nader says beef producers are once again faced with the question "What do you do with an 800 pound steer?" "Ranchers are telling me that they can't sell the beef at the price their bankers says they need to break even," he says.
Research indicates that grass-fed beef could be an additional market niche for cattle ranchers faced with low prices. "Preliminary work shows that this could be a way to diversify ranchers' income stream, but they must be very careful," Nader said.
The publication grew out of work done by a team of ranchers, CSU, Chico researchers, UC Cooperative Extension personnel and students who found strong consumer and restaurant interest in a grass-fed, lower-fat product. Researchers developed a sample marketing plan to provide strategies for potential product development in Northern California, and four case studies are included in the publication to show ranchers what to expect if they pursue this market.
Researchers found that transportation was the most sensitive item for grass-fed beef operations. Costs are greatly reduced if grass-fattening operations are located near a processing plant and the target markets, Nader said. Other factors that are critical for natural beef ranchers are advertising costs, product liability insurance needed to sell at farmers' markets, inventory management, labor laws, county environmental health requirements, and packing.
For copies of the publication, contact UC SAREP at (530) 752-7556; sarep@ucdavis.edu. A World Wide Web version of the document is available at http://www.sarep.ucdavis.edu/grants/reports/nader/
Media Contacts:
Lyra Halprin, (530) 752-8664, lhalprin@ucdavis.edu
