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Grass Fed Beef Market Growing

published: October 21st 2008
source: University of Nebraska

KEARNEY, Neb. – About 2,000 U.S. producers will market grassfed beef valuing approximately $350 million retail this year, said Allen Williams at a recent University of Nebraska–Lincoln Center for Grassland Studies conference in Kearney.

Williams, Chief Operating Officer of Tallgrass Beef Company, put market potential at 20-25 percent of the total American beef market, or about $15 to $20 billion in annual retail sales. He said that his company has identified four primary consumer markets for grassfed beef. Those include young and middle-aged families, primarily professionals; retired or ready-to-retire baby boomers concerned about their health; the wellness and fitness market including medical organizations; and consumers concerned about the environment and humane treatment of animals.

Most buyers of grassfed beef work for retail grocery chains including upscale grocery chains and mid-level chains that are putting in health food sections, Williams said. Every part of the restaurant industry, from white table cloth to fast food, uses grassfed beef and so do institutional food services.

Williams listed four top challenges for the grassfed beef industry.

   1. Proper cattle genetics.
   2. The skill set necessary to manage forage and cattle in a 367-day feeding situation.
   3. Capturing economies of scale.
   4. Overall development of infrastructure to process and distribute grassfed beef.

“There’s a segment of the producer population doing this successfully,” Williams said. “These include the direct marketer, who sells directly to consumers, the mid-level marketer and the major breed programs that market several thousand cattle a year.”

Direct marketers sell at farmers’ markets, food cooperatives and over the Internet. Other producers market through wholesale channels, as well as direct marketing channels.

Ranchers wanting to convert to grassfed beef production, should make sure to calculate the true cost of production. They need to understand the current genetics in their cattle and the type of genetics they will need to produce this kind of animal. They should take a look at the forage species available and their grazing systems. All of these factors will weigh heavily in a their ability to compete in this beef market.

The Center for Grassland Studies is a specialized center within the Institute of Agriculture and Natural Resources of the University of Nebraska–Lincoln.