We’ve discussed the growth of sales of grass-fed beef in the United States a fair amount recently. With that rise in popularity, the industry is faced with new and interesting challenges.
A recent study — collaboratively published in April 2017 by Stone Barns Center for Food and Agriculture, Armonia LLC, Bonterra Partners, and SLM Partners — delves deeply into the current state of American grass-fed beef based on2015 and 2016 numbers. (If you want all the details, check it out here.)
The U.S. beef industry
To understand the state of grass-fed beef in the U.S., it is good to have an idea about the entire beef industry in general. In total, four major players — Cargill, JBS, National, and Tyson — dominate the U.S.beef packing market, buying more than 80% of the cattle in the country. The grass-fed industry made up only 4% of the total beef market in 2015.
A large share of that grass-fed number — about three-fourths — is actually “unlabeled grass-fed beef.” Also known as “default” grass-fed, it is meat from cattle that spent their entire life on pasture but did not go through the finishing phase and is usually used in ground beef or cheaper cuts.
There is a large price gap between conventional and grass-fed beef, which is due to the beef supply chain. The large beef suppliers/packers — the “big four” mentioned above — have control of pricing at the cow-calf and stocker production phase as well as some feedlots, packing operations, and shipping. These companies are also looking for more vertical integration so that they have more influence on the more aspects of the supply chain.
Additionally, grass-fed beef generally lives 22 to 26 months before it reaches the standards of quality and marbling that the market requires. Comparatively, grain-finished live 10 to 16 months to reach the same market acceptable weight — although it is likely between 12 to 24 months. Every day a cow is kept alive, is another day of risk for the rancher that his or her cattle will not live long enough to go to market. For grass-fed beef ranchers in the U.S., this is an increase in the risk that they will not make money from their cattle operations.
Most of the grass-fed operations in the U.S. are quite small. Groups like the American Grass-fed Association and others have made efforts to organize many of these small family farms and ranches, which was estimated to be in the ballpark of about 3,900 grass-fed producers at the end of 2016. Compare that to the 600,000 total number of cattle production operations in the U.S. and you see the disparity that leads to the lower availability of grass-fed beef and higher price.
U.S. grass-fed future
The U.S. grass-fed beef operations are also at a disadvantage compared to not only the conventional beef producers but also beef imported from outside of America.
For instance, the USDA has a very lax system of regulating grass-fed beef labels which allows for some marketing trickery when it comes to the labeling of cows that may be finished at a feedlot to be marketed as “grass-fed, grain-finished,” for example. Some grass-fed and agriculture-related organizations have created their own labels so that consumers can feel some standard is being met when it comes to labeling. Two of the more well-known include the American Grassfed Approved logo or the Food Alliance certification.
Conventional beef meanwhile has a “Certified” labeling designation that often has to do with marbling — Prime, Choice, etc. — and the type of cow it comes from — Angus, for example. Standards in other countries are actually more rigorous when it comes to whether or not cattle were raised on pasture and in a humane manner.
The other issue facing U.S. grass-fed beef operations is the climate, which puts it at a significant disadvantage to imported grass-fed beef from places such as Australia and South America. There are very few areas of the U.S. that have the climate to grow grass and forage year-round for cattle to spend their entire lives on pasture and not moved to a feeding facility. This is not the case in Australia where both the massive amounts of untouched land and the weather have made it possible for almost all of its beef to be naturally grass-fed and grass-finished.
Domestically, there are very few areas that have a year-round growing season — basically, they are Florida, and various parts of Texas and the South. Also, many of the regions where cattle are raised don’t have the high-quality grass that is needed to marble beef — large swaths of pasture land have been plowed over to grow soy and corn — ironically, for cattle feedlots.
We get a large amount of our grass-fed beef from Australia because of their high standards, in particular, all cattle need to meet an exceptionally high quality of life standard. However, we are continually meeting and partnering with more and more U.S. family farms and ranchers who are running their operations at high standards that are not only humane but also, increasingly, better for the planet due to regenerative farming practices.
We are really excited for the next phase of grass-fed beef’s growth in America, and we are even more proud to be working hand-in-hand with the dedicated ranchers leading the way for this new phase of high-quality, humanely-raised U.S. beef.