COLLEGE STATION – Though herds are smaller, the profit-margin potential is greater for those venturing into the grass-fed beef business, according to experts.
A recent grass-fed beef conference at Texas A&M University, sponsored by the Texas AgriLife Extension Service, featured experts and producers discussing several aspects of an emerging industry sector.
“We had far more registrants than we had initially predicted,” said Dr. Rick Machen, AgriLife Extension beef cattle specialist. “This aspect of beef production obviously is gaining more attention, and there is a hunger for information on how to get started or become more profitable. I think we identified several areas that gave producers some take-home ideas and an overall broad view of what is going on in the beef industry right now.”
Attendees had the opportunity to learn about several topical areas, including fundamentals of growing forages, nutrient needs of cattle, beef processing, economic sustainability, and production and marketing.
“Whether you call it grass-fed or organic, it’s one of the most interesting aspects of the cattle business right now,” Dr. David Anderson, an AgriLife Extension livestock economist, told attendees.
Anderson discussed the various aspects of getting into the grass-fed beef business, starting with a basic business plan. He said producers must evaluate the consumer they are catering too and if their business is profitable.
“You need to identify what your goal is and what you want to do with your business,” he said. “Are you making enough profit to keep doing it as long as you want or do you want to perhaps someday pass it down to heirs? These are some things to consider going along.”
Anderson emphasized the need to keep good records, that the cows are “profit centers” and producers need to keep track of income and expenses on females. The expense breakdown on a female cow is $571.13, factoring in depreciation, veterinary health expenses, feed, etc. With fewer cows to operate than a regular cattle herd operation due to forage availability, Anderson said each carcass produced has to be sold at a high margin.
“When you are grass finishing and have fewer cows for a given area and fewer calves to market, you’ve got to be able to sell the whole carcass at a high price,” he said.
Bob Meeks, a South Texas producer, was part of a panel of speakers who discussed their own experiences of being in the grass-fed beef business.
“This is a niche market and there are a growing number of consumers who want access to locally grown meat,” Meeks told participants.
He said there are opportunities for producers to capitalize on demand.
“Consumers will pay 30 percent more for natural meats and 15 to 200 percent more for organic meats.”
He noted there’s a $350 million market for natural and organic beef products with a growth potential of $1 billion more during the next five years.
Other program topics included cattle best suited for the grass-fed beef production, preventative heard health management and a producer panel.
Machen said plans are to hold another grass-fed conference in the future.