Grass-Fed? Not Without Grass.
Between Consumer Demand and Drought, Beef Producers Are Feeling the Squeeze
Wednesday, October 17, 2007; Page F01
In 2003, David Simpkins made a bet on the future. The Ohio farmer decided to start feeding grass to his small herd of Angus cattle.
It was, in many ways, a no-brainer. Grass-fed beef was emerging as the new "it" ingredient, hailed by nutritionists as more healthful than traditional grain-fed beef, by environmentalists as more sustainable and by food critics as at least as good as a typical steak. Most important, grass-fed beef could command a 25 percent market premium.
But this summer's nationwide drought stymied Simpkins's transition. The area around his farm in Seaman, about 55 miles from Cincinnati, has received only 19 inches of rain, 12 inches below normal. As a result, there was little grass for his cows to graze on. Instead of keeping them on pasture, Simpkins was forced to sell many to a feedlot.
"It's at least a two-year setback for us. The production we hoped to sell this summer and fall had to be sold, and since there's been no rain to speak of, the calves we just weaned had to be sold, too," said Simpkins, who sells meat under the name Heirloom Beef. "We have nothing to sell now and very little to sell next year."
Since 2000, the number of grass-fed beef producers has soared from 50 to more than 1,000 to meet growing consumer demand. But the Southeast's "exceptional" drought -- the kind that comes around only once or twice every 100 years -- and extreme weather elsewhere are crippling many in the new generation of cattle ranchers. Just when ranchers should be cashing in, weather conditions have delayed production, slashed profits and slowed grass-fed beef's move into the mainstream.
"Many grass farmers were about to enter the black this year," said Jo Robinson, who tracks grass-fed trends and producers at Eatwild.com. "They were at this point where they had the [good] press and the product. But now, because of the drought, they're really hurting."
American cattle traditionally grazed only on grass. But that changed during the Industrial Revolution, when use of machinery created vast grain surpluses. Today, most cattle spend their last days in feedlots, where they are fed a diet of corn that produces a more marbled, fatty beef.
The sustainable-food movement and revelations about the treatment of feedlot animals prompted newfound interest in grass-fed beef. Over the past several years, scientific reports from the Union of Concerned Scientists, among others, have confirmed that grass-fed beef is higher in omega-3 fatty acids and other "good" fats than grain-fed beef. Better genetics and pasture management have helped farmers produce meat that is tender and juicy enough to put on menus at elite restaurants.
Such improvements have caused demand to skyrocket just as the drought squeezes even large producers. Kansas-based Tallgrass Beef decided last year to truck 1,000 cattle several hundred miles, from eastern Nebraska to western Kansas, to find better grazing. This year the company moved a herd from Arkansas to Kansas and another from Florida to northern Kentucky. It's not an entirely unusual practice, said Tallgrass's chief executive, Allen Williams: "You have to follow the grass."
Williams said the drought has slowed Tallgrass production by at least 40 percent. The lack of rain and resulting scarcity of grass mean that the company must wait an extra six to 10 months for the cattle, which normally are slaughtered at 22 or 24 months, to gain the requisite amount of weight and fat. "That's significant economically," he said, "because you're left with the same or even increasing expenses" -- because there is no grass, ranchers have to buy hay or other feed -- "but you have no income against it because you have no cattle to sell."
The result: Grass-fed beef producers say they are being forced to turn down new business. "People are begging for this product," said Jon Taggart, owner of Burgundy Pasture Beef, which began grass-feeding cattle in 1999 in Grandview, Tex., about 40 miles southwest of Dallas, and now processes 500 cattle a year. His ranch suffered several years of extreme drought, followed this summer by severe flooding. "We had 20 inches of rain in 2006, and this year we've had close to 60. It's been tough, but it beats the alternative."
Taggart sells most of his beef online. Popular cuts such as tenderloin, T-bone and rib-eye sell out every week. For promotional reasons, Taggart also supplies several restaurants in his area, including Dallas's Lola the Restaurant. Executive chef David Uygur spent months looking for a producer before persuading Burgundy Pasture to sell him a few steaks a week. "There's not enough to go around," Uygur said.
The good news for grass-fed-beef lovers is that most producers are not yet raising prices. Online, grass-fed filet mignon sells for $25 per pound and up, compared with $17 for corn-fed filet mignon at Peapod.com. (Most Washington area stores don't stock domestic grass-fed beef because production is not yet large or steady enough. And small producers prefer to sell directly to consumers.)
Producers worry that steeper prices could turn customers away. "Prices are already high in the public perception," Simpkins said. "Even if the farmers aren't making any money, it looks like price gouging."
Veteran producers' biggest fear, however, is that the drought will result in inferior products flooding the market, which could undo a newly burnished reputation. When cattle don't feed and gain weight consistently, the meat can be lean, tough and gamy. Because demand and prices are up, newer producers "see it as a great market opportunity," said Scott Barao, manager of Hedgeapple Farm, which has been selling grass-fed beef in Buckeystown for 15 years. "If their cows don't do well and someone buys it and it tastes bad, that hurts all of us."
Still, most experts remain bullish on the prospects. Despite the drought, producers are expanding their operations by drawing new ranchers into the fold. Tallgrass Beef, for example, plans to slaughter 25,000 cattle in 2008, more than three times as many as this year.
And as ranchers gain more experience with grass, it will be easier to survive extreme weather, said Allan Nation, owner and editor of Stockman Grass Farmer trade journal.
"It's a brand-new industry, so every time it hits a hiccup, it's a big deal," Nation said. "This is just one of those times that Mother Nature reminds you that she's in charge."