Starting a Beef Direct Marketing Business

Whether you are currently a beef producer, or thinking of starting a feeding operation with the idea of selling directly to consumers, there are some important things to consider. Selling meat directly to consumers is completely different from selling animals through commodity market outlets such as auctions, livestock sales yards or commission agents. The advantage to these outlets is that you drop off the animal and you get a check in return.  The disadvantage is that you are a price taker, not setter, and may be leaving a few dollars on the table.  This is why some producers are looking at direct marketing their beef right to the consumer.

The good news is that more and more consumers are willing to pay a higher price to support farmers they know or are utilizing an alternative production system.  Examples of this may be organic, natural, grass-fed, or home raised. Home raised is a great way to connect with the typical direct market customer.  They are really wanting to buy from a family operation and the home raised tells the consumer that the animal were raised were you live.   By virtue of its description, direct marketing involves taking out the middleman and you become the price setter for the product. However, before you jump in there a few questions you must ask yourself.

 Do I have what it takes personally?

To start, here are a few of the personal qualifications to take into consideration to be a good direct marketer. Are you creative, flexible and willing to take risks?  Are you friendly, outgoing, and enjoy meeting new people?  Do you have the support of your family at home, especially the extra time involved?  If these are not descriptors that fit you direct marketing may not be the best fit for you, or you may consider partnering with someone who does have these capabilities.  In addition to the personality traits the person also has to be knowledgeable about the production system you are using and be able to tell the story of your farm. This is a crucial element to success of the farm because the consumer is willing pay a premium to someone they can connect to.

 What do I have to sell and how do I sell it?

After you have decided that you do have what it takes personally to be a direct marketer, what are you going to sell and who is your target customer? What is your product or products: wholes, halves, quarters, or a variety of cuts? Do you want to sell on-farm, at farmers’ markets, or to restaurants and grocery stores? Why will a potential customer buy from you and what products will they buy? What is your customer willing to pay and how you are going to set the price for your product?  There are various tools available to help set price, and it all starts with knowing your cost of production.  One tool is the Freezer Beef Pricing Worksheet.

 What are Rules and How Do get it to My Customer?

Once you identify your target customers and how you will reach out to serve them, you should determine how you will get the product to them.  Distribution and regulations can be challenging for many direct marketers. Both can be even more complicated for meat marketers because refrigeration or freezer space is necessary if you will be transporting your product to other locations and may need to be licensed and inspected. Some farmers carry freezers on a trailer and set them up at farmers’ markets; others carry their products in large coolers; still others have made the switch to a refrigerated vehicle. You need to decide what works best for you. Keep in mind that this is an area where you’ll need to work with a representative from the Wisconsin Department of Agriculture – Division of Food Safety to make sure you comply with local and state regulations.

Direct marketing beef has an opportunity to add value to your beef operation.

Written by: Adam Hady, Agriculture Agent Crawford & Richland Counties and recently appeared in Wisconsin Agriculturist magazine.

 

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