Recognizing that out of the three things that leave the dairy — manure, milk and cattle — only one was bringing in revenue, the Schaendorf family set out to expand its farming enterprise in Hopkins.
Instead of selling all their Holstein bull calves, Ben Schaendorf and his father, John, started a business to finish beef — but not just any beef. The Schaendorf Cattle Co., which was formed in November 2015, is direct-marketing its own branded product, labeled as sustainable, with consumer transparency.
“Consumers don’t just want to know where their food comes from, they want to know how animals are raised, what they are fed and how farmers are caring for the environment,” Ben says. “We assure that our cattle are always provided with proper housing, nutrition, quality animal care, and are under our supervision from start to finish.”
The business went online this month, and product is sold online. However, only a small portion is currently being sold that way as the business seeks to grow its customer base. The rest is going to commercial markets. The goal, though, is to sell the entire animal (all cuts) and all animals online and direct to restaurants.
What fueled this new enterprise was a drop in Holstein beef and bull calf prices. “We asked ourselves, ‘Why are we giving these things away when we can make some money off them?’” Ben says.
With farmers in general only capturing about 15 cents of every food dollar, the goal is to capture a much bigger chunk of the purchase price by establishing a premium product.
“As we saw it, there’s really two ends of the spectrum; there’s organic grass-fed on one side and Walmart discount meat on one end,” Ben says “There’s a whole lot of room in the middle, with potential buyers that we felt weren’t being served.”
But can Holstein beef stand up against the lauded grass-fed, Black Angus meat market?
Ben says a resounding "yes." “The quality is totally there, and it’s very consistent and uniform in size. I’ve been in a lot of high-end steakhouses; this beef is right there. I’ve gotten compliments from my meat processor, and that means a lot.”
Ben attributes the quality to a low-stress environment and no hormones. The 100-by-575-foot steel barn erected in July 2016 can house 1,200 animals, “but we are not maxing it out. We have 950 animals, because we don’t want to cram them in there,” he says. “Happy, low-stress cows make better-tasting beef. We know that people care about where animals come from and what kind of life it had, but taste has to be there. Our product delivers on taste and texture.”
The national average of all beef sold in the U.S. is 2% Prime, Ben says. “Ours is 10% Prime.”
Adjusting to the consumer
Millennials are now the largest consumer group, passing the baby boomers, Ben points out. “They buy food online a lot and are willing to pay more if it tastes better,” he says. “There are predictions that by 2025, direct online food purchases of all kinds will be in the over $100 million-dollar category, and it keeps growing.”
The Schaendorfs looked at grass-fed, organic, direct-to-consumer models, but those didn’t work for them.
They built their own label brand that is USDA-verified as sustainable. “Grass-fed is not sustainable,” Ben says. “It takes over 5 acres to finish an animal, whereas conventional only takes 2.2 acres. We wanted to make the most out of every acre, every pass in the field, every trip with a truck, every movement of a person — it’s all about efficiency. That’s our sustainable plan, which includes care for the environment and the animals.”
Key elements of the sustainability label include crop rotation, manure as fertilizer and locally sourced feed. “Our animals are not fed strictly grain or strictly grass; they are fed a mixture that is all locally sourced. We have cash-grain farmers in the neighborhood who like to market one mile down the road, and we like to use what is around us."
Up and running
Getting started, Ben says, was the hardest part of establishing this new business, which complements an established 2,600-head dairy that produces seven to 12 calves every day. The operation also includes 2,000 acres of corn and hay, and Schaendorf Custom Farming — which has retail offerings — as well as custom harvest and trucking businesses.
“It is time-consuming to get started,” Ben says. “It’s about knowing the market, knowing how to reach them, knowing what their needs are and how to fulfill them.”
The logistics of getting started weren't nearly as complicated. There was room in the dairy to raise cattle from birth to 400 pounds. All that was needed was a finishing facility. Once the barn was up, “It really only takes less than 30 hours a week of labor,” Ben says. “We already have a good team assembled at our sister companies, and the finishing barn is right down the road from the dairy, so a mixer wagon makes one trip a day.”
Bringing in the rest of the team to take product to the consumer meant procuring a USDA facility for slaughter and a USDA inspected facility for processing. Schaendorf Cattle Co. uses a local slaughter company and a processor, that identity-preserves, processes, freezes and packages the meat before it is shipped back to the farm and stored in commercial freezers.
As orders come in, Ben’s wife, Nicole, and their three young children help fill corrugated boxes, which are then shipped in a plastic foam container with 10 pounds of dry ice.
Depending on the location, it costs between $10 and $30 to ship 10 to 20 pounds of meat with the dry ice through FedEx. That cost is directly passed onto the consumer; there's also a flat $15 handling fee on every order.
Nothing is shipped on Thursday or Friday to guarantee delivery by the weekend. Pricing is between conventional and grass-fed, and Ben says it’s not for everybody. The target is mostly those living in urban communities. Meat is sold in packages that include burger, brisket, roasts, steaks, stew meat and more. “It’s important to sell the whole animal,” Ben says.
The packages range from $95 to $275.
Getting the word out
Currently, Schaendorf Cattle Co. is not using paid advertising. Instead, an e-commence team of professionals was hired to set up a website and coordinate digital marketing through social media, including Facebook, LinkedIn, Twitter and Instagram. The website can be found at schaendorfcattlecompany.com. “We are working to build up our social network and create a non-forced or coerced clientele through those channels — sharing, liking and referrals,” he says. “We get people asking about it all the time, and the millennial generation is very excited. Many of them have never been on a farm, and the uninformed consumer is fear-purchasing.”
Schaendorf Cattle Co. is offering transparency and a "birth to beef" trademark. “We offer pictures and video on the web,” Ben says. “Consumers can trace our beef to our farm because it is never outsourced or repackaged and labeled. We are building a brand, not just selling meat.”