By Adam Hady
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 farmers who are using 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 really want to buy from a family operation, and the home-raised label tells the consumer that the animals were raised where you live.
By virtue of its description, direct marketing involves taking out the middleman — 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?
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 and outgoing, and enjoy meeting new people? Do you have the support of your family at home, especially regarding the extra time that will be 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 these personality traits, that person must 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 the success of the farm, because consumers are willing to pay a premium to someone they can connect to.
What do I have and how do I sell it?
After you have decided that you do have what it takes personally to be a direct marketer, you must determine what you are going to sell and who your target customer is. 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 are you 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 the rules?
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 transport 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; and 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, Trade and Consumer Protection’s Division of Food and Recreational Safety to make sure you comply with local and state regulations.
Direct marketing beef has an opportunity to add value to your beef operation. For further information about direct marketing beef, visit the Wisconsin Beef Information Center.
Hady is agriculture Extension agent in Crawford and Richland counties. This column is provided by the University of Wisconsin-Extension’s Wisconsin Beef Information Center.