kpb,
I think what you are looking for is a way to make niche market premiums available to commodity producers. You are still thinking in the industrial model - if you can make $xxx dollars more per animal if it's organic imagine how much you can make with 1000 head. I can understand your thinking, I was brought up to believe that scale equals success and that if you became a huge scale farmer/ rancher it was a sign you had arrived, you had been successful. Clearly if we look at world agriculture today this no longer rings true - example the huge feedlot operations in Alberta with millions invested trying to make $10 or $20 per head profit. If we move to a more organised grassfed market, hire marketers etc we will fail - we are buying back into an industrial model that is clearly broken. The profits will accrue to the truckers, salesmen, processors and retailers of the beef rather than the primary producer. You would also break the valuable link of trust between consumer and producer that direct marketing allows.
The reason I think direct marketing is a possible way ahead is because it is a low turnover/high margin business rather than the other way around. You do not need to be running hundreds or thousands of cattle to make a living. I'll give you some rough figures as an example - please don't nickel and dime them to say my story doesn't add up, think of the concept rather than the accuracy of the figures. My calves from 2005 returned me $695 per head - a value calculated for the day they were weaned (ie any fed beyond weaning had the feed costs removed from their sale price) The grassfed cattle we kept from them will return $1350 next October a difference of $655. I can easily keep them for a year and fatten them for under $400 so I'm making at least $255 more per head selling grassfeds than selling calves. Imagine when we hit the bottom of the cattle cycle and calves make the $450 you suggested - my return then for selling beef will leap by $245 assuming we keep our beef price at current levels. We would be $500 per head better off than being calf sellers! On 20 grassfed beef animals we would return an extra $10,000 over selling calves - look how many feedlot cattle, or grazing yearlings it would take to make that kind of return at $10 or $20 per head (1000 or 500) Even at a high point in the cattle cycle we could make as much on 20 head as on 500 or 250 of the above animals. The bonus would be that instead of pushing for huge scale and low turnover you could concentrate your operation and maybe even sell off some land and you would be well ahead. This is all with demand and pricing at current levels - some sellers in the US are getting US$5 per pound hanging weight for grassfeds - charging over US $3000 per animal for beef! This would be my dream - more producers on the land, earning high dollar value for the produce leaving their land, keeping the money created in the local communities rather than ending up in US corporate vaults. This is possible with direct marketing but not within the current production paradigm.
I think what you are looking for is a way to make niche market premiums available to commodity producers. You are still thinking in the industrial model - if you can make $xxx dollars more per animal if it's organic imagine how much you can make with 1000 head. I can understand your thinking, I was brought up to believe that scale equals success and that if you became a huge scale farmer/ rancher it was a sign you had arrived, you had been successful. Clearly if we look at world agriculture today this no longer rings true - example the huge feedlot operations in Alberta with millions invested trying to make $10 or $20 per head profit. If we move to a more organised grassfed market, hire marketers etc we will fail - we are buying back into an industrial model that is clearly broken. The profits will accrue to the truckers, salesmen, processors and retailers of the beef rather than the primary producer. You would also break the valuable link of trust between consumer and producer that direct marketing allows.
The reason I think direct marketing is a possible way ahead is because it is a low turnover/high margin business rather than the other way around. You do not need to be running hundreds or thousands of cattle to make a living. I'll give you some rough figures as an example - please don't nickel and dime them to say my story doesn't add up, think of the concept rather than the accuracy of the figures. My calves from 2005 returned me $695 per head - a value calculated for the day they were weaned (ie any fed beyond weaning had the feed costs removed from their sale price) The grassfed cattle we kept from them will return $1350 next October a difference of $655. I can easily keep them for a year and fatten them for under $400 so I'm making at least $255 more per head selling grassfeds than selling calves. Imagine when we hit the bottom of the cattle cycle and calves make the $450 you suggested - my return then for selling beef will leap by $245 assuming we keep our beef price at current levels. We would be $500 per head better off than being calf sellers! On 20 grassfed beef animals we would return an extra $10,000 over selling calves - look how many feedlot cattle, or grazing yearlings it would take to make that kind of return at $10 or $20 per head (1000 or 500) Even at a high point in the cattle cycle we could make as much on 20 head as on 500 or 250 of the above animals. The bonus would be that instead of pushing for huge scale and low turnover you could concentrate your operation and maybe even sell off some land and you would be well ahead. This is all with demand and pricing at current levels - some sellers in the US are getting US$5 per pound hanging weight for grassfeds - charging over US $3000 per animal for beef! This would be my dream - more producers on the land, earning high dollar value for the produce leaving their land, keeping the money created in the local communities rather than ending up in US corporate vaults. This is possible with direct marketing but not within the current production paradigm.
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