Making the Cut: Direct-to-Consumer Beef Sales on the Rise

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V. Todd Miller

Direct-to-consumer beef sales opportunities have drawn increasing interest from producers since supply chain disruptions caused by the COVID-19 pandemic led to a period of shortages for retail grocers. A few LSU AgCenter experts have examined the trend and were eager to provide some insight.

Ashley K. Edwards, AgCenter extension livestock specialist, has worked with beef producers interested in selling their product directly.

“Our beef cattle agents received numerous calls about it during the pandemic and after,” Edwards said. “So much so that I coordinated a program for direct marketing of beef back in July.

The workshop featured speakers from the industry and LSU AgCenter. Attendees were able to join in-person or virtually and engage with speakers throughout the day.

“Our goal was to emphasize all aspects of beef production, including management strategies, the harvest process, carcass quality and yields, product marketing and general promotion of beef,” Edwards said.

AgCenter agricultural policy expert and economist Michael Deliberto teaches a farm management class on marketing and says research gleaned from Penn State Extension proved to be an excellent learning tool for his students.

Direct marketing of livestock products is not as common as that of fruits and vegetables because livestock products require a high degree of processing, and a larger number of resources like land and capital,” he said. However, direct marketing can provide price premiums and a niche marketing strategy for beef producers.

Deliberto said for some beef producers, marketing and selling beef directly to consumers has the potential to increase profits in comparison to those received through more conventional market outlets.

Direct marketing obviously eliminates the middle party in the supply chain,” he said. There are multiple ways a beef producer can market your livestock directly selling to a packer or buyer, selling the animal to a consumer, selling retail cuts to the consumer and setting up a processing facility.

Maria Bampasidou, an AgCenter agricultural economics and finance specialist who studied grass-fed beef for a research project, said that when selling through avenues like a farmers market, the direct sales process differs mainly in three aspects: product, cuts and price.

In terms of product, direct sales are usually frozen, whereas in grocery stores we are seeing more fresh meat,” she said. “Secondly, you are dealing with more specialty cuts, and you also have the option of purchasing boxes, subscribing to services, etc. Finally, with price, there is a premium with direct sales, and since you may find producers selling through the farmers market that premium would be higher as they target a different clientele.

Bampasidou went on to say that a producer who sells by the pound and at a higher quantity, such as a quarter or half a cow, will make about the same money if they focus on specialty cuts. So, there is a balance in selling wholesale or direct-to-consumer.

One producer to provide direct-to-consumer sales early is Iverstine Farms Butcher out of Kentwood. They’ve been selling beef, pork and poultry from their Baton Rouge shop since 2016 and have recently expanded into a new location, providing them with more retail space, as well as offering Butcher Bundles delivered monthly to subscribers’ homes. Owner Galen Iverstine says that while direct sales have always been part of his business model, things expanded due to grocer supply chain issues during the COVID-19 pandemic.

As grocery store supplies started dipping, we saw a lot of demand on our end,” he said. “At first, we didn’t know what to expect. We began doing next-day delivery, which was free for orders over $100. That was huge for us because we were able to keep everybody employed and actually saw about a 20% increase in sales. It completely shifted our model.

Iverstine Farms sells grass-fed beef, which may differ in flavor from the grain-fed variety with which consumers may be more familiar. It is also more expensive to produce, but Iverstine believes the quality is worth it.

“Grass-fed beef has a more complex flavor profile than grain-fed because the flavors of the grass of the season will show up in the meat,” he said. “If you compare a grain-finished animal to one that is grass fed, you’re looking at about 10 months longer to get that animal ready for processing. Land is the most expensive part of producing beef cattle and you’re tying up more land by having them on pasture longer.”

Deliberto says if you are a small-sale livestock producer, your production costs can put you at a distinct disadvantage as fixed costs are generally spread over fewer animals and feed costs may be greater than those used by larger producers because the larger producers can purchase in greater bulk and often at discounted prices.

Direct marketing allows a smaller producer to set a higher price to account for higher input costs, ultimately resulting in more net profit,” he said. Thus, when selling directly to consumers, small scale producers can set selling prices at a level that ensures profitability, if they know their production costs.

V. Todd Miller is a writer and editor in AgCenter Communications.

A man in a white coat cuts pieces of meat and bone from a larger carcass.

A butcher cuts meat at the Iverstine Farms store in Baton Rouge. Photo by V. Todd Miller

Red meat lies on a shelf.

Cuts of beef are lined up in a freezer at the Iverstine Farms store in Baton Rouge. Photo by V. Todd Miller

12/15/2022 5:06:39 PM
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