Beef cattle generate nearly as much income for Kentucky farm
families as tobacco. Yet, as tobacco income continues to decline,
the profit potential from cattle is rising. Kentucky farmers
are poised to reap huge rewards from beef cattle production,
although the lack of a well-organized system of production,
processing, distribution and marketing is hindering this sector’s
Community Farm Alliance members have been working to understand
the way the system operates now and the possibility for creating
a more farmer- and buyer-friendly approach to the cattle business.
What follows is a summary of those findings and an outline
of a few ways in which Kentucky's beef sector could be made
The Present: Beef cattle, profits flow
out of state
Although Kentucky is the largest beef producing state east
of the Mississippi, most of its cattle are finished and processed
outside its borders. Kentucky farmers work hard carefully
tending their cow-calf herds, yet they are unable to retain
much of the value of their animals when they’re sent
to out-of-state, large-scale feedlots and packers. Tremendous
concentration in the industry (i.e. mainly large, corporate
feedlots and packers) puts smaller family farmers at a disadvantage
when it comes to price discussions. Since the average herd
size in Kentucky is only 29 head, most of its farmers are
Currently, Kentucky has around 1,120,000 head of beef cattle.
Average live market weight is 1,150 lbs, of which approximately
569 lbs is marketable red meat (plus 27 lbs of variety meat).
Kentucky cattle farmers produce approximately 637,280,000
lbs of beef per year. With an average beef consumption of
67.2 lbs per person and a Kentucky population of 4,065,556,
Kentuckians consume around 273,205,363 lbs of beef per year.
Thus, Kentucky produces enough beef to meet all of its in-state
needs, with 364,074,637 lbs (18,203 tons) remaining for export.
The challenge is to begin bringing cattle feeding and slaughter
back to Kentucky so that producers can gain the value-added
benefits of selling the end product. Under the current system,
Kentucky farmers take on the high risk and intense management
of raising calves, yet they are rewarded with comparatively
little of the ultimate value of that animal.
Kentucky has a competitive edge in the cattle industry, since
it already has the extensive infrastructure required to breed
and raise calves. The next step is closing the loop, bringing
Kentucky’s cattle industry home. Kentucky has only a
handful of feedlots capable of handling large numbers of cattle,
thus the majority of its animals are shipped to feedlots in
Iowa, Kansas and Oklahoma. Even if Kentucky were to finish
its cattle in Kentucky, the state has limited and underutilized
Kentucky has the capacity to slaughter up to 1,000 beef cattle
per week in 58 (mostly small) facilities scattered across
the state, but only about 300 head/week were actually fed
out in Kentucky feedlots in 2001. Of those 58 plants, only
19 are USDA inspected. The other plants are “exempt,”
meaning that they are only able to custom process beef for
direct sale. The state has an enormous need to improve cattle-finishing
operations and increase slaughter capacity by at least 315,000
beef cattle per year.
The Prospect: System changes could return
Though the challenges with reshaping Kentucky’s cattle
industry are many, the potential gain is well worth the effort.
The greatest opportunities for change include the formation
of flexible beef networks, developing alternative finishing
systems, establishing a state-level meat inspection service,
upgrading existing slaughtering capacity and constructing
new units when needed, and, finally, advancing local marketing
opportunities. CFA envisions collaborative, appropriately
scaled and flexible production, processing and marketing systems
that will capture the full value of beef products for Kentucky
1. Create flexible beef networks -- A flexible
beef network is a strategic alliance of farmers that collaboratively
produce beef products. Networks are adaptable to the particular
needs of each group and allow for sharing of different stages
of the production cycle (including cow/calf herds, backgrounding,
finishing). The network goes beyond production, however, to
include shared processing and marketing. These networks will
enable Kentucky farmers to engage in whichever aspect of the
production cycle best suits their needs and abilities. Networks
can be formal incorporated entities, such as the Green River
Cattle Company, or very informal, like the “Barron County
Beef Cooperators.” Creation of these associations will
strengthen relationships among farmers while allowing them
to retain a greater share of the profit.
2. Finish cattle at the right scale -- A
frequently cited myth in Kentucky is that there is not a suitable
climate for finishing cattle. Though excess moisture can create
mud pits out of huge feedlots, appropriately scaled feedlots
do not develop these problems. As with so many other aspects
of agricultural systems, scale is extremely important. Though
Kentucky may not be able to build the massive feedlots of
other states, the many social and environmental problems with
these facilities calls into question their desirability anywhere.
Thus, smaller-scaled feedlots are a more suitable option for
finishing Kentucky cattle.
While it is true that Kentucky is at a comparative disadvantage
with the cheap grain prices for finishing cattle of the Corn
Belt states, it has something even better—abundant pastureland.
Forage-fed and -finished beef offer a value-added, economical
and sustainable option. A recent taste-test by chefs found
that meat raised and finished on forage is as tender as, and
even tastier than, grain-fed beef.
Other surveys point out that 30 percent of beef eaters actually
prefer the taste of pasture-finished beef and another 20 percent
had no preference between grain-finished and forage-finished
meat. Forage beef thus encompasses at least half of the potential
Furthermore, beef raised on forage is higher in CLA (conjugated
linoleic acids), which have numerous health benefits including
fighting cancer and protecting nervous system functioning.
Raising cattle on pasture also has numerous positive environmental
benefits. Many farmers choose not to completely finish their
cattle on grass, but have found that switching to grain a
few weeks before slaughter is as effective as longer grain-finishing
in terms of the desired beef characteristics.
3. Resume state inspection -- The Wholesome
Meat Act of 1967 allowed individual states to develop their
own meat inspection programs that met or exceeded the USDA’s
own inspection standards. Under the law, meat processed in
state-inspected plants can be sold either directly to customers
or through retail outlets. The only restriction is that the
meat cannot be sold across state lines (although some efforts
are being made to change that requirement).
Kentucky did create an inspection service under this act.
Unfortunately, the state discontinued the service in February
of 1972, turning over inspection entirely to the USDA. Lack
of a state inspection service is a serious impediment to creating
a more locally integrated farm economy in Kentucky. Many meat
processors in the state feel that the USDA inspection service
is inflexible and insensitive to their needs.
Since the majority of the processors in the state are not
USDA inspected, reviving the state inspection service would
open the door to many processors who don’t wish to hassle
with USDA inspection. Since farmers using state-inspected
plants could expand sales, many exempt processors have indicated
that a resumption of state inspections would bring in more
business and make expansion of operations more viable.
Though reviving the service would cost money at a time of
tight budgets, the community investment and multiplier effects
for Kentucky’s farmers and communities would be far
greater than using public money to attract large, out-of-state,
unresponsive and exploitive processors.
Smaller processors have numerous other challenges in competing
with mega-processors, one of which is disposing of the offal.
Large slaughtering facilities are actually able to sell their
offal, yet small plants pay to have it taken away, adding
to processing costs. Kentucky has only one rendering plant
in northern Kentucky, and constructing another which could
more conveniently handle waste from other parts of the state
has little political support. Thankfully, other options exist.
Rendering is only one way to handle offal and dead animals;
another is composting. The Kentucky Department of Agriculture
states that new composting options offer “the advantage
that they are more environmentally friendly, produce very
little odor, and the products of degradation are usable as
fertilizer.” Extensive information on methods, costs
and uses of the compost is now available. Composting systems
are low-cost, low-maintenance and sanitary; proper facilities
can be constructed primarily with readily available materials.
State law (KRS 257.160(3)) sanctions composting as a viable
alternative for Kentucky. Though our smaller processors may
not be able to sell offal as the larger plants do, they can
certainly bypass rendering plant fees and even sell the finished
Another option to improve efficient slaughter and processing
in Kentucky is to split these two operations into separate
facilities. As farmers branch out into more local and specialty
markets, they often find that these markets demand unique
cuts and ordering options. Farmers may encounter bottlenecks
in having both slaughtering and processing handled at a single
facility. For these farmers, controlling their own custom
processing makes the most sense. Accordingly, though Kentucky
still has a need for more inspected kill sites, the state
could also improve processing efficiency by establishing more,
decentralized custom-processing sites.
4. Develop varied markets -- Re-creating
Kentucky’s beef industry will also require a renewed
focus on the end product—the meat on the dinner table.
The above-mentioned improvements to the system will only go
so far towards creating a locally integrated beef economy
for Kentucky without significant attention to the quality
and type of beef made available for sale. Not all portions
of the animal are of equal quality or have the same demand.
Different markets have their own individual needs for product
type, quality and consistency. Understanding marketing options
is crucial to establishing an efficient, viable beef system.
Retail Sales -- Retailers’ most significant concerns
are with product quality, consistency of supply and price.
Meat departments prefer boxed fresh beef. Many retailers are
locked into purchasing contracts with particular suppliers;
however, most have at least some flexibility with where they
make their purchases. This adaptability is most pronounced
with smaller, independent grocery stores. Large chain stores,
such as Kroger and Wal-Mart, make huge purchases through warehouses.
Farmers who have accessed these markets can find that they
lose control of their enterprises and that the gain is not
worth the risk.
Thus, especially for smaller farmers, the independent grocers
are the best option. Meat department managers in these stores
are very interested in purchasing from local farmers, and
even willing to pay premiums if the product is high quality
and meets their needs. Nevertheless, meat buyers are not always
aware that locally produced meat is an option. As with all
markets, farmers and buyers must work closely with each other
to ensure that the requirements of all parties are met.
Other Markets -- Though independent grocery stores present
the most viable marketing option for much of Kentucky’s
beef, other lucrative marketing opportunities exist. Natural
food stores present a market for beef produced without antibiotics
and hormones. Often these stores are willing to offer frozen
cuts in addition to fresh meat. “Gourmet” food
stores can also market the highest quality pieces and specialty
In addition, restaurants offer a great deal of potential
for marketing locally produced beef. Recent surveys in Kentucky
have found that so called “high end” restaurants
were the most willing to purchase local meat, and were most
prepared to pay premiums. Marketing prospects exist with other
restaurants, too. These same surveys found that 63 percent
of restaurants were interested in working with individual
farmers and 72 percent were interested in working with producer
organizations. Restaurants typically prefer fresh, vacuum
Direct sale of beef to consumers is another potentially profitable
option for Kentucky’s farmers. Farmers can sell live
animals to customers, letting them have more input into where
and how the animal is processed.
Farmers can also custom process cattle themselves and sell
individual cuts without an intermediary. Often, community
supported agriculture (subscription farming) services offer
their members access to meat producers. Pairing with vegetable
CSAs could be a profitable option for many farmers. Whether
through a CSA or not, direct sales typically provide farmers
with a much higher return for their labor than selling wholesale
to either grocery stores or restaurants.
In terms of product type, ground beef represents 43 percent
of all beef used in foodservice and 63 percent of all household
beef consumption. Thus, focusing on this product alone would
meet the needs of nearly half of all beef consumers in Kentucky.
Bringing the beef back home
Reshaping Kentucky’s beef industry has high profit
potential for farmers and the advantage of providing fresh
and safe meat to beef consumers. Currently, the system is
so intricately plugged into national and international markets
that Kentucky farmers must make production and marketing decisions
based on forces far beyond their control. Bringing Kentucky’s
beef economy home will provide our farmers with much more
influence over how they raise their cattle, where they process
the animals and who they market to.
A localized system will provide customers with more information
about how their meat is raised and more options for purchasing
the end products they prefer. As our farmers shift away from
tobacco production, it is vitally important that they have
more stable income sources than those provided by the current
Pernell Plath is research coordinator of the Community
Farm Alliance (CFA), based in Frankfort, Ky. She can be reached
For more information about the work of CFA, visit www.communityfarmalliance.org.