|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 more self-reliant.
The Present: Beef cattle, profits flow out of
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 small farmers.
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
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 slaughter capacity.
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 profit
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 farmers.
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 market.
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
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
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
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
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 products.
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 packaged products.
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
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 beef market.
Pernell Plath is research coordinator of the Community Farm
Alliance (CFA), based in Frankfort, Ky. She can be reached at firstname.lastname@example.org.
For more information about the work of CFA, visit www.communityfarmalliance.org.
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