Despite cattle prices being near all-time highs, marketing beef direct-to-consumer still adds value to beef operations. Two updated University of Missouri (MU) Extension guides help producers understand the numbers and methods behind marketing your beef to consumers.
“Low cattle inventory has widened the gap between a finished animal’s live value and the total value of its retail cuts,” said Jake Hefley, MU Extension agriculture business specialist in Taney County. “Direct marketing gives producers an opportunity to capture part of that value rather than leaving it entirely to downstream segments of the supply chain.”
Producers can examine the revenue potential and additional costs of selling freezer beef with Evaluating Direct-to-Consumer Marketing Opportunities for Local Beef in Missouri and look at their cost of production to feed out their calves with On-Farm Beef Finishing Planning Budget. Both publications are available for free download at extension.missouri.edu/publications.
“Using both publications together helps producers compare the retail value of a processed animal with the cost to bring that animal to finished weight,” said Drew Kientzy, MU Extension senior research analyst. “Grocery store beef prices are front of mind for many consumers. Knowing your breakeven cost and offering competitive pricing for a high-quality product can earn long-term customers.”
Producers are encouraged to use the accompanying spreadsheet tools to help estimate the cost and revenue potential of their own direct-to-consumer beef sales.
Provide price stability
Strong markets draw attention, but producers know conditions can change quickly. When prices are high, it can be tempting to market everything through the sale barn, yet freezer beef doesn’t have to be an all-or-nothing decision, said Jennifer Lutes, MU Extension agricultural business field specialist in McDonald County.
Many farms can operate in both markets by selling more calves into today’s strong auction market while finishing a smaller number for direct customers (or at minimum not expanding direct-market commitments). The key is protecting your freezer-beef customer base now, Lutes said. Those relationships take time to build and will be the stabilizing income stream you’ll want in place when prices eventually ease.
“Consumers value quality and relationships, making the prices they are willing to pay less volatile than prices received at the local sale barn,” she said. “An established freezer beef business can help customers manage costs during high grocery prices and support farm income when cattle prices drop.” — MU Extension
