Could grassfed beef become mainstream?

Dive Brief:

  • Consumer demand for grassfed beef is helping grow the sector to a size that could compete with feedlot systems, reports Civil Eats.
  • Grassfed beef still accounts for less than 1% of U.S. consumption, but it has huge potential among consumers seeking natural, organic, more sustainable, healthier and animal-friendly foods. Consumption of beef fell about 2.3% each year from 2006 to 2015, but retail sales of fresh grassfed beef have increased from just $17 million in 2012 to $272 million in 2016.
  • According to a new report on the grassfed beef market, the sector still faces significant challenges. These include consumer perception that it doesn’t taste as good as conventional beef, competition from imports and a shortage of processors. Due to the dominance of the feedlot system, many smaller slaughterhouses have shut in recent years, and small farmers have to pay big mark-ups to access larger ones because they process fewer animals.

Dive Insight:

The grassfed beef industry is optimistic as consumer demand for their product has skyrocketed, but it doesn’t underestimate the challenges ahead — not least in taking on feedlot systems that have a huge amount of resources behind them. The “Back to Grass” report from the Stone Barns Center for Food and Agriculture in New York explores the economics of grassfed beef and looks at the ways in which beef production might gradually shift away from feedlots.

Some might argue that a beef industry so dominated by intensive production is unlikely to see dramatic change. The report argues that gradual change is indeed possible — and that there is enough land in the United States to support a massive scaling up of grassfed beef production. It would require conversion of the 17.6 million acres currently used to grow grain for feedlot beef, as well as grasslands and land used in U.S. Department of Agriculture conservation programs.

Interest in the idea is growing fast, and the two biggest U.S. beef packers — JBS and Cargill — both now carry grassfed beef. JBS took on the market through its acquisition of U.S. grassfed producer Grass Run Farms in 2015, and Cargill takes advantage of Australian imports.

However, price is still a major limiting factor. Grassfed beef commands an average 71% premium, according to Nielsen data. Unless the price comes down, it is unlikely to be able to compete on a meaningful scale.

To tackle this challenge, a collective approach could be required. The report points to the way that Organic Valley has worked in the dairy industry. Bringing together marketing, processing and distribution might help make the grassfed beef industry more competitive, too.

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Filed Under: Meat / Protein Marketing Sustainability
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