August 30, 2005
'Value-added' beef gaining hoofhold in cattle industry
WEST LAFAYETTE, Ind. - A package of beef is a package of beef, right? Not to many consumers. Not anymore.
"The consumer is more and more concerned about where their food comes from," said Ron Lemenager, Purdue University Extension beef specialist.
"Some consumers are concerned about environmental stewardship. Some are concerned about animal well-being. Some are concerned about the specific cattle breeds that may be involved. And some just want a good, safe, wholesome product that is tender, juicy and flavorful."
As consumer demands become more segmented, cattle producers face changes in how they raise and market their animals. With the changes, however, come opportunities to increase profits by up to $200 or more per head, Lemenager said.
"Value-added" beef products that command premium prices for their higher quality or specialized production practices are gaining momentum within the cattle industry. Indiana beef producers interested in value-added markets can participate in three programs developed by Purdue and the Indiana Beef Cattle Association: Indiana Farm Fresh Beef, Heartland Premium Aged Beef and calf preconditioning.
The Indiana Farm Fresh Beef program is less than a year old but already has trained and certified more than 100 cattle producers in value-added practices, Lemenager said.
"Indiana Farm Fresh Beef is really a certified freezer beef program, where producers market directly to consumers," Lemenager said. "The consumer knows exactly where the product comes from, so there's a level of trust because of the relationship between the producer and the consumer."
The certification program covers all aspects of value-added production, Lemenager said.
"The producer goes through training and certification in areas like beef quality assurance, animal health, genetics, recordkeeping, environmental stewardship - those types of things," he said. "They do so in order to produce the kind of product that would be of interest to a given consumer."
Indiana Farm Fresh Beef has a Web site that provides news and information to certified producers and consumers. The consumer page also contains a directory of certified producers that sell directly to the public.
Heartland Premium Aged Beef made its debut in late May. The limited liability corporation was established through the efforts of the Indiana Beef Ventures Group - a think tank made up of beef industry representatives. Lemenager is a member and adviser.
"The Beef Ventures Group came about because we were looking at value-added marketing opportunities," Lemenager said. "The group comes up with an idea, does a feasibility study and business plan, and takes it all the way to the point of launching a new business. The first business launched from that group is Heartland Premium Aged Beef."
Producer members of the group were offered an opportunity to purchase shares in the business, Lemenager said.
"The new meat business will start small, with the idea that the cattle will have virtually all of the same requirements as the Indiana Farm Fresh Beef program, but will go into food service and retail," he said.
"Heartland Premium Aged Beef is basically a co-op, where producers share in the profits of the animal processing side of the business. The shareholders in the business are going to be the ones who capitalize on the value-added portion, from harvest to distribution and consumption."
Cattle producers who do not own Heartland shares can supply the business calves to be fed, Lemenager said.
"The marketplace will take care of the premiums there, because there's going to be a demand for certain kinds of cattle that are source-verified."
The preconditioning program offers cattle producers a way to add value to calves in traditional marketing systems, such as live auctions. In the preconditioning process, calves are weaned, started on feed, given vaccinations to prevent respiratory disease and raised in other ways to ensure high carcass quality.
Preconditioning should improve producer profits by not only increasing sale weights but also by providing information and documentation on cattle that might make them more attractive to feedlots that supply beef to export markets, such as Japan, Lemenager said.
Japan is among a handful of nations that continue to ban United States beef since a case of bovine spongiform encephalopathy - commonly known as mad cow disease - was confirmed in Washington state in December 2003.
"The documentation and source verification aspects of the preconditioning program have the potential to really help as export markets begin to open back up," Lemenager said.
Writer: Steve Leer, (765) 494-8415, email@example.com
Source: Ron Lemenager, (765) 494-4817, firstname.lastname@example.org
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