Beef producers need to band together, consultant says

A British food consultant says beef producers have two marketing choices in the future.
They can either ship a load of beef at whatever price they can get, said David Hughes of Imperial College in London, or they can become part of an organization creating value for consumers and having some muscle in the market place.
"Most farmers think of themselves as big independent operators, I know," he told a beef marketing conference in Moose Jaw Thursday.
"Dream on."
The retail food industry is dominated by big players such as Tesco in the United Kingdom or Loblaw in Canada.
Meat buyers for these chains will be looking for the lowest prices, he said.
Farm marketing groups need "someone big . . . who can stand eye to eye with these buyers and say, No," Hughes said.
That kind of market muscle comes only from large organizations with power, he said. "Individuals can't do it."
But the food retailers need consistent quality in volume to ensure food stocks and avoid price volatility, he said.
Opportunities are numerous to establish relationships with retailers based on unique products with premium prices, Hughes said.
The premium products can focus on natural production methods, health benefits, feel-good buyer experiences, or just telling the story of the farm it came from, he said.
Retail experience by Tesco, the U.K.'s dominant food retailer, indicates about one-quarter of beef consumers are willing to pay more for better food.
"Twenty per cent of the consumers in any food market are willing to pay more money if they get more value from it," said Hughes.
Cheap prices are still important, but not to all consumers.
Organic food consumers, for example, are motivated by health, food safety, the environment, feeling better by buying these products and taste, he said.
"There is a thought that organic food simply tastes better than other food."
Hughes dislikes the term niche market. "Niche market tells you it is too small to be important."
Tesco's U.K. organic beef market is 3.5 per cent of the total.
"Three point five per cent. That sounds small but that's out of 61 million people."
He said speciality markets for beef in Canada "are there if you tailor the product to the consumer."
Building a specialty market takes time, he said, noting that two successful groups in berries and lamb meat took 14 and 25 years to build.
The berry group, KG Fruits in England, found members stuck it out because they shared trust, honesty, openness and a passion for the business.
Once KG Fruits took off, the company moved from 10 per cent of the U.K. market to 70 per cent over 13 years.
He agreed with a delegate that marketing associations, for varied reasons, often fail before achieving success.

Ron Walter can be reached at 691-1264.


Rancher speaks about grass-fed beef business
Beechy rancher Ted Perrin remembers the days when not all beef was grain fed in feedlots, but came straight off the grass to the processor.
Grain-fed beef came to market sooner than two- and three-year-old grass-fed beef, Perrin told a beef marketing conference in Moose Jaw Thursday.
The rush to market reduced the level of healthy Omega 3 fats and Conjugated Linoelic Acid (CLA) in the grain-fed beef, he said.
Research has shown health benefits from beef with higher levels of Omega 3 and CLA, he said.
And the grass-fed meat tastes different, he said.
Perrin has sold grass-fed only yearling heifers for years.
Two upscale Saskatoon restaurants buy his grass-fed beef, and tell him their customers like the taste and the local origin.
Between 2001 and 2006 he was paid $1.50 a pound live weight with $1.70 in 2007.
Boxes of beef cuts he sells to consumers fetch $3.33 a pound, he said.
- Walter