Pre-Harvest Implications
of Growing Social Interest
in How Meat is Produced
in the U.S.
• There is growing US and
global public interest in
when, where, how and by
whom animals that ultimately
yield or generate meat,
poultry, eggs and/or milk are
raised and sustained during
their productive lives.
G AR Y SM ITH , PH .D . , TEXAS A&M
U N IVER SITY AN D C O LO R AD O
S TA TE U N IV E R S ITY
68th RECIPROCAL MEAT CONFERENCE
• For hundreds of years, almost no one—other than those
who domesticated and, since then, supervised them—
thought much about how such animals were cared for and
managed.
• Most folks were just grateful to have such things to eat.
• Such is no longer the case.
Anthropomorphism
• Partially because the entertainment industry humanized almost
every animal since the dinosaur, we now have individuals from
four full generations of Americans who believe that father mouse
talks to mother mouse about which college their offspring should
attend.
• Historically, farmers/ranchers raised or produced whichever meatanimals they had, under whatever circumstances they could
control, and sold them to largely non-discriminating buyers.
ex. “Clarabelle the Cow”
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• About 125 years ago, the markets—responding to consumer
desires—began to differentiate among kinds/classes/grades of
animals and animal products, predominantly based on differences
in age, weight, gender, fatness and/or other quality attributes.
• That worked for about a half-century, and then there developed a
much more sophisticated value-based marketing scheme.
• Mick Colvin and Mel Coleman pioneered concepts of breed and
position-in-Grade and raising-conditions as bases for
differentiated marketing of beef.
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Story Beef -- Value Propositions
• I'm going to tell you a story about my beef.
• My story consists of a number of value
propositions (elements that I think are
important to you).
• Because I do some special things, I must
recover special costs of production.
Value
Propositions
Value Propositions can involve quality,
palatability, production practices, and real or
perceived safety.
SOURCE: Gary C. Smith (Colorado State University) March 2006.
Non-Conventional Beef Brands -- “Story” Beef
• Coleman Natural, Laura’s Lean, Harris Ranch
Natural, Maverick Natural•Lite and Bradley 3
Ranch Natural brands of beef demonstrated
that there are consumers who are no longer
just interested in taste.
• A cascade of non-conventional beef brands
has followed -- all based on the concept of
“story beef” in which the cattle are specially
raised.
• Included are brands of “Natural,” “Grass-Fed”
and “Organic” beef.
SOURCE: Gary C. Smith (2007 TAMU Beef Cattle Short Course).
What Consumers Want From Food Makers
What Consumers Desire
From Beef
1984
Taste
Convenience
Nutrition
Variety
Price
2009
Those plus social causes, i.e.
The Environment
Sustainability
Animal Welfare
• Control (source and story)
• Choices (healthy alternatives)
• Value (affordable options/attainable luxuries)
• Clean (the new “green”) Labels
• Information About Where Their Food Comes From
• Knowledge of How This Food Was Made
SOURCE: John Lundeen (Consumer Beef Index Survey) July 2009.
SOURCE: Rita Jane Gabbert, meatingplace, January 28, 2015 quoting Lynn Dornblaser, director of innovation and
insight at Mintel.
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“Fresh” and “Healthy” are emerging food industry buzz words.
Americans want their food to be “natural” and certainly not
“genetically improved”.
• Food providers need to continually reimagine, reinvent and
reallocate resources to align their offerings with changing needs
of consumers.
They’re not much interested in 12 other “better for you” label claims:
• reduced fat
• light
• caffeine-free
• reduced
cholesterol
• diet
• low-carb
• fortified
• low-calorie
• organic
• sugar-free
• reduced sodium
• The winning products of 2025 will include not only those that can
legitimately be labeled as “natural” or “local,” but also those with
“clean labels,” fewer ingredients, less processing and a favorable
carbon footprint.
• whole-grain
SOURCE: Technomic Inc. (May 20, 2015)
SOURCE: Prepared Foods (2015); Food Processing (2015)
Issues Of Concern To Consumer—Credence Attributes
• How animals are cared for and handled.
• How a product’s production impacts the environment.
• How a product’s production impacts societies.
• The products used in the production of food items
(e.g., hormones, antibiotics, GMOs, pesticides, fertilizer, etc.)
SOURCE: Where Food Comes From®, February 8, 2015
Of these Issues:
• which will remain of interest only to those who can afford
such discernment?
• which will become widespread and mainstream?
• which ones will producers and processors ignore at their
peril?
SOURCE: Rita Jane Gabbert, meatingplace, February 2015
These are Issues currently important to consumers:
• local
• natural
• organic
• grass-fed
• antibiotic-free
• raised without
outdoor access
• hormone-free
• sustainable
• raised without
sufficient space per
animal
• humanely
slaughtered
SOURCE: Rita Jane Gabbert, meatingplace, February 2015
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Will Shoppers Pay More For Branded Meat?
• Now, producers must make decisions regarding which, if any, of
currently prevalent desires among potential customers/consumers
is a whim, a fad or a likely-to-continue trend—plus, how much of
such a product should be offered.
 Research conducted by Midan Marketing
(Chicago, IL) and Shugoll Research (Bethesda,
MD) reveals that:
• 84% of supermarket shoppers are
willing to pay up to 5% more for
branded meat.
• 55% are okay with paying 20%
more.
• Conclusion – brand matters.
SOURCE: Meat & Poultry (March 2008).
Do we take this literally?
• 86% of consumers indicated that antibiotic-free meat
should be available in their local supermarket.
Did they “game” the system?
• 72% “Extremely” or “Very” Concerned about overuse of antibiotics
in animal feed, including the potential to create antibiotic-resistant
“superbugs”.
• 60% Concerned with overuse of antibiotics in animal feed on
farms raising animals in crowded conditions.
SOURCE: Consumers Union (August 2012).
SOURCE: Consumers Union (August 2012).
Should we believe results of “will-pays”?
• 60% said they’d be willing to pay at least 5 cents per pound more
for antibiotic-free meat.
• Southwest Airlines passengers consistently praise the company
for serving good food on its flights—but, in fact, the airline doesn’t
serve any food at all.
• 37% said they’d be willing to pay 1 dollar or more per pound for
antibiotic-free meat.
• Research into the accuracy of self-reported data reveals:
• the fallibility of memory
• the tendency to exaggerate good behavior
• the tendency to under-report bad behavior
SOURCE: Bopp (2015) citing David Allison, Nutrition Obesity Research Center, University
of Alabama-Birmingham, International Journal of Obesity (February 2015)
SOURCE: Consumers Union (August 2012).
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I do not believe that all producers should change their
production practices in response to real vs. perceived
beliefs/concerns of “experts”, customers or consumers.
Although I believe that all meat, poultry, egg and milk producers
should follow “best practices” for care/handling of farm animals…
I do not believe they all must qualify for the “American Humane
Certified” designation, or any other animal welfare certification
program that would increase the price of the product at retail.
Price/Pound; Kroger Supermarket (College Station TX) February 2015
Ground Beef
NY Strip
Ribeye
$10.49
$11.49
Kroger
90% lean
$6.39
Nolan Ryan’sa
90% lean
6.39
11.49
12.49
Laura’s Leanb
92% lean
6.99
13.99
14.99
Laura’s Leanb
17.99
96% lean
7.29
G-Fc
85% lean
6.99
18.99
NR Grass-Fedd
85% lean
7.99
20.99
Organic &
aAll
Natural
bNever
Ever 3
cUruguayan
• Not all, because meat that is “prescriptively produced” costs
more, and not everyone can afford to pay a premium for it.
• And, we can’t remove all of the technologies because the supply
will decrease, the price will increase, and we won’t be able to help
feed a hungry world.
17.99
dDomestic
Cost Of Beef Production
Without Use Of Modern Technology
• Cow/Calf Sector  Removal of growth-promotant implants,
dewormers and fly control would increase the breakeven price
47%, a value of $274/calf.
Estimates Of Cost To Produce
“Kinds” Of Harvest Cattle
Natural (withdrawal program)
$60 / head
• Stocking Sector  Removal of growth-promotant implants,
ionophores, antimicrobial therapy, dewormers and fly control
would increase the breakeven price 13%, a value of $95/head.
Never Ever 3
$ 110 to 190 / head
• Feedlot Sector  Removal of growth-promotant implants,
ionophores, antimicrobial therapy, beta-agonists and dewormers
would increase the breakeven price 13%, a value of $155/head.
Organic
$ 130 to 260 / head
Grass-Fed Organic
$ 230 to 300 / head
SOURCE: John Lawrence (Iowa State University) September 2009.
SOURCES: Five Rivers Feedlots (2006); Charlie Bradbury (2006); Roy Moore (2007); Mike Smith (2008);
Larry Corah (2009); Derrell Peel (2009).
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• I believe that industry should produce some of each
commodity that qualifies to be labeled as Natural,
Organic, Grass-Fed, Free-Range, Heritage, Humanely
Handled, et cetera; but, not all, because we need to
allow the marketplace to ration the supply.
• I support the concept of advising industry to “make
available to the public, a small supply of any kind of
meat the public demands, and track/trend it to see if you
need to increase the supply.”
Kinds of US Steer/Heifer Beef Marketed in the USA
• I was in a meeting with folks from Certified Angus Beef
on November 12, 2014.
• A question was asked—“Is the market for Natural CAB
increasing?”
• Mark McCully replied, “We sold 6 million pounds of it our
first year; more than ten years later, we still sell 6 million
pounds per year.”
2004-2007
2014
Conventional
91%
93.72%
Natural
8%
4.62%
Never Ever
1%
1.15%
NHTC Beef
<0.1%
0.40%
Grass-Fed
<0.1%
0.07%
Organic
<0.1%
0.06%
SOURCE: G.C. Smith (2008); Randy Blach (2015)
SOURCE: Consumers Union (August 2012).
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