A new USDA report suggests consumers are trending toward grass-fed beef even though it remains a niche product at the present time. And if there is to be substantial growth in grass-fed's market share, USDA noted there are significant obstacles to overcome.
In the monthly "Dairy, Livestock and Poultry Outlook," USDA-ERS said "the decision to pursue grass-finished production could begin to necessitate a number of tradeoffs" that will, in fact, take the beef industry in the direction of "higher cost of production and reduced beef supplies. For example, it could become necessary to liquidate some cows to make room for grass-finishing programs, reallocate cropland to provide the necessary high-quality forages, and vary selection programs to tailor cattle genetics amenable to alternative beef production technologies."
The report also notes that "Already, providing locally sourced beef is straining slaughter capacity – e.g., supplies – in some local areas. Generally, because they lack the means to do so, local meat processors are less likely to salvage the full array of byproduct values than larger packers, thus reducing supplies of intermediate inputs to a number of industries such as pharmaceuticals, cosmetics, and lubricants. Because byproducts contribute significantly to packers' profit margins, this also makes it necessary for small processors to bid less for market-ready cattle."
ERS concluded the report by saying, "As in most cases, consumers drive production decisions, and as consumer preferences continue to shift toward products from more forage-based beef production systems, solutions will need be found to many actual or anticipated short-term constraints on producing the desired final beef products."
The full report is on pages 4-7 of the document available at http://usda.mannlib.cornell.edu/usda/current/LDP-M/LDP-M-06-18-2010.pdf.
Source: USDA, Texas Cattle Feeders Association