Grass-Fed Beef Basics

As anyone who’s been in the grocery store in the last several years knows, consumers have made grass-fed beef a popular meat selection. Grass-fed beef now represents about 4% of retail and food service beef sales. South Dakota State University. https://extension.sdstate.edu/grass-fed-beef-market-share-grass-fed-beef. As a consequence, there are more grass-fed hamburgers, steaks, and roasts in grocer meat displays and on menus.

And this popularity has developed notwithstanding that grass-fed beef costs the consumer more to buy and the rancher more to produce. Renee Cheung, managing partner of Bonterra Partners in San Francisco coauthored a report with Paul McMahon, managing partner at SLM Partners titled “Back to Grass: the Market Potential for U.S. Grassfed Beef.” The report,  can be found online at www.stonebarnscenter.org/articles/from-pasture-to-plate.html.). That 2017 report concluded:

• Grass-fed beef has a 70 percent premium compared to conventional, antibiotic-free or organic beef.
• The supply chain for moving grass-fed beef from the ranch to the customer is much more expensive.
• Cost of production is much higher.
• Domestic producers face competition from imported grass-fed beef.

There is much to unpack in this highly regarded report, but for this article let’s focus on competition from imported grass-fed beef.

First, imported grass-fed beef does not have to meet a USDA definition for “grass fed,” as there is none. Second, 75% to 85% of grass-fed cattle come from foreign countries. So long as the carcass or primals are cut up in America, this foreign beef can carry the “Product of the USA” label. It seems very unlikely that consumers understand that this Product of the USA is really a product, for example, from Nicaragua.(https://www.pbs.org/newshour/show/in-nicaragua-supplying-beef-to-the-u-s-comes-at-a-high-human-cost Oct. 20, 2020).

The following countries provide grass-fed beef to American chop shops:Brazil, Canada,Mexico, New Zealand, Australia, Nicaragua, Uruguay, Argentina, Ireland, Finland,Costa Rica, the Netherlands, United Kingdom, Japan, France, Croatia,Lithuania, Spain, and Italy. (https://www.r-calfusa.com/label-our-beef/August 20, 2021).

Further, grass-fed beef raised in foreign countries may actually have a lower cost of gain (the amount of dollars necessary for the cow to gain one pound)than American cattle finished in feedlots. For example, in 2017, the average cost of one-pound of gain for American feedlot beef was $.765. https://www.asi.k-state.edu/about/newsletters/focus-on-feedlots/docs/fofdec2017.pdf (December 2017)while in 2017, the average cost of one pound of gain for Australian beef cattle was $.57 (https://www.bloomberg.com/news/articles/2019-05-23/most-grass-fed-beef-labeled-product-of-u-s-a-is-imported (May 23, 2019).

If you consider the premium of 70% that retail sellers of grass-fed beef receive to the standard price for feedlot beef (noted above), there is a powerful incentive for distributors and retailers to sell grass-fed beef that has nothing to do with nutrition or quality or the age of the cow, and everything to do with the failure of the USDA to define what “grass-fed” means or to properly label beef as truly a product of American ranchers, as opposed to American packing houses. The consequence of these two labeling failures is packers and retailers can buy cheap and sell high and neither price has anything to do with the contribution of American retailers or packing plants to the quality or quantity of true American beef.

Written by Dirk Adams