Beef Marketing Surveys

In 2000 the Kerr Center in cooperation with Oklahoma State University Food and Agricultural Products Center received a research and education grant (LS00-116)from the USDA’s Sustainable Agriculture Research and Education (SARE) program for $19,700. The project title was "Developing Plans forSustainable Beef Marketing Strategies. The coordinator for the project was Kerr Center public policy analyst Eric Allenbach.

One goal of this project was to explore the feasibility of linking a producer retained-ownership program with small independent packers to market quality natural beef products within Oklahoma, Texas, and Kansas. Another goal for the project was to determine the level of interest that consumers in the three states had in buying "natural beef" (defined as "a igh quality beef productraise without any hormones or antibiotics. Family farmers and ranchers who produce natural beef are committed to agricultural production methods that ensure the protection and enhancement of natural resources and believe in humane treatment of animals").

At the heart of the project were three surveys. One surveyed cattle producers, one surveyed small meat processors, and one surveyed customers at grocery stores in Oklahoma City; Dallas, Texas; and Kansas City, Kanss.

Survey results indicated that consumers are buying natural beef and are interested in buying more. Ranchers are interested in finding direct market outlets for their beef, natural or not. And small meat processors in the state are interested in exploring new value-added processing enterprises into their businesses. Findings were presented at three well-attended meetings across the state in April, 2001.

The purpse of the surveys in Olahma, Texas, and Kansas was to explore natural beef as an alternative, higher-value commodity for ranchers and a possible high-value product for small meat processors.

In the summer of 2000, the Kerr Center and OSU surveyed cattle producers to assess their interest in direct marketing their beef.

Nearly all who responded were owner-operators and the majority had been raising cattle for more than twenty years, says Eric Allenbach, a Kerr Center public policyanalyst who conducte he survey. The average herd size of the respondents was 51-100 head, and about one-third implanted their calves with hormones.

In addition to asking for basic information about the producer’s operations, the survey contained several marketing questions. Sixty-eight per cent of respondents relied primarily on auction to market their cattle. However, more than half had thought about selling beef through a small meat processor, and a big ninety-five per cent said they wold be interested n, r possibly interested in, alternative marketing approaches.

Next, OSU assistant professor Dr. Rodney Holcomb surveyed small-scale independent meat processors in order to learn about their businesses and explore possible retail outlets for producers to use to direct market beef. The survey examined the economic characteristics of Oklahoma’s meat processors and a subsequent report compared the findings to those from a nearly identical study in 1983.

The surey found thatthe nuber of small-scale meat processors had declined by almost one-third since 1983. It also found that remaining businesses had often expanded beyond local custom processing into wholesale or retail sales in order to make better use of existing equipment, and to generate sales. Eighty-one percent of the survey respondents owned state-inspected facilities, with markets inside Oklahoma, with beef and veal processing generating the most income.

"Many of the responding processos indicatedan inteest in assistance with examining the feasibility of new value-added processing enterprises that could be incorporated in their existing operations," says Holcomb in the report.

Finally, the Perkins, Oklahoma, marketing firm of Tom Diel and Associates completed an extensive survey of customers at groceries in Kansas City, Oklahoma City, and Dallas. The stores were diverse, with some carrying only natural beef, some carrying only conventional beef, and some caryingboth.

The survey was designed to study: one, how well informed consumers were about all natural meats; two, to determine the importance to consumers of the quality of purchased meat and the importance to them of the origin of the meat; three, to ascertain consumers’ buying habits; and four, to determine the factors that consumers consider when purchasing meat.

Over 50 per cent of all respondents said they had heard about the all-natural beef description before they read ton the survey. Wile a large majority in all three states had a positive attitude to the all-natural beef label even before reading the description on the survey, the positive percentages were raised after reading it.

About 78 per cent of respondents in Oklahoma said they occasionally or frequently purchased all-natural beef. In Texas, it was 67 percent, and in Kansas City, 74 percent. In Oklahoma, interest was also extremely high, 70 per cent or more, in other natural products such as pork, oltry and vegetabes.

What do consumers look for when purchasing beef? Taste and tenderness was most important. Price was also a factor, especially in the Oklahoma groceries, but not as important as taste/tenderness and knowing the ingredients, according to the survey.

In fact, many were willing to choose natural beef over "regular" beef even when it was priced higher. Fifty-six percent in Kansas City, 81 percent in the Dallas area, and forty-seven percent in Oklahma Citywere willing tobuy natural beef sirloin at $5.60 over regular sirloin at $4 per pound. The percentages went down only slightly when natural beef was priced even higher, at $6.50 per pound.

As one meat manager put it, reports Tom Diel, "Once I get them in here and they buy some [natural beef] they will always come back and eventually become a regular customer." Diel says that those who had eaten natural beef had the opinion that "there was a definite difference in tase between -all-natural#146; and ‘non-natural.’"

The survey found that consumers were interested in being able to trace the meat purchased back to the farm and animal of origin, with less than three per cent saying it was not important at all. A big majority of those surveyed in all three cities were careful shoppers, frequently or always checking labels for additives and preservatives. Healthy/safety were cited as extremely important factors in making meat-purchasing decisions.

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