Posted: Thursday, July 14, 2011 1:00 PM
Success requires careful consideration of hours invested in other duties
By DEAN REA
For the Capital Press
HALSEY, Ore. -- Livestock producers have sold meat to family members and friends for decades, but this method of niche marketing is becoming more popular and can be profitable, a marketing expert says.
Producers must make certain to follow federal and state rules to sell live animals under "custom-exempt" status, said Lauren Gwin, an Oregon State University research associate.
The niche food market is growing 10 percent a year, according to Gwin, a Niche Meat Processing Assistance Network coordinator who works with small processors to promote meat markets.
"Seventy percent of U.S. consumers want to know where their food comes from and would pay more for local food if they could find it," she said.
It is important to count the cost in resources and time before entering such niche marketing areas as organics, natural, grass-fed and locally grown products, Gwin said.
"If you get rid of the middleman, you have to do his job," she said. Producer should calculate the cost in hours in raising products and selling them though community-supported agriculture and Saturday markets, which may result in little or no "pure profit."
Bulk and bundle sales can be profitable to livestock producers, Gwin said. This is made possible throughout the United States if producers sell live animals to customers and then have their livestock slaughtered and processed at a "custom-exempt" state facility.
"This method minimizes inventory, management and transaction costs and keeps prices reasonable," Gwin told members of the livestock association.
Normally, no more than four customers purchase shares in an animal. Bundles of meat also may be packaged and sold.
The custom exemption applies primarily to beef, pork, goats and lambs, Gwin said during an interview. Gwin said she knows of ranchers who sell 60 animals a year by the whole, half and quarter. This is an economical method of niche marketing, because producers have no inventory problem and, after establishing a customer base, eliminate much of that expense.
Gwin said that interest in buying directly from a rancher has grown during the past decade and that "people in Portland are getting chest freezers and are buying animals."
"I think it could make you some money," she told the livestock group. "Figure out how to produce a quality product and make sure you have a good finishing system."
She recently spoke to Linn-Benton Livestock and Forages members.