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Bulletin #1048, Selling Beef in Maine

Selling Beef in Maine

By Donna Coffin, Extension Livestock Professor, University of Maine Cooperative Extension

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With more than a million acres of farmland and adequate water, Maine can provide feed to a growing number of cow-calf, stocker, backgrounder, and finisher beef operations. Cattle can efficiently turn forage crops into a high quality protein for Maine people and for consumers throughout New England.

Experience of operators, availability of resources, and the market potential can all impact the success of a beef operation. Many beef producers utilize a number of marketing channels to even out farm cash flow as well as match the forage production on the farm. How to market their product is as important as how to produce it for the Maine beef producer.

Market Channel considers all the different ways you can sell your product. It’s more than just retail and wholesale. It involves the movement of beef from where it is produced to where it will be consumed, and includes transportation, processing, storage, distribution, and transfer of ownership.

A beef producer can sell the live animal at the auction. That is one way, one channel. Or they could sell to a group of folks as a side or quarter. That is another channel. Farms usually use multiple “channels” to market their products. A beef producer may sell cuts of meat at a farmers’ market, sides to families, and live animals at an auction.

Another way to look at it is you have different ways your groceries get to you. You can go to a big box store, a smaller family owned store, the corner market, farmers market, or farm stand. You have different channels to access your groceries.

The table below describes the risks, market needs, associated costs, and relative price of a variety of retail and wholesale market channels. For example, a cow-calf producer may sell some of their calves at auction as well as retain some to finish. Finished animals may be sold to friends and neighbors through freezer trade agreements, while cuts of meat may also be sold through meat CSAs (Community Supported Agriculture) or at the farm.

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Risks, Benefits, and Requirements of Beef Marketing Channels

  Auction Live Animal Broker / Aggregator Freezer Trade Meat Distributor Grocery / Wholesale Restaurants Farmers’ Market CSA Farm Stand Internet Sales
Risks Consistent option May have production criteria to meet. Upfront customer commitment Distributors call the shots. Inconsistent orders, buyer back-out. Inconsistent orders, buyer back-out. Unpaid debts, buyer back-out. Can be slow to pay. Low customer turnout, price competitive, leftover unsold product Farmer commitment up-front, customers share risk Low customer turn-out. Left over, unsold product. High development and logistics costs with unknown sales
Prices & Profit Price is low. Price is medium to low. Price is medium to low Price is medium: Producer is “price taker” Price is medium: Producer is “price taker” Price is medium: Producer is “price taker” Prices vary. Can be highest among channels. Labor costs relatively high. Price similar to wholesale, however, profit is generally higher. Prices vary, but high profit potential. Location is a big factor in price. High price but high customer expectations for quality.
Volume High High Variable (medium to high) depending on location & customer base High High to variable Variable, usually small Varies with market. Low to medium Medium to low depending on customer base Medium to low: location and competition dependent. Low to Medium depending on marketing proficiency
Level of Marketing Management Low Low: relatively quick and easy for volume sold. Must meet criteria Low to medium: some customer interaction to schedule harvest and cut-sheet. Low: relatively quick and easy for volume sold. Must meet criteria Low to medium: relatively quick and easy for volume sold. Must meet criteria Variable: high level of service for volume sold High: Many hours dedicated to selling. Most markets run 3 – 5 hours/day High: Must sell memberships & facilitate weekly share pick-ups. Variable: Ranges from unstaffed honor system to staffed stores High: Need a web presence, online ordering capability.
Associated Costs Animal transportation only Animal transportation only Animal transportation and maybe delivery costs Animal transportation Storage, delivery and unsold inventory costs Storage, delivery and unsold inventory costs Storage, delivery and unsold inventory costs Storage and delivery. Storage and unsold inventory costs Storage, shipping and unsold inventory costs
Farmer Stress Low Low to Medium depending on advance commitment Low to medium: Must meet customer expectations for repeat sales High: Must meet product criteria. Medium to high. Must have product available. High. Must have high quality product available. Low: “Show up or don’t show up.” Low to medium: Must meet customer expectations weekly. Variable depending on overhead & scale Variable. Hard to match timing of consumer demand with available product.
License Needed None for farmer None for farmer None for farmer None for farmer Wholesale Food Sales License Wholesale Food Sales License Retail Food Sales License & Mobile Vendors License Retail Food Sales License Retail Food Sales License Retail Food Sales License

Adapted with permission from LeRoux, M. Guide to Market Channel Selection: How to Sell through Wholesale and Retail Outlets., July 2011.

List of Resources

Reviewed by Henrietta E. Beaufait, DVM, Maine Meat and Poultry Inspection, Program Manager, Maine Department of Agriculture, Conservation and Forestry, Division of Quality Assurance and Regulations, and Dave Ordway, Feeder Calf Sale Secretary, Maine Beef Producers Association.

Information in this publication is provided purely for educational purposes. No responsibility is assumed for any problems associated with the use of products or services mentioned. No endorsement of products or companies is intended, nor is criticism of unnamed products or companies implied.

© 2015

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Cooperative Extension Publications
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