To really market, you need the right processor

By Tom and Susan Wrchota, Omro, Wisconsin — If you want to sell a few head of grain-fed beef in sides and quarters, you shouldn’t have much trouble finding a processor who can do the job for you. But if you want to target a high-end niche market for grass-finished beef in an effort to produce the margins required to make a living from a small-scale enterprise, you need a processor who is up to the task.

In the nearly 15 years that we’ve been marketing grass-finished meat, our business has evolved to meet both customers’ needs, and ours. Staying small and simple wasn’t going to cut it if we wanted to make a full-time living selling grass-finished beef and other farm products, so we had to grow and become more complex.

So did our meat processor. We’ve had two of them over the past 15 years, and our relationships with both have been very good. Based on our conversations with other meat marketers, we’ve been very fortunate.

Our first processor served our needs of the time. We started by marketing about six beeves per year, selling all of the meat in 25-pound packages wrapped in butcher paper. Our processor was willing to work with us in using the protocols we had developed in working with Dennis Buege, a meat scientist at the University of Wisconsin-Madison.

Our cattle were butchered near the end of the day so that the coolers were warmer. The sides were hung between others for greater insulation, and positioned so the breeze from the cooler fans would not strike directly. All of this aimed to limit the potential for cold shortening during dry aging of the meat from our Galloway cattle, which have less insulating backfat than most cattle breeds.

As the years advanced, our needs started to change. Our volume increased, and there wasn’t cooler space to warehouse our products for an extended period of time. Our customers wanted clear plastic packaging and, while our processor made the switch to clear wrap, it wasn’t vacuum packed. The packaging often developed pinholes and would not hold up to more than a few months in the freezer. This didn’t work for a high-quality, seasonal product harvested directly off grass.

Our customers wanted more individual cuts, and the state meat inspector wanted better labeling. Our processor could provide only his label — not the farm-specific label we wanted. We would have had to have the labels made for each product, and pay the plant to affix them. The costs would have been extremely high.

All of this added up to a big bottleneck, and our business growth was nearing a standstill.

At that time, Terry Beck drove into our farmyard and said he wanted to talk with us about using his small processing plant 25 miles away. This young man had started cutting while still in high school, and was eager to build his own processing business. An entrepreneur, he had a vision that included working with direct meat marketers. He had purchased a small plant in 1993 after working his off days at this facility for a few months to learn the operation and where future improvements could be made. He seemed to be “in tune” with our needs.

We moved slowly, trying him out for most of a year by sending a few butcher cows (mostly for hamburger sales) to his plant. During this period we had frequent communications about his needs and capabilities along with ours, all the while reviewing his plant’s work with our branded meats. It didn’t take long to realize that Terry was our guy, so we moved our business to his plant.

We agree with Terry that communication is key to working with a processor in our kind of business. We have found Terry to be very helpful in suggesting new products to meet changes in customer demand. For instance, at one point we were seeing a decline in our porterhouse and sirloin steak sales. Terry suggested we instead do only top sirloin with tenderloin and New York strip, and make up the lost dollars by using the sirloin trimmings for stir fry and kabob meat.

He knows the current prices for meats of different qualities, such as finished beef animals vs. dairy, and his advice has been valuable in helping us determine our own prices.

When a new farmer wanting to sell halves and quarters comes in, he likes to take the time to go through the services he can offer, and he asks about the farmer’s expectations. He explains the cuts, which ones are the most popular in the retail area, and how the farmer might want animals processed and meats packaged. Later, he makes up a sample farm label that meets regulatory requirements.

Through working with Terry, we’ve learned what separates a good processor from the average guy. After we came on board, one of Terry’s first major moves was to purchase new equipment to increase efficiencies and product control. If you’re looking for a processor, find out about the newest equipment in the plant, how it can benefit you, and any purchasing plans for the future. Such labor saving and quality control investments will benefit you in product development, packaging, and future costs.

Also, make sure to ask your prospective processor about employees and labor issues. Ask if they need to lay off people during the year, the experience levels of the cutters, and who you will be working with at the plant.

The only real quality control problems we’ve suffered were cuts that were uneven during a time when Terry was bringing on new employees. Few problems occur now that he has a crew that has been at the plant for a number of years. Terry pays well, treats his employees with respect, and offers health insurance and retirement benefits.

How does the processor view direct marketers, what types of enterprises do they have, and where do they want to take their business? Our processor has multiple product streams from his plant, including processing, packaging, and labeling services for about 25 direct meat marketers. This allows him to ride the economic ups and downs and keep key employees year-round.

A good processor like Terry works to overcome the challenges of direct marketers while maintaining high quality standards. When it comes to processed meats, he has had his recipes approved by the inspectors for multiple livestock meat types so that he doesn’t have to go back for individual approvals. He refuses to eliminate additives such as nitrates because he has not found any recipes that meet his taste requirements. Terry will not produce a processed product until a recipe meets his quality standards. He traveled to a seminar, and came back with ideas for improving his business by providing more services to direct marketers.

We asked Terry what makes direct marketers successful. His answer: “They know all of their costs, and are out there marketing the product.” Too many people are not getting enough money for their meat, he says. “They don’t have a clear idea of the costs going into the animal, things like the value of the grass and the hay,” along with items such as electricity, fuel, and health care, Terry explains. He says that too many people are selling hamburger below cull cow values.

All of this requires work and talent, and such attributes can be in short supply. Many meat marketers simply want to sell sides and quarters, and be done with it.

We can’t view it that way — at least not where we live (east central Wisconsin), and not if we want to continue making our living from direct marketing.

It may be possible to do a large volume of business in quarters or big packages if you live near a large metropolitan area. We live near a small metro area, and our fairly limited pool of potential buyers doesn’t have large storage freezers. Our buyers prefer specific cuts, and supplying these cuts is how we gain the margins we need to make a living from our business.

We know it can be difficult to find a processor like ours, because we’ve heard the complaints. One idea: Ask the meat science department at the state university if they are aware of anyone who might fit your needs.

This is worth some effort, because a processor can make or break a serious direct marketing enterprise.

Tom and Susan Wrchota graze cattle and direct-market beef and other products from their farm near Omro, Wisconsin.