Some Alternative Marketing Strategies for Beef Producers


September 30, 2004 - William A Knudson


In many respects the beef market is in a good position. Prices are relatively high and demand is strong. However, despite positive market fundamentals, beef producers in Michigan face serious difficulties. Access to slaughter facilities is constrained compared to other parts of the country. The fact that Michigan is comprised of two peninsulas increases transportation costs relative to other locations. As a result of these and other conditions there has been some interest expressed in alternative marketing strategies for cattle producers.

One aspect of developing an effective marketing strategy is determining what, if any, value added activities a cattle producer or group of cattle producers can undertake. Given the geographic location and the size of producers in the Michigan, competing on a cost basis will be difficult, if not impossible. A marketing strategy that focuses on providing product attributes that buyers will be willing to pay a premium for has more potential. In order to successfully carry out an effective marketing strategy, it is likely that the management practices of producers will have to change.

This paper provides a market analysis for smaller scale beef producers, particularly producers that may be interested in forming a cooperative or other type of marketing arrangement. This paper will look at several aspects of the beef market. It will analyze the current state of the beef industry. It will also analyze the consumer tastes and preferences, including those product attributes that consumers may be willing to pay a premium for. The state of the processing market will be discussed including the market for branded beef sold at the retail level. Another issue that will be analyzed is the profit potential for retained ownership of cattle. This includes finding a market for cattle and a 3 firm willing to process cattle. Finally, the potential for profitably selling cattle on a grid will be analyzed; this includes the effective timing of selling cattle.


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