Direct Marketing Beef Profile

Revised April 2012 by Gary Brester, professor, Department of Agricultural Economics, Montana State University, gbrester@montana.edu

Overview

Direct marketing refers to the sale of beef products directly from ranches/feedlots to consumers.  Direct marketing includes sales to grocery stores, restaurants, door-to-door, at farmers’ markets, and through Internet delivery.  Farmers’ markets continue to grow in the United States. According to the USDA, more than 6,132 farmers’ markets operated in 2010 which was a substantial increase from the 4,685 markets that operated in 2008.

Direct marketing of livestock products is not as common as direct marketing of fruits and vegetables because livestock products require a high degree of processing and are highly perishable.  However, direct marketing can provide price premiums for producers.  Direct marketing represents a niche marketing strategy for beef producers.  The niche involves consumers who are highly concerned about food safety, environmental impacts of food production, animal welfare, production practices and who support local agriculture.

Numerous firms offer beef products through Internet sales.  The majority of these sales involve frozen rather than fresh beef.  One advantage of frozen beef sales is that it allows for longer shelf life and mitigates some seasonality problems.  Beef that is transported across state lines must be processed in a federally-inspected plant.

The strategic approaches employed by direct marketing beef companies vary widely.  In addition to organic and natural beef products, some companies use specific genetics to produce lean beef products.  Other firms specialize in grass-fed beef while many produce highly marbled, tender beef products.

Sources

Farmers Markets, Agricultural Marketing Service, USDA.

Food CPI, Prices and Expenditures, Economic Research Service (ERS), USDA.

Food Marketing & Price Spreads, ERS, USDA.

 

Profile created March 2003 and revised April 2012. Links checked November 2013.