Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Tuesday, March 07, 2006

Natural Meat Market Ripe for Farmers and Ranchers

Natural Meat Market Ripe for Farmers and Ranchers

Family farmers and ranchers have a competitive advantage in the fast-growing natural meat market – they have earned consumers’ trust

by Wyatt Fraas, Center for Rural Affairs, wyattf@cfra.org

Family farms have a ripe opportunity to capture a growing segment of the livestock market – the natural market – if they band together. But if they don’t act, that market will be lost to the corporate giants.

A new cooperative of Iowa, Nebraska, and South Dakota cattle and hog producers has formed to address the need and is looking for members.

The natural market is the fastest growing segment of the meat market. It ranges from hormone-free beef to pork raised on natural bedding. It offers premium prices and potentially much higher returns.

What makes the natural market most intriguing is that it offers smaller producers a competitive advantage with consumers over corporate farms. A nationwide Roper poll found that consumers trust small farms more than large industrial farms to produce safe food responsibly by a 2:1 margin.

This is a market based on trust. The families paying premiums for natural are doing so to get a product they trust. The farms that have their trust can win the opportunity to supply them.

Consumer trust in small family farms gives them an edge as suppliers of natural food companies. The natural food company that demonstrates that its meat comes from the small operations that consumers trust most will win consumers’ dollars. And mega farms won’t be able to take it away. They cannot offer that.

But to fully exploit that competitive advantage and capture the opportunity, family-size operations must band together to overcome a disadvantage. Natural food companies like to deal in volume. Like the rest of corporate America, they like suppliers that can provide them the volume they need when they need it. The mega producers can offer that. A family-size operation cannot offer it alone.

But an association of family farmers and ranchers jointly marketing could provide the volume and secure supply that natural meat companies need – along with a product that can win the trust of consumers.

Family operations do not have to make high-risk investments in building packing plants and brand names or battling for shelf space in supermarket chains. They simply need to band together to agree on standards, coordinate production, and negotiate price.

Producers must take the lead. Natural food companies won’t negotiate with family farms and ranches until they get together to offer sufficient volume to give them leverage.

The opportunity is ripe. But that which is ripe never lasts for long. The threat is illustrated by the rush of corporate farms to capture the organic milk market, setting off a critical debate over whether organic farming means corporate farming. It is time to act to protect natural livestock markets for family farms.

The new Family Farmers and Ranchers Meat (FFARM) cooperative was established for that very purpose and is open to producers in Iowa, Nebraska, and South Dakota. To learn more, contact Wyatt Fraas at the Center’s Hartington, Nebraska office, 402-254-6893 or by email at wyattf@cfra.org.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

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