Cattle are cheap and ranchers are struggling, but the price of your steak hasn’t changed.
Cattle prices are extremely low right now, and ranchers across the country are struggling to feed their herds and their families. But you probably haven’t noticed a commensurate drop in the price of you beef at the market, have you.
Hands in the cookie jar.
In the conventional beef supply chain, there are generally five entities that need to be paid in order for beef to get from a rancher’s pasture to your plate:
1) Rancher / Farmer
3) Packing Plant (i.e. Tyson, Cargill, JBS, National)
4) Distributor (i.e. Sysco)
5) Retailer / Grocery Store
The rancher is paid by the feedlot, the feedlot is paid by the packing plant, the packing plant by the distributor, the distributor by the retailer, and the retailer by you. Everyone is trying to make a little money, but often times, someone loses.
In Good Times…
In 2014 and early 2015, cattle ranchers and feedlots were making money hand over fist; drought, trade, and demand all played a role in the lowest cattle supply since the 1950s. Supply was low, demand was fairly constant, and the packing plants could either pay out the nose, or shut off the lights.
Most, if not all, chose to pay out the nose.
…And In Bad Times
Cattle markets are naturally cyclical; highs never last, but neither do lows. The bull market (ha!) lasted until November of 2015. The cattle supply had recovered, and the markets were flooded with beef. Today, ranchers and feedlots are cringing as they sell their cattle for as much as 41% less per head to the next step in the supply chain.
Here’s where it gets a little funny.
So, cattle are really cheap right now. But you probably haven’t noticed a commensurate decrease in the price of beef at your local supermarket. Sure, ground beef has dropped a few cents, but for the most part, the savings that the packing plants are garnering have not been passed along to you, the end user.
And here’s what’s happening instead:
Instead, the packing plants are making a little — and in some cases, a lot — more, the distributor’s margins are higher, and the retailer knows that you will continue to pay the prices you are used to paying, so they keep the savings back for themselves.
Low cattle prices don’t trickle up to the end user, and likewise, if America’s beef-eaters are willing to pay more per pound at the supermarket, that doesn’t trickle down to the rancher.
Of course, this also is true when the markets are flipped — high cattle prices aren’t proportionately reflected as high prices at the meat counter. In either case, there is a disconnect.
Do you know where your beef is raised?
The conventional beef supply chain has been able to achieve extreme efficiency; it has allowed America to become a world-leader in beef production, and is what helps to keep the lights on at thousands of family farms and ranches across the country.
That same efficiency that was prioritized when large packing plants were built in the late 1900s was what also trumped any hope for transparency in our beef. We are in an age when the beef we get in our supermarkets could have come from any one of the United States’ trade partners: Argentina, Brazil, Australia, Canada, and Japan. Besides a handful of marketing programs and label claims, we don’t know where or how our beef is raised.
With strange health phenomenons happening all around us, never has it been more important to know as much as possible about what we are putting into our bodies and how it affects our earth.
Beef for the better.
I’m the daughter of a Nebraska cattle rancher. For decades, my family’s livelihood has depended on the soft suckle of a baby calf eating for the first time, a panorama of endless green hills peppered with little black dots in the summertime, and the slow rising of condensation over a herd of expectant mamas waiting to be fed on a winter morning.
The world is changing, our earth is in danger, and collectively, we’re looking for a better path forward. If my family and thousands like us are to keep providing protein in the most wholesome way we know how, something has to change.
I started Honest Beef Company to be one avenue of innovation in an industry that is so antiquated it feels as if there is no other way forward. Despite this, Americans deserve to know how and where their food is produced, and likewise, ranchers deserve to know who they are feeding. Ultimately, both growers and eaters should be able to be able to feel great about the food they feed their families.
Here’s how it works.
Honest Beef’s mission is to identify America’s best cattle producers, employ small, craft butchers to dry-age their beef, and deliver it to our customers with half the carbon emissions and twice the transparency.
Every single Honest Beef cut can be traced back not only to the ranch of origin, but the animal from which it came. I am a nerd about this, but one of my favorite parts about Honest Beef is that our customers can look up the pedigree of their steak if they so choose. We also perform an ultrasound (the same technology used on expectant mothers) on our 100% Angus critters to identify which ones are most likely to be prime, assuring that the quality is second-to-none.
In addition to product transparency, the prices our customers pay are reflective of what we have actually paid for the cattle. We try to keep our margins consistent, and will not short our customers if the markets are down.
Black cattle, red meat and a green product.
We have eliminated over 60% of the conventional supply chain, meaning that emissions normally produced from the following sequence in the conventional beef supply chain:
Packing Plant → Distributor (i.e. Sysco) → Retailer → You
are reduced to this in ours:
Hastings, Nebraska (Site of Honest Beef’s Butcher & Logistics) → You
Styrofoam has been axed from our vocabulary, and we instead ship our beef in 100% recyclable insulators that are made right here in Nebraska out of old blue jeans.
Giving from our bounty.
The economics of growing up in rural Nebraska are volatile; job diversity is low, access to education is scarce, and the weather plays an enormous role in profitability. In fact, 1 out of every 4 children in rural America is food insecure, not knowing the source of their next meal.
Honest Beef Bounty strives to provide higher access to the least accessible of the three macro-nutrients: protein. For every share purchased on our site, we donate one serving of our dry-aged ground beef to a family affected by rural poverty in our home state of Nebraska.
In 2017, to know your rancher is empowering, delicious, and more essential than ever.