January / 2004


Beefy Business
by: Michele Day

With more than 1.1 million beef cows, Kentucky ranks as the eighth largest beef cattle state, with farmers using new marketing strategies to meet consumers’ expectations for high-quality beef

In terms of size, comparing the operations of Kentucky cattlemen John D. Stewart and David P. Givens is like putting a 1,500-pound bull next to an 80-pound calf.

Forget about size, and their business philosophy and marketing strategy for Kentucky’s beef is as similar as identical twin calves.

Stewart’s Creekstone Farms Premium Beef LLC processes about 285,000 cattle a year and expects sales to reach more than $350 million in 2003.

Creekstone, which started on a 1,200-acre ranch in Henry County in 1995, employs more than 650 people and operates a state-of-the-art processing plant in Kansas. Its customers include supermarket chains and high-end restaurants from New York to San Francisco to Tokyo.

In contrast, Givens, one of nine Kentucky farmers who own stock in the Green River Cattle Company, maintains a herd of about 40 cows on his own 100-acre farm in Greensburg. In the past two years, he and his partners have sent about 50 cattle to market under the Green River Cattle Company brand name.

Their customers, which include three restaurants, are all within the borders of the Bluegrass State.

Beef Marketing Strategies
Givens and Stewart are enthusiastic proponents of the trend toward branded beef products, where producers differentiate their meat from generic cuts on grocery store shelves and by the way they breed and manage their cattle.

Creekstone promotes its meat as premium black Angus beef from genetically superior cattle that are handled under humane conditions—cattle that lead low-stress lives and produce the highest quality meat, the company’s brochures explain.

“We’re going for a very high end of the market,” Stewart says. “We want a product that’s predictably more tender and more flavorful. Research tells us those are the attributes that consumers are most interested in.”

At the Creekstone farm near Campbellsburg in northern Kentucky, Joe Bill Meng, director of genetic development, oversees a program that tests bulls and cows for qualities such as muscling, marbling, and back fat.

“We gather every possible piece of information about the animals,” he says. “We actually have 18 different points we have scores for, to help us evaluate the animal. Then we mix and match the animals to the program. If an animal has a weakness, then we identify an animal that’s exceptional in that area so we can improve that quality for the next generation. It’s a very selected breeding process.”

In addition, all farmers who produce beef for Creekstone agree to abide by company policies on everything from weaning and vaccinations to feeding and handling.

“What we’re trying to do is take as many variables out of the process as possible,” Meng says. “The number-one consumer complaint in the beef industry is lack of uniformity or consistency in the end product. We want a uniformly, consistently high-quality product.”

Green River Cattle Company, which began operations in 2000, sets itself apart from generic beef in a different way: it markets beef that’s raised by hand on family farms in Kentucky.

Meat that carries the Green River Cattle Company brand comes from cattle that were born, raised, finished, and processed within the state. The company, which received $42,500 in start-up funds through the state agricultural development program, sells both the notion of preserving the cherished tradition of the small family farm—and the comforting idea that customers can know where their meat came from.

Green River uses identification tags that track the source of its meat.

“We can trace it back to the animal, all the way back to the farm origin,” Givens says. “And we can verify the process. How was it handled? What was it fed? Was it ever sick?”

Seeing cattle through from birth to harvest creates a special sense of ownership and pride for a farmer, he says.

“It’s so rewarding to sit down with a chef in a restaurant and hear them say how pleased they are with our product,” Givens says. “It’s almost the same feeling as an artist would have with a finished work of art or a dancer would have with a dance that’s well performed.”

Promoting Branded Beef
Studies have shown some consumers are willing to pay more for the branded products that cattle producers such as Creekstone and Green River offer, says Lee Meyer, Extension marketing specialist for the University of Kentucky.

Traditionally, beef has been a commodity or generic product.

“With commodities, whoever sells the generic product at the cheapest price wins,” Meyer says. “There’s continuing pressure to keep lowering prices, lowering prices. But if you differentiate your product, you step away from that level of competition. Then you’re competing on the basis of quality and service. That’s what Creekstone and Green River are trying to do.”

Other cattle producers around the state are trying their own forms of branding.

Perhaps best known is Laura’s Lean Beef, headquartered in Winchester, which promotes its steaks, roasts, and other cuts as healthy, environmentally friendly, and natural meat.

Another example is Colcord Farms in Paris, Kentucky, which produces cattle that are entirely grass-fed. Most of its products are sold to organic food stores that traditionally have refused to stock red meat.

“There are a lot of people who didn’t eat meat that are starting to eat meat now because they like the way the cattle are managed,” says Kathy Meyer, general manager for Colcord’s brand division Bluegrass Finished Beef. “People who are concerned about what they eat and the way animals are treated are attracted to the grass-finished product.”

Mark Williams, president of the Kentucky Cattlemen’s Association and owner of a 2,500-acre farm in Marion in western Kentucky, sees the possibility for expansion of branded beef programs in Kentucky. He’s working with a group that hopes to create a statewide beef label similar to the Nebraska Corn-Fed Beef Program.

Currently, most of Kentucky’s 40,000 beef producers are calf producers who keep the animals for fewer than 45 days after weaning, then send them off to feedlots in other states. Williams’ concept, similar to that of Green River Cattle Company but on a broader scale, would give state farmers more responsibility for the finished product.

“I’ve felt we need to own calves for a longer period of time in Kentucky and take advantage of our forages and natural resources,” Williams says. “That’s not saying we need to become a feeding state like Texas or Kansas, but the longer we own the animal, the more value we tend to reap.”

Melding Marketing & Quality
But branding and marketing programs are not for everybody, says Jim Akers, beef integrated resource management coordinator for the University of Kentucky.

Akers sees Creekstone, Green River, and Colcord as entrepreneurial efforts. “It takes a special kind of person to break out into a system where they’re dealing directly with the consumer, and not everybody is equipped to do that,” he says.

Green River Cattle Company’s Givens seconds the view. “I wouldn’t promote this idea to the faint of heart,” he says. “The whole thing sounds like a no-brainer…but the challenge comes because we’re doing things we don’t really know how to do. We as farmers are not good marketers at all.”

In looking at the evolving beef industry in general, it is important for consumers to remember that marketing and quality are two separate issues, and that what one person defines as quality may not be the same as another.

Marketing is crucial to the success of niche producers, Akers says. “It is important for these branded product lines to look at where they add value and to whom and focus on that customer,” he adds.

“Ultimately,” says Akers, “the quality of beef is defined by the person who’s sitting there with the steak on his plate.”







BOOMING BEEF INDUSTRY
After years of losing sales to poultry and pork producers, the beef industry is booming.

Demand for rib eyes, tenderloins, and ground chuck has risen almost 10 percent in the last three years, says Dave Maples, executive vice president of the Kentucky Cattlemen’s Association. And cattle prices paid by processing plants hit record highs last summer.

Beef industry experts credit the change of fortune to several factors.

1. The industry’s new emphasis on offering convenience products, such as pre-cooked pot roasts and beef tips. Within the last five years, the beef industry has introduced more than 300 new convenience products, Maples says. For example, among the new products from Creekstone Farms are three varieties of frozen Angus beef patties. “You put it in the microwave for a minute and a half and you’ve got a big juicy burger,” says Joe Bill Meng, director of genetics for Creekstone. “It even has the bite of a homemade burger.”

2. Changing views on the healthiness of beef, particularly with the popularity of the Atkins diet and its high-protein menu. “We’ve had to fight a lot of misperceptions,” Maples says. “But now people are buying it.”

3. Supply shortages of beef caused by droughts in the West and a U.S. ban on Canadian beef following the discovery of a case of mad cow disease in Alberta in May.







KENTUCKY'S TOP 5 COUNTIES FOR BEEF COWS
(Number of Head of Beef Cows)
Barren Co.: 36,000
Warren Co.: 32,000
Pulaski Co.: 31,800
Madison Co.: 26,200
Bourbon Co.: 23,000

For more information, go on the Web to
www.nass.usda.gov/ky/B2003/p070.pdf

Source: Lee Meyer, University of Kentucky Extension agricultural economist, based on analysis of the U.S. Department of Agriculture January 2002-January 2003 Cattle Report.







GOURMET BEEF RECIPES
Kathy Cary, chef and owner of Lilly’s restaurant in Louisville, has offered several entrees featuring beef from Green River Cattle Company on her menu. She shares two of her favorite recipes.

Green River Jalapeno Burger
1-1/2 lbs. Green River ground beef
2 Tablespoons good quality Dijon mustard
2 Tablespoons roasted and chopped shallots and garlic
1 teaspoon finely chopped jalapeno peppers
Splash of extra-virgin olive oil
Kosher salt and freshly ground pepper to taste
6 Tablespoons good quality pepper jack cheese, grated (Kenny’s Country Cheese, a Kentucky-made cheese, is an excellent choice)

Combine the first six ingredients and form into 6 patties, adding approximately 1 tablespoon of the grated pepper jack cheese into the center of each patty. Grill to order. Add suggested garnish, if desired, and serve with your choice of sides. Serves 6.

Suggested Garnish
2 sliced red onions, drizzled with extra-virgin olive oil and balsamic vinegar; grill until tender
2 bulbs of fennel, sliced; sauté until tender

Toss the onions and fennel together and place on the Green River Burger.

Side Suggestions
Serve with rosemary roasted potatoes and homemade coleslaw.

For the other recipe, Green River Beef Roulade with Roasted Red Pepper Sauce, from Chef Kathy Cary, go to Cooking and in the “Search Recipes” box type in Green River Beef Roulade.







FACTS ABOUT KENTUCKY'S BEEF INDUSTRY
• With more than 1.1 million beef cows, Kentucky ranks as the eighth largest beef cattle state in the country and the largest east of the Mississippi River.

• While many traditional cattle states in the west are decreasing their beef herds, Kentucky’s beef cattle numbers grew 6 percent in 2002.

• The state had more than 39,000 farms with beef cattle in 2002, with an average herd size of 29 head.

• Three-fourths of Kentucky’s cows are on farms with fewer than 100 head. About 86 percent of Kentucky beef farms had fewer than 50 head in 2002; 10 percent had 50 to 99 cows and 4 percent had 100 to 499 cows.







KEYWORD EXCLUSIVE
BEEF CATTLE CERTIFICATION
For information on Kentucky’s Certified Preconditioned for Health-45, or CPH-45, certification program, click here: beef certification