Direct Marketing Beef Focus of Panel Discussion

During the early months of the COVID-19 pandemic, Oklahoma rancher, Scott Blubaugh saw a large disparity between what he was earning for the cattle he sold and what the packers were earning for the cattle they bought from him.

“The packers were making $1,300 a head on the same animal our ranchers were losing $300 a head on. We thought, “there has to be a better way,’” said Blubaugh, who also serves as President of American Farmers & Ranchers, a state Farmers Union organization.

About this same time, fifth-generation South Dakota cattle producer, Scott Kolousek faced a similar challenge.

Both men found a better way through direct marketing. Today, Blubaugh markets 100-percent of his feeder cattle through Oklahoma Certified Beef. And although Kolousek markets a much smaller percent – about 6 percent of his herd – both men see opportunity for growth in direct marketing beef from producers to consumers. This was the focus of a panel discussion held Dec. 16 during the South Dakota Farmers Union (SDFU) State Convention in Huron.

“Consumers want to buy local,” Blubaugh said. “If you make it easy for them to buy local, they will every time. You don’t have to be the cheapest deal in town. You don’t have to sell hamburger at the same price as Walmart because they sell burger from Brazil. You don’t compete at that price. You offer consumers your story of your family farm or ranch  and how animals were raised.”

Kolousek agreed. “We have never had a customer balk at the price. We sell by the quarter, so at first it is an investment up front, but when they consider they are buying enough beef to feed their family for six months or a year, many don’t even ask the price.”

Blubaugh explained to convention attendees that Oklahoma Certified Beef got its start with the help of an Oklahoma State Legislator and the support of Oklahoma Farmers & Ranchers, because the organization’s policy supported the bill. It passed the state House and Senate unanimously.

To participate, cattle producers just need to sign an affidavit that certifies their beef are born, raised, fed and processed in state.

 “Consumer loves that. And they want to buy that,” Blubaugh said. “This is the reason our label was important – because we could not get COOL (Country of Origin Labeling) reenacted.”

Blubaugh explained that the same pandemic that caused consumers to care about their local food supply also helped strengthen the local processing plant infrastructure. The state of Oklahoma invested millions of CARES dollars in updating existing local meat lockers or building new facilities.

“COVID was a terrible thing, but if there was one good thing that came out of COVID is it got the consumer to focus back on where our food comes from,” Blubaugh said. “Consumers want a reliable supply too. And they found out the Big Four system is not very reliable when things go wrong or we have Black Swan events. Having the local food system, raising local and processing local and even local retail – consumers value that and maybe they didn’t as much before. Without COVID this probably would not be successful.”

Finding local processing facilities with enough capacity to process cattle is a challenge, said Kolousek. “We take our cattle to eight processing plants and drive more than a hundred miles.”

In addition to financing processing plant updates, Blubaugh said the Oklahoma Farmers & Ranchers organization is working to encourage junior colleges and high school agriculture education programs to begin training the next generation of meat cutters. 

By marketing their beef locally, he is able to receive about $2 a pound live weight. Kolousek said he also receives a bit more for the small percentage of his herd he direct markets.

Supporting local meat processing infrastructure and improving competition within the livestock markets by breaking up monopolies among large meat packers are among the policy issues discussed during the 2022 South Dakota State Farmers Union Convention. Delegates will bring this policy to the National Farmers Union convention held in March. To learn more about South Dakota Farmers Union, visit www.sdfu.org.