Beef Prices, Why Herd Shares?

This has been my kind of February. We’re loving this spring-like weather. I’m sure it’s just a tease and there’s probably plenty of winter still ahead, but we’ll enjoy these beautiful days while they’re here. We’ve been passing around a stomach bug which has put a slight damper in our week. Amy has had the latest turn of it. Our house falls to shambles when she’s out of commission. I’m not a good mom. Thankfully she’s feeling better now. 

The kids helped me move pigs to another paddock in the woods. “Helped” is probably not the best word, but they were out there roaming through the woods with the pigs, Carter tagging along behind the bigger three. She’s growing up fast and fitting right in with the others, talking more and more everyday and very vocal with her increasing vocabulary. 

We spent a couple afternoons filling herd shares. This is a task in which the kids are actually helpful. Usually we give them the choice in hopes that they’ll want to help. Sometimes they want to, sometimes they don’t. Amy and I are trying to figure out how to navigate work expectations with kids as they grow. Part of the lure to this farming dream was the idea of us all working together. We want them to enjoy childhood play. And we want them to want to work and find joy in it. We want them learn the responsibility that comes with working even when you don’t really want to. And we want them to be compensated for their work, apart from the everyday chores that come with being part of the family. If they want something in life (right now they want lots of things), we want them to learn to work for it, save, and sacrifice. How should we compensate or incentivize a 6 year old? How do we balance work and play? We are trying to think these things through, knowing that our approach to parenting farm kids will change over the years as they do. 

I read a couple articles this week on the beef cattle situation in the U.S. “This is the smallest beef herd since 1951,” coming from a Market Intel report by economist Bernt Nelson. What does this mean? It means there’s not as much beef to go around as there has been in years past. The decreased supply and increase in demand moves the prices upward. 

One of the many reasons we chose the farm to table route was so that we could have more control over our pricing and our margins. Farming is filled with things outside of our control. We can’t make it rain. We can’t set the temperature. We can’t make the sun shine. When your living is tied to miraculousness of life and the unpredictability of the land, risk and uncertainty come with it. Given the many things that farmers can’t control, if we can take more control over our prices and margins by selling locally, why not?

That being said, though we can raise and lower our prices at will, those price changes are driven by the rising or lowering of what it cost us to produce our products. As our expenses go up, so goes our prices. If our family is to make it farming in the years to come, this must happen. A couple years back we sold our momma cow herd and started buying locally raised calves to grow out and finish. Given the economic beef situation previously stated, these locally raised calves have gotten really expensive. I think you get what I’m saying.

All that to say, this year we anticipate our farm inventory to reflect the national beef report: higher prices and a lower supply. We’ve already been seeing signs of the lower supply. Whenever we get meat back from the processor, we fill our monthly herd share subscriptions before putting the remaining inventory on our farm store. For the past few months, our remaining inventory has dwindled less and less, which is usually not the case especially through the winter months with a slower farmer’s market season. We have sold out of ground beef the past couple months which hasn’t happened (or even come close to happening) since the start of COVID. We expect our online and market inventory to be very hit or miss throughout the coming year, erring more on the miss side of the shelf. 

I don’t really know how to conclude all that. More of an update than anything. Just know we are not trying to price gouge anyone. We know the cost of living is going up across the board, and we don’t want to add weight to already increasing burden. We know the vast majority of our customers are working families like ourselves, trying to get by best they can. It remains our mission to provide the best meat we can to the people in our neck of the woods. We promise to keep our prices as affordable as sustainably possible without compromising our values as caretakers. 

If there is a takeaway to be had, I suppose it goes back to the herd shares. If our inventory gets low, it’s not because we’re not producing, it’s because it’s being used to fill monthly herd shares. If our supply goes down, herd share members get their meat every month. If prices go up, their herd shares prices are locked in for 12 months. Those that have already joined the herd are a step ahead, not having to worry if there will be meat on the shelves or what kind of price tag it will carry. I expect more changes on the retail end of the beef industry especially in the later part of the year. 

Also noteworthy, this is not a quick fix. Unlike chickens that grow to maturity in weeks, it takes years to grow a cow herd. Cattle numbers don’t magically increase at the snap of a finger. With prices as high as they are, it also makes it harder for farmers to justify keeping those replacement heifers required to grow the herd numbers. It’s hard to keep a young heifer to be a momma cow and continue to invest time and money into her, knowing it’ll take a couple years before seeing any return on the investment, when she could be sold now for $2000. The rebuilding of the nation’s beef herd will be a slow and expensive growth.

Enough economics. Here’s a quote I listened to this week from “Are you All Right” a short story by Wendell Berry:

“Elton worked hard and worried hard, and he was often in need of rest. But he had a restless mind, which meant that he could not rest in his own place in the presence of his own work. If he rested there, first he would begin to think about what he had to do, and then he would begin to do it. To rest, he needed to be in somebody else’s place.”

Have a good week.

Will