The report says that as consumers seek out
premium animal products, grass-fed beef is riding a wave of popularity,
hitting $480 million in supermarket sales for the 52 weeks ending April
20, up about 15% year-over-year – compared with 3% for the rest of the
sector. Restaurants have also jumped on the bandwagon, with shipments
from distributors to independent and small chain restaurants increasing
15% last year.
Mainstream retailers such as Kroger, Walmart and
Safeway carry beef with “grass-fed” labels, Bloomberg says, as do
casual restaurant chains as Panera and Chipotle, among others.
But as appetites for more “naturally raised”
beef have grown, so have cheaper imports. Bloomberg cites Stone Barns
Center for Food & Agriculture data that show much lower cost for
imported grass-fed beef, due largely to the fact that most U.S. young
cattle that could be slaughtered off grass produce higher returns when
sold for finishing in feed lots.
In addition, many countries lack abundant stocks
of competitively priced grain for cattle feed and so Australia, New
Zealand and many South American operators sell their beef after being
fed on grass. As a result, less expensive grass-fed beef from these
countries has been flowing into the U.S. for some time. By value, 75% to
80% of grass-fed beef sold in the U.S. comes from abroad, according to
the Stone Barns report.
In 2015, the US government repealed its highly
controversial “country of origin” labeling requirements. Under current
rules, imported meat products that are “processed” in the United States
(which could mean simply cutting a large piece into smaller ones in a
USDA-inspected plant, Bloomberg says)—and receive a “Product of USA”
stamp.
Bloomberg says the labeling is “even trickier”
than it seems, since the designation “grass-fed” lacks any official
definition in contrast to USDA’s official “organic” label with its
specific rules and standards. In fact, “grass-fed” does not even mean
animals are mainly held on pastures.
Some “grass-fed” beef comes from “grass
feedlots,” where they are confined in pens and fed grass pellets,
according to Stone Barns. Other products are labeled “grass-fed,
grain-finished,” a shorthand for the standard industry practice of
raising calves on grass and then fattening them on grain.
Bloomberg thinks this “vague and misleading”
labeling extends “up and down U.S. supermarket aisles” and makes many
consumers skeptical when they read claims on food packages.
Now Perdue—more famous for selling chickens than
beef—says it is “building a market for grass-fed beef that’s truly made
in America,” even if it costs more than the imported kind. Led by Jeff
Tripician, president of Perdue’s premium meat division, the company said
it is acquiring Panorama Meats, the largest U.S. producer of grass-fed,
certified organic beef fed from USDA-certified organic grasslands in
Northern California, Southern Oregon, Montana, South Dakota, Nebraska,
Wisconsin and Colorado, Perdue said.
However, Bloomberg notes that “truly grass-fed
cattle” take longer to raise than conventional beef, “contributing more
methane to the atmosphere” and expects that some environmentalists will
argue that this will “further fuel global warming.” American cattle are
typically “finished” and marketed after a 16- to 20-month life including
several months on concentrated grain feeds, Bloomberg thinks. “Organic
and grass-fed cattle” need 20 months to 28 months to reach market
weight.
Beef labels have considerable recent U.S.
history, it turns out. In 2008, Congress required the industry to use
labels that described the product’s “country of origin” — and which gave
a superior rating only to products of animals born, raised, fed and
slaughtered in the United States.
Because much of the U.S. supply chain depended
on young animals from Mexico or Canada, the policy was quite
controversial and highly criticized by many—and, considered a violation
of international rules. In response, a much smaller share of “domestic
content” is now required to qualify as a “domestic” product.
In addition, the benefits of even well-managed
grazing systems may prove elusive, Bloomberg thinks although advocates
of grass-feeding claim very broad benefits. For example, Tripician
argues including better animal welfare, soil and reductions in grain
transportation and a reduced carbon footprint. Now, with Perdue’s
backing, the hope is that market access for Perdue’s American grass-fed
beef will expand and that consumers, at least, will know what they’re
buying.
The U.S. beef industry tends to be highly
competitive and traditional grain-finished beef is widely considered
very high quality — so, Perdue’s efforts likely will encounter growing
competition from other producers.
Also, it is likely that the charge that USDA
labels are misleading will be unwelcome for much of the beef industry
and for the USDA policies that faced storms of criticism during the
“country of Origin” fight. Clearly, social norms for complex industry
operations that have narrow margins and are extremely difficult to
define or police will continue to be difficult to provide in spite of
industry efforts to satisfy potentially lucrative markets, Washington
Insider believes.