Cashing in on direct beef sales: Initial considerations for livestock producers
In recent years, consumers have expressed a growing interest in knowing where their food comes from and in sourcing that food directly from the producer. This style of marketing – popularly coined “farm-to-table” or “farm-to-fork” – has allowed consumers to bypass the supermarket and purchase beef directly from ranchers. Consumer interest in direct beef sales was supercharged by the supply chain disruption and shortages caused by the COVID-19 pandemic. Difficult times have created new opportunities for beef producers to satisfy the demand for individual cuts of beef sourced directly from the ranch.
As producers analyze whether to venture into the direct beef sales market, common questions often arise. Some frequently asked questions are discussed below.
Q: Where do I start?
You should first consider forming a new business entity to protect yourself from personal asset liability. Your new business entity should be separate from any existing ranching operation or other business. You should consult with legal counsel to determine what type of entity best suits the needs of your business, considering factors such as ownership structure, tax liability, and protection from legal liability. You should also identify your target customer base because this choice dictates other considerations (e.g., processing facility, storage considerations, shipping).
Q: Where do I take my cattle for processing?
The processing facility you should use depends on your target customer. For example, if you are selling your product to customers in Oklahoma, you may take your animals to a facility that is inspected by the State of Oklahoma or the United States Department of Agriculture (USDA). If you are selling your product to customers in a different state, however, you must take your animals to a USDA-inspected facility. Regardless, you may not take your animals to a custom-exempt processing facility. These facilities are for individual consumption, and the products will be labeled “NOT FOR SALE.”
Q: How can I locate meat processing facilities near me?
The Oklahoma Department of Agriculture, Food, and Forestry (ODAFF) website has a list of current meat processing facilities separated by the type of facility. Further, the USDA Food and Inspection Service website allows individuals to search for USDA-inspected facilities.
Q: Do I need any permits to sell beef directly to consumers?
Yes. ODAFF requires you to obtain a Certificate of Registration for Distributors, Meat Brokers, and Public Warehousemen. Depending on your location, your city or county health department may require additional permits.
Q: What else should I consider?
When starting a new business, there are many considerations. Among other things, you should consider labeling requirements, storage requirements, and tax implications. McAfee & Taft’s Agriculture and Equine Group is well-equipped to advise and support you as you start your own direct beef sales business.