Growers of natural beef avoid market fallout

The discovery less than a month ago of a single cow in Mapton, Wash., stricken with mad cow disease has put beef prices all across the United States in the tank.

Major importers like Japan and Mexico now refuse to buy American beef, auction yards have canceled sales across the West, fearing rock-bottom prices, and consumers are asking more questions than ever about the safety of the meat.

By JOHN STROMNES of the Missoulian

http://missoulian.com/articles/2004/01/10/news/local/news04.txt

But it hasn’t been bad news for everybody in cattle country. While prices of commodity beef have gone down about 15 percent since the Dec. 23 announcement, interest is growing and prices are stable for producers of certified organic and natural-grown beef cattle in western Montana and elsewhere.

The reason: Mad cow disease, or bovine spongiform encephalopathy, is believed to be transmitted by giving cattle feed containing tainted slaughterhouse trimmings. Although the U.S. Food and Drug Administration for several years has prohibited neurological organs and tissues from being used in cattle feed, a host of other animal products is still legally used in America’s commodity meat industry to feed beef cattle and dairy cows. These include beef blood, pork fat and rendered poultry wastes.

Organic and natural-fed beef cattle are strict vegetarians from birth, as are their mothers. They eat only hay and grain, not feeds containing animal byproducts or hormones.

It takes longer, and costs more, to grow these organic and natural-fed cattle to market size. But producers say the process provides a more consistent, higher-grade product, and gives health-conscious consumers more confidence in the meat’s safety.

"Through this BSE episode we’ve been able to maintain our price. Customers realize we do have a safe product," said Roy Tufly of Montana Natural Beef, a producer cooperative based in Ronan that has been raising and marketing Angus beef cattle in western Montana for the last six years. The price of Montana Natural Beef is normally about 30 percent above regular beef on the wholesale market, he said. That margin has increased since the Mapton cow drove commodity prices lower.

"We haven’t actually sold any more cattle (since the BSE incident), but we’re getting a lot more interest," he said.

Montana Natural Beef cattle are born and raised on co-op members’ ranches in the Mission Valley, where they eat pasture hay from weaning until they are bout 600 pounds. They are fed to maturity – 800 pounds or so – on corn at Tufly’s feedlot in Dixon, or at another co-op member’s ranch in St. Ignatius, then slaughtered and packed under USDA inspection at White’s Wholesale Meats in Ronan.

They are sold retail at the Good Food Store and Bi-Lo Foods in Missoula, as well as online at http://www.montananaturalbeef.com. Tufly said the co-op also sells a half or whole beef directly to customers. Their best cuts – New York steaks, for example – are in high demand from restaurants as far away as Chicago, where it is shipped by air to assure freshness.

Other niche producers of Montana beef have also benefited recently.

"I guess the interest since this Washington state deal is pretty substantial. The big change is food manufacturers are now calling us," said Harry Armstrong of the Half Circle Ranch in Belgrade, one of Montana’s first certified organic beef producers.

The USDA has allowed the term "organic" to be used for beef cattle only since Oct. 21, 2002. The agency agreed to the certification only after a 12-year battle with consumer groups that forced the agency to adopt a uniform, enforceable organic marketing definition.

Armstrong said his cattle ranch has been organic for years, and has the records to prove it – no pesticides or fertilizer on the hay, no hormones or antibiotics in the cattle, no animal byproducts in any feed.

So he was among the first to apply for and receive the USDA organic designation in Montana once a certification process was approved.

He sells his beef at food cooperatives in Billings, Helena and Bozeman, and is not planning on expanding, since drought has limited his beef-cattle feeding capability to about 100 head – the number he can feed with organic hay he grows on the ranch.

"I’m just taking care of my regular customers" despite the food manufacturers’ interest, he said.

Despite concern over BSE and hormone-related issues during the last decade, organic and natural beef still represent only a tiny fraction of U.S. beef production. All organic meat production, including poultry, comprises less than 1 percent of the overall U.S. meat market, according to USDA. Organic beef is an even smaller share.

Montana Natural Beef, based in Ronan, is only a tiny fraction of that fraction.

But it is the only certified natural beef producer in Montana, Tufly said, and has shown slow but steady growth over the last six years. These producers now bring about 25 finished animals a month to market.

Natural beef differs from certified organic beef in significant respects. The natural cattle are not fed pesticide-free, fertilizer-free, certified organic grass and grain as organic cattle must be. They are fed hay that grows on the ranches they are raised on in the Mission Valley. Organic beef cattle are often not fed grain to maturity, as Montana Natural Beef are, and if they are, it must certified organically grown grain.

Tufly gets the corn he feeds the Montana Natural cattle by the railroad-car load and it is not certified organic. Trying to buy certified organic feed for cattle is just not economically feasible.

Tufly said that by feeding the Montana Natural cattle corn, the cattle fatten up and much of the meat produced is graded "choice" by inspectors. This is the more tender, less lean product preferred by high-end restaurants and by many consumers.

Jim Riddle, organic policy specialist with the Rodale Institute and a member of the National Organic Standards Board, said last month’s BSE discovery has raised consumer awareness about practices used by commodity dairy and beef operations in the United States.

"As consumers learn that all of these substances are prohibited in organic cattle feed, and that organic cattle must be identified and traced from birth through slaughter and packaging, including records of all feeds and medications, I anticipate that the organic meat industry will see increased consumer demand," Riddle said.

Organically oriented consumer organizations already report vastly increased interest in BSE and beef.

In western Montana, Tufly of the Montana Natural Beef cooperative is cautiously optimistic.

"We had been selling about 20-35 animals a month. We’re hoping the market is going to expand a little now as customers realize we have a safe product," he said.