A few weeks ago, I received a call from a local restaurant in Colorado that only wants beef with the following specifications:

The grain-fed beef must all be graded USDA Prime. The restaurant wants 25 cases per week of just three items: tenders, rib eyes and strip loins.
The beef must be processed in the State of Colorado from cattle raised in Colorado.
The beef must be fresh, never frozen.

I listened and took notes and grew more pessimistic as the conversation progressed. Finding 25 cases per week of Prime tenders, rib eyes and strips in this market would be hard enough, but the next requirement was the deal breaker:

The beef couldn’t come from a big packer, it had to come from a smaller processor.

I have a fairly good understanding of what’s possible and what’s not possible when it comes to finding local beef programs. I explained to the caller that there are no beef producers or small USDA plants in the state that can produce this requirement. Furthermore, I emphatically stated that this is an unfair specification to even request. The customer wouldn’t take any of the middles that graded USDA choice, even if they were high choice. This was an impossible spec. Only a big packer could fill this order weekly.

This type of call is not that uncommon, as local restaurant chains aspire to find local programs to promote locally sourced choices. Could you find beef that met all of these requirements in your state? Few states could.

What many restaurants and even retailers fail to recognize is that small packing plants need to effectively move all the parts of the cutout to even stay in business. By the cutout, I mean all the carcass parts of the animal.

It’s certainly not sustainable for a small operation to attempt to fill this sort of order. And yet I see some try, as they are eager to get a program started and they figure they need to start somewhere, so they might as well start with the easy-to-move, expensive middle meats.

But then their freezer quickly fills up with all the other cuts …

One small USDA processor I consulted with had been running for a while with moderate success by finding about a dozen customers that wanted to buy the more popular cuts of their local grain-fed beef. But that strategy forced them to rent outside freezer space to store pallets and even truckloads of cutout items they couldn’t sell. After a rather short time, they had over two full loads of beef cuts in the freezer, with no plan to balance the sales of all the cuts.

If you’ve been in this situation, you may think, "Well, if you can’t sell it as a sub primal, just grind it! Ground beef is easy to sell, isn’t it?"

The challenge of this approach is getting enough money for your grinds. It’s hard to do, since customers are not likely to pay two or three times more for grinds than they do for conventional ground beef. The demand for high-priced "steak burgers" just doesn’t compare with the demand for more affordable grinds, so you’ll end up selling it at a loss.

Most small producers will find this approach is just wishful thinking, and it’s not something that can be maintained as an effective long-term strategy.

So how do we get local restaurant chains and smaller, independently owned retailers to better understand that small producers and small plants need to move all the parts of the cutout to remain viable? How do we encourage restaurants and retailers to get creative and find appealing and profitable uses for what some consider the "less popular" cuts?

Cutout challenges at small processing plants

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