Northeast farmers could profit from grass-fed beef if they expand, join forces

New York state and New England have optimal conditions for grass-fed beef production - with an abundance of pasturelands and forage - but higher production costs have made farmers wary of expanding operations.

In a new analysis, published in Agricultural Systems on March 25, researchers find that grass-fed beef can compete with grain-fed beef in the region, even given those higher costs and prices for consumers - particularly if operations are scaled up, either through larger farms or farm cooperatives, which could drop production costs and prices by 24%.

The study comes as the demand for grass-fed beef is on the rise, particularly in the region's urban markets, where consumers want a healthier, more environmentally friendly alternative to grain-fed beef and are willing to pay higher prices for it.

"This study provides a comprehensive, supply-chain-wide evaluation based on first-hand data from farms and processors, which allows us to assess the real economic performance of grass-fed beef systems - making it different from previous studies," said first author Houtian Ge, senior research associate in the Dyson School of Applied Economics and Management. "It's very useful because we need to give farmers, investors and policymakers answers on the final performance of the product, and our conclusion is that generally grass-fed beef is viable and profitable in the region."

Ge said there's room to scale up operations in New York state and New England, with animals grazing on only 43% of available pastureland.

"Meat is one of the fastest-growing sectors, not only in terms of demand but also profitability," added co-author Miguel I. Gómez, the Robert G. Tobin Professor of Food Marketing in the Dyson School, part of the Cornell SC Johnson College of Business. "The supply is not keeping up with the demand, which presents an opportunity for the region."

Investing in domestic grass-fed beef production would also reduce reliance on imported beef - the bulk of grass-fed beef is currently shipped from Australia - and shift economic opportunity to local farmers and processors.

"Local food is healthy, environmentally friendly and also resilient," Ge said. "We learned this lesson from the pandemic, when several slaughterhouses closed and the supply chain was broken - and prices rose sharply. A shorter supply chain is safer and enhances the security of our food supply."

Gómez added that the rise in energy costs makes local food production more attractive. "With a regional food system, you have lower emissions, lower transportation costs, and all the value added stays within the region, with the farmers, the processors, distributors and retailers," he said.