California drought: Grass-fed beef industry reeling
Feb. 21--California's devastating drought is taking a toll on the state's grass-fed beef industry, forcing at least one large-scale producer to switch to grain feed.
Marin Sun Farms, a popular brand with Bay Area consumers who want their beef fed on 100 percent grass, not corn or other grains, can no longer sustain its model. There just isn't enough grazing land because of the lack of rain, said the company's founder, David Evans.
Over the years, customers have gravitated toward grass-fed meat, believing it's more healthful, more natural and tastier, despite the hefty cost. Because it requires a lot of acreage and is more expensive to raise grass-fed cattle than conventional cows, there are fewer than 20 operations in the state.
And without rain, grass-fed beef producers have to find extreme alternatives to feed their livestock. Even organic ranchers, who are required to put their animals out to pasture, have been given temporary leeway by the U.S. Department of Agriculture on grazing requirements in California.
For Marin Sun Farms, the decision to change its business plan wasn't easy, said Jeff Bordes, director of sales and marketing.
"We built this company on 100 percent grass-fed beef," he said. "But the alternative (to not switching to grain) is going out of business."
The 15-year-old San Francisco company started supplementing its cattle's feed with grain a few months ago, letting wholesale customers know that soon much of its inventory would no longer be 100 percent grass fed. Sun Farms plans to tell its direct consumers next week, Bordes said.
In the interest of transparency, Sun Farms has created three labels: green for 100 percent grass fed; yellow for a combination of grass, hay and grain fed, but still living on the range; and black for a combination of hay and grain fed living in pens.
"If we don't get much rain in the next couple of months the bulk of our business will likely be yellow and black label," Evans said, adding that he has nearly 100 employees and he wants to keep them on the payroll.
"It's a tough decision to make," he said. "I can get grass-fed cattle from states outside California, but I'm trying to keep it as close to home as possible to invest in our food shed. My hope is that my core customers will stick with me because I'm investing in my neighbors and in my community. So when the next drought comes we will have built resiliency."
While Sun Farms' meat is not certified organic, the company doesn't use antibiotics for nontherapeutic use or for growth promotion, and it plans to continue that policy, Bordes and Evans said.
For ranchers raising certified organic beef and other ruminants, there is ordinarily a strict policy that the cattle graze a minimum of 120 days out of the year. But because of the drought, the USDA has reduced the number of days if the cattle graze in a designated primary disaster area, which includes all of California, except Riverside, San Diego, Imperial and San Francisco counties.
Anya Fernald, who raises organic grass-fed beef in Northern California for her meat company Belcampo, is considering trucking 2,000 head to the Dakotas or Montana for winter. In the meantime, she's spending about $295 a ton for organic hay, about a 9 percent increase from last year's cost.
"It's not just the price spike," she said. "It's the availability. It's become very competitive with a lot of buyers trying to buy hay. My production costs have doubled since 2013."
As a result, her retail prices have gone up 10 percent, she said. But Fernald said she's going to stick it out and has no intention of changing her grass-fed model. Instead, for now, she's steering her customers away from beef and directing them to the other species -- pigs, fowl, goats and sheep -- she raises on her Yreka ranch.
Clint Victorine, owner of Eel River Organic Beef in Humboldt County, one of the largest grass-fed beef producers in the state, said if it hadn't been for last week's rain, he would be in the same predicament as Marin Sun Farms.
"I was just about to go to Whole Foods and talk to them about introducing grain-fed to my product line," he said. Whole Foods Market is one of his largest retailers. "But then we got that storm and there's another one predicted to come next week and I'm looking better than I did before."
Still, Victorine has had to slaughter his cattle at 800 to 900 pounds instead of the usual 1,050 pounds because he doesn't have the grass to feed them. That's a loss of $200 to $300 a head, he said.
"I've had several grass-fed producers call me and say, 'How you doing this?' " he said. "I can sell every animal I have right now to a feed lot. I'd make money. But then I wouldn't have the Eel River label anymore. I have to do what I need to do to save the brand."
Stacy Finz is a San Francisco Chronicle staff writer. E-mail: firstname.lastname@example.org Twitter: @sfinz
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