Consumer Demand May Drive Expanded Beef Market


Tennessee beef cattle

Researchers at the University of Tennessee Institute of Agriculture are examining the feasibility of a Tennessee Certified Beef program, which could expand cattle marketing opportunities for local beef producers.​ Photo by T. Johnson, courtesy UTIA. Download image​.

KNOXVILLE, Tenn. — Consumer demand for locally grown beef has some Tennessee beef producers pondering their options, while researchers at the University of Tennessee Institute of Agriculture examine the feasibility of a Tennessee Certified Beef program.

Would you be willing to pay a premium for beef that is born, raised and harvested in Tennessee and graded USDA Choice or Prime? Would enough Tennessee beef producers participate if a Tennessee Certified Beef (TCB) program was offered? These are the leading questions that researchers from the Department of Agricultural and Resource Economics sought to answer in a study that evaluates an expansion of the Tennessee cattle market.

UTIA researchers surveyed Tennessee beef consumers regarding their willingness to pay an increased premium for TCB, as cattle producers would have to recoup the additional costs associated with producing a TCB product. The consumers indicated “yes,” they would indeed pay the premium to have Tennessee Certified Beef. The demand is there.

Next the researchers examined supply. If such a program existed, would enough Tennessee beef producers be willing to participate? Due to the competitive advantage other regions in the nation have in grain-finishing cattle, the vast majority of feeder cattle are sent to feedlots in Midwestern and Western states to be finished and harvested. Only 6.8 percent of the 950,000 head of cows and heifers calved in Tennessee in 2016 were harvested in-state.

However, with the demand for locally produced beef, cattle producers are weighing their options, and UTIA researchers are running the numbers. Sixty-seven percent of surveyed cattle producers expressed an interest in a TCB program, given it was profitable. On average, each surveyed producer that expressed an interest in participating in a TCB program was willing to supply 32,329 pounds of beef per year.

“This research demonstrates interest in locally branded beef by consumers and producers, meaning cattle producers in the state may have an opportunity to capitalize on another segment of the cattle industry,” says Andrew Griffith, UT Extension livestock economist. “However, this opportunity does not come without challenges, extra effort and significant risk as it relates to production and marketing.”

There are some noted challenges such as the capacity of harvesting facilities and the climate. Summers are typically hot and humid, which reduces the efficiency of growing cattle. Winters tend to be cold and wet, leading to muddy conditions in feeding operations, which reduces feeding efficiency.

Overall, research results imply both supply and demand for a state-branded beef product. In December 2013, Tennessee Governor Bill Haslam challenged policymakers and state agricultural leaders to expand marketing opportunities for Tennessee producers and encourage new production systems and agribusinesses. The information from this study is valuable in determining the feasibility of a TCB program and could be another opportunity to meet the governor’s challenge, satisfy consumer demand and provide expanded cattle marketing in Tennessee.

The University of Tennessee Institute of Agriculture celebrates 50 years of excellence in providing Real. Life. Solutions. through teaching, discovery and service. ag.tennessee.edu​.

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Contact:

​Andrew P. Griffith, assistant professor, UT Department of Agricultural and Resource Economics, 865-974-7480, agriff14@utk.edu