Why does buying directly from a regenerative, small-family ranch cost more?

I get e-mails such as the one depicted above often. People just can’t seem to wrap their head around why our products cost more. There are a myriad of reasons to buy directly from your local farmers. But, why do products from local farmers tend to cost more than what you see in the grocery store? Quite honestly buying local does not always mean paying more. Some (not all) of our products are competitively priced with chain grocers, but additionally we provide a level of quality and service that can’t be matched, environmental and social benefits, and long-lasting marketplace competition.

The single most important factor that effects our pricing is economics. Our prices are based on a Cost of Goods Sold and a very small profit margin. We lack the economy of scale that large producers, packers and distributors have. These companies are pushing hundreds of millions of dollars in sales yearly. Have you ever heard the term “economies of scale”? Our production costs are simply higher. Our processing costs on a whole beef for example are almost triple and we make no money on the distribution side. In fact, the distribution side of our business such as farmer’s markets and home deliveries are not profitable at all. They are a cost that is absorbed by the production side of our company. You might think that’s normal, but it’s not. Ask Sysco if they make a profit or a loss? Sysco is a food distribution company that handles product worldwide. They produce none of their products. Alright, enough ranting about how my costs compare to Fortune 500 companies. If you didn’t get the idea that’s because it’s like comparing apples to grapes, both fruits but two very different things.

Another reality is that cheap isn’t always good. This is the case for many reasons. The commodity, industrialized food system comes at a hidden cost to everyone in the form subsidies and healthcare. These subsidies (tax dollars) are spent on everything from repairing the environment they destroy to subsidizing a flawed industry. I know that our production practices are better for the livestock, the land and our community. We focus on soil health and regenerating ecosystem functions. These ecosystem functions that repair the mineral cycle, the water cycle, the energy cycle and improve community dynamics have an effect on everyone. Conventional agriculture is a extractive, degenerative linear process that does not provide any of these services. We have never taken a single dollar in subsidies from the government for our ranch. We don’t participate in EQUIP to build new fences, we don’t purchase rainfall insurance for our rangeland, we don’t take any money from the government period. Why? Because of a moral obligation to our customers. We price our products based on their true cost. If I were to take a government handout that would be like selling you a chicken at $15 and saying “oh, by the way I am going to take another $1 from your pocket without you knowing in the form of a government subsidy.” Quite honestly if we want to be truly regenerative and sustainable then our businesses should not be subsidized in any form or fashion. Farms and ranches must be able to stand on their own two feet.

Interestingly a very large percentage of the grass-fed beef sold in the United States originates from Australia, New Zealand and Brazil. How do they do it so cheap? I don’t have the answer to that and neither does anyone else. Perhaps it is scale, cost of production or some other factor. Interestingly, with the repeal of the Country of Origin Labeling Act (COOL Act) packers and distributors in the United States can import this cheaper grass-fed beef, repackage it and label it as a “Product of USA.” If that isn’t a blatant lie and misleading the consumer then I don’t know what is! There is a whole slew of corporate political influences on our food system. These influences result in green washing of product labels and burdensome regulations for small, family farms like ourselves.

I’m not the one to sit here and complain all day about how the cards are stacked against ranchers like myself. I get out and work in the pasture just like anyone else in my industry every single day. With blood and sweat we are slowly healing this broken ground. Before assumptions are made it’s always best to do your research and become educated on the economic implications and politics of our food system. It’s a bold statement to assume a direct-to-market farmer is unreasonably pricing their product without knowing anything about their business. I challenge anyone who questions our prices to come work beside me for a day. Learn about my business, learn about the challenges we face and what we are doing to become a positive influence within our community. You may then begin to understand what we do and why we do it.