1. Aggregating Local Beef Supply In Alabama
Beef Marketing Alternatives
Amy Elizabeth McGhee
Demand for locally sourced meats has increased in recent years, although it remains
a small share of total demand . The lack of availability of slaughter and processing facilities for local meat
production puts a substantial strain on Alabama and the southeastern market. Many producers marketing
directly to local outlets typically have smaller operations, raising fewer cattle than larger operations that sell
into conventional, commodity markets. These small, locally focused producers can perceive a lack of local
slaughter capacity as a major obstacle to the vitality and profitability of their operations. Lack of nearby
slaughter facilities can create logistical impediments to animal slaughter, particularly in being able to
transport animals/meat to and from the slaughter plant in a financially practical way.
Further, processors often cite a lack of consistent supply as a reason that they are unwilling to undertake the
financial risks of expansion in areas with smaller producers. Smaller producers are often unable to achieve
uniformity across animal size and number because they typically can’t capture economies of scale by pooling
larger lots of uniformly sized animals together. Larger slaughter facilities also cite biosecurity issues,
infectious disease transmission, traceability, as well as other factors that could be problematic in the event
product is accepted from small-scale producers . For example larger producers are more likely to follow
strict biosecurity protocol whereas many smaller producers do not have the resources or organizational
capacity to enforce such coordinated efforts. Aggregation models could significantly provide a viable
alternative, allowing small producers the opportunity to obtain substantial market access.
The development of local and regional market aggregators will inevitably meet the need for increased
slaughter and processing, expanding the capacity for localized efforts and enabling producers to market their
output to local and regional consumers. Aggregation and coordination is proving to be an effective solution
that unifies disenfranchised farming efforts. Producers who raise animals to adhere to the same set of
protocols can cooperatively provide a small- or mid-scale processor with consistent, year-round business,
favorable to local and regional branding. These brands may be formal cooperatives that producers co-own
or independent companies that market and enjoy the price discovery of a “commodity-plus” pricing system.
However aggregation models are structured, these scaled-up enterprises are valuable to small- and mid-scale
processors, assuring a regular proportion of business and revenue. Aggregated efforts create win-win
scenarios and economies of scale, benefiting processors, producers and customers. Consistent throughput
can give processors the financial base needed to keep and cultivate a skilled workforce year-round, to invest
in facility and equipment upgrades, and generally be available for local producers. Alliances that seek to
aggregate and coordinate production efforts can greatly foster interest and development of local and regional
systems by securing supply and demand opportunity.
Such a scenario would be especially favorable in Alabama due to distance from downstream markets. It is advisable that
the planning phase for coordinated aggregation begins immediately. This effort, if successful, will demonstrate adequate
economic feasibility to justify a mid-size, regional processing facility being built in Alabama in the future
