Direct marketing, for some farmers and ranchers, can be a way to capture more of the consumer dollar. By bypassing the middlemen - wholesalers, distributors, and retailers - direct marketing can allow a producer to receive retail value for his or her product. But direct-market meat is a different story. Direct-market meat requires substantial processing - the harvest and cut-and-wrap services provided by processing facilities and butchers require significant skill and capital investment. Over the last 50 years, we've lost local meat processing capacity - small local butchers simply don't exist in very many places. Many of us assume that increasing this processing capacity would solve the problem. In my experience, the solution isn't quite so simple. As someone who has marketed meat directly to consumers at a modest scale (120+ lambs per year at our peak), I have observed a variety of complicated questions regarding the real issues involved increasing harvest and processing capacity.

As a small producer, I wanted the ability to call a plant one week and deliver animals the next week. However, most of the small plants in our region are fully booked as much as a year out. A new small plant would be similarly impacted eventually – and from the perspective of the plant, it would be easier to have 10 clients bringing 200 steers (or 500 lambs) per year than to have 200 clients bringing 10 steers (or 25 lambs). In my mind, the only way to address this need for scheduling flexibility for the producer would be to build a plant with excess capacity, which is not economically efficient. This excess capacity would allow me to call the plant on Thursday to schedule a harvest, deliver my lambs the following Sunday, and have packaged meat by the next Friday. If the plant were running at capacity, it could not accommodate me.

Seasonality is related issue, in my mind. Grass-fed meat is a great opportunity for some producers, but typically not a year-round product for many small-scale ranchers. What will a new plant do to keep its crew busy on a year-round basis? I think this is another factor that pushes plants to find fewer, larger-scale customers.

Meat processing has largely been organized on a manufacturing model. The plant buys the raw product (livestock), converts it into meat, and then sells it to distributors, wholesalers, consumers, etc. The model we're talking about is a service model – the plant has to make money on the service it provides rather than adding value to product it owns. That's a very different model, one that is a struggle for existing operations (let alone new ones). For example, when we started with our regional processor, we could get a lamb harvested and fabricated for $50/head. The company soon realized that the cost of providing this service was much greater than the cost of the labor involved – they had to deal with 100 or more operations like mine that each wanted to harvest 10-15 head once a month. The cost is now $120-130 depending labeling and other factors. This is reflective of true cost of providing a service rather than selling a product.

Despite the interest in new processing capacity locally, there has not been any significant financial commitment from local citizens or producers towards the construction of a facility. This is where the rubber meets the road. And I suspect that this is the crux of the issue – there are both regulatory and economic barriers to entry in the meat processing business. The low return on investment for a service-oriented meat processing facility may make the economic barriers the more difficult to fix. I think if the economics were positive, we'd see private investment in new USDA-inspected processing capacity.

Alternatively, we may want to consider focusing on the regulatory barriers. Along those lines, a couple of things come to mind for me:

1. There are inspection-exemptions for direct-marketed poultry based on scale of operation. In some circumstances, a poultry producer could harvest as many as 20,000 birds a year without USDA inspection and sell the meat directly to end users. No similar exemption currently exists for livestock.
2. There was state legislation adopted last year making it legal for cattle producers to sell a live animal and for the buyer to then arrange for harvest and cut-and-wrap. There has been some confusion as to whether this new law applies to other livestock; the California Department of Food and Agriculture (CDFA) is taking the position that it only applies to cattle since cattle producers pay for an ownership inspection (e.g, brand inspection) at harvest. There is interest among other livestock groups (California Wool Growers, California Pork Producers, etc.) in extending this option to other species.
3. CDFA could provide more state inspection (for a fee, perhaps). This could facilitate direct marketing of meat products. 

This is probably WAY more information than anyone wants on this topic, but I do think it's important for us to understand the complexity of the issue. I guess I see a couple of important needs:

1. Economic analysis and extension – I think UC Cooperative Extension (and others) could help small-scale producers (and large-scale, for that matter) better understand the economics of selling meat versus selling live animals. My very simplistic assumption when I started was that I would be more profitable selling $350 worth of meat than I would be selling a live lamb for $150. Reality was much more complicated. I think there's a need to help folks better understand this question. Producing a finished product (as opposed to a live animal) at scale is a complicated production and economic model for most livestock producers. It requires a very different set of skills.
2. Research-to-policy – I also think there is a role for extension and others to help regulators understand the opportunities and barriers involved in direct-market meat production. This runs the gamut from ensuring food safety to understanding economics to quantifying consumer demand.

Many of my extension colleagues - in California and elsewhere - have spent considerable time and effort examining this problem. Their work has been exceptionally valuable - we have a much better understanding of the complexity of these challenges today than I did when I started in the direct-market meat business more than a dozen years ago. Perhaps these questions are part of the maturity process - the early pioneers must expose the weaknesses in the system. Some of these weaknesses are economic; others are regulatory. I'm hopeful that we're making progress towards discerning - and addressing - the most critical barriers.

Targeted grazing using sheep, goats, or cattle (or combinations of two or more species) can be an effective way to manage vegetation for a variety of goals. Given the ever-present threat of wildfire in the summer and fall months in the Sierra foothills, many landowners and land managers are considering hiring targeted grazing contractors to help manage wildfire fuel loads.

Using ruminants to manage fuel loads through targeted grazing offers a number of important advantages:

• Targeted grazing can be a cost-effective alternative for reducing fine and ladder fuels over large and rugged landscapes that may be inaccessible for equipment or hand crews.
• Targeted grazing is especially effective at maintaining fuel reduction treatments like shaded fuel breaks.
• Unlike many treatment methods, targeted grazing actually removes fuel from the landscape - the wildfire fuels are removed by the grazing/browsing livestock.
• Targeted grazing contractors can often provide all necessary infrastructure (fencing, livestock water, predator protection, etc.).

By managing the type and number of animals, the duration of grazing, the season and frequency of grazing, and the spatial distribution of livestock, targeted grazing can help landowners and managers achieve a variety of land management goals.

Where is Targeted Grazing Effective?

Well-managed targeted grazing can be used to address site-specific landscape goals. For example, targeted grazing can impact specific invasive weeds (like yellow starthistle, medusahead or Himalayan blackberries). By controlling competing vegetation at crtical times, targeted grazing can enhance habitat restoration efforts. Finally, targeted grazing can reduce fine fuels and ladder fuels to reduce wildfire danger in a variety of environments.

Typically, targeted grazing is a cost-effective vegetation management alternative where other options are ineffective. Specifically, targeted grazing can be more cost effective on landscapes that are too steep, rocky or remote for conventional vegetation management (like mowing or chemical treatment), or in the urban-wildland interface where burning is not an option.

Managing Animal Impacts

Grazing livestock have three basic impacts on the landscape. They consume vegetation through grazing, they trample vegetation (which can facilitate the breakdown of plant carbon in the soil and modify wildfire fuel profiles), and they transfer nutrients through defecation and urination. Targeted grazing uses all three impacts to accomplish specific vegetation management goals.

Targeted grazing contractors also have a solid understanding of the growth characteristics and vulnerabilities of specific target vegetation. For example, grazing yellow starthistle with sheep or goats during the bolt stage (April to June, usually), can dramatically reduce seed production. Browsing Himalayan blackberries in the fall as the plants are going dormant can stress root systems at a key period.

Timing of targeted grazing for fuel reduction is also important. To reduce the potential for re-growth, fuel reduction grazing should be done after the last spring rain. Since the nutritional quality of annual grasslands typically declines rapidly at this time of year, targeted grazers may need to provide supplemental nutrition to ensure appropriate impact to targeted vegetation. In some instances, cattle may be the most appropriate species for particular projects.

Why Pay Someone to Graze? Isn't Free Grass Enough?!

Targeted grazing is a very different business model than simply grazing for livestock production. Effective targeted grazing focuses on impacting target vegetation at exactly the right time for specific landscape or vegetation goals. Traditional livestock production, on the other hand, focuses on putting weight on animals or increasing reproductive success. Traditional livestock operations generate income from the sale of animals and animal products; these operations focus on body condition and the nutritional status of the animals at specific production stages. Targeted grazers generate income from vegetation management services; these operations may accept a drop in body condition or reproductive success to achieve desired impacts to low quality forage as long as this service is paid for.

Unlike equipment, which can be parked when not in use, livestock must be fed before they arrive on your property and after they leave. Part of the service that targeted grazing companies provide is the logistical planning necessary to keep their livestock "employed" throughout the grazing season.

Goals are Important!

Realistic landowner and land manager goals are important for successful targeted grazing applications. Targeted grazing is often a long-term approach that addresses prior problems. For example, invasive weeds may be symptomatic of a long-term lack of management. A single targeted grazing project is unlikely to address these long-term symptoms; a multi-year approach will likely be necessary to improve ecological function and reduce the weed seedbank. Recognizing this, many targeted grazing contractors will reduce their annual per acre charges in exchange for multi-year contracts.

Expectations are also important. Landowners who expect a uniform appearance to land treated with grazing (as if the land had been mowed) will likely be disappointed; grazing often leaves a patchy appearance on the landscape. Furthermore, grazing does not often provide the immediate visual effects of chemical treatment, mastication, or mowing. Vegetation treated with herbicide, for example, often shows immediate impact; grazing is a long-term management technique.

Finally, timing is critical. If targeted grazing occurs too early in the season, soil moisture may be sufficient for the targeted vegetation to re-grow. On the other hand, the palatability of annual grasses and weed species may decline as these plants mature. Contractors often provide supplemental nutrition and other management techniques to impact this lower quality forage at the optimal time.

What to look for in a Targeted Grazing Contractor

Targeted grazing companies are  service providers. Consequently, experience, responsiveness, and attention to detail are critical. Consumers should look for companies with experience in grazing projects in similar environments and situations. Ask potential contractors about their experience level – and ask for references.

Targeted grazing may not be the least costly vegetation management option (compared to mowing or herbicide treatment). As outlined above, targeted grazing is often the best alternative where other treatments aren't possible.

Most targeted grazing contractors will provide an estimate on a per acre basis, allowing consumers to compare targeted grazing to other vegetation management options. In addition, contractors will provide an estimate of the project start date and duration. These estimates can be somewhat uncertain depending on year-to-year changes in vegetation quantity.There are a variety of factors that impact the cost of a particular targeted grazing project, including:

• Relative ease (or difficulty) of setting up infrastructure, including loading and unloading facilities. Projects in steep or difficult-to-access terrain require more labor (and, therefore, are typically more costly).
• Access to livestock water. Easily accessible water can make the project less costly; projects without access to water may require the contractor to haul water to the livestock.
• Other risks, like vandalism, toxic plants, or proximity to high-value landscaping may increase the cost.
• Multi-year contracts are typically cheaper on a per acre basis. Livestock and targeted grazing staff become more accustomed to a particular property (and therefore more efficient) if the contract is for multiple years.
• Headache factors – like free-roaming pet dogs or neighbors who object to livestock or livestock guardian dogs – can increase the cost of a project.

Landowners and managers should contact targeted grazing contractors well in advance of the desired project start date. Targeted grazing contractors are busiest during the spring and early summer months; scheduling these jobs typically occurs in during the prior fall and winter.

Final Word

Targeted grazing can be a highly effective way to reduce fuel loads, control invasive weeds, and manage ecologically sensitive landscapes. Livestock be an economical and eco-friendly way to manage vegetation on landscapes where equipment is impractical. For a list of local and regional targeted grazing contractors, click here!

If you are a targeted grazing contractor who does work in Placer, Nevada, Sutter or Yuba Counties, please email your information to me at dmacon@ucanr.edu. 

Registration is now open for several livestock-focused workshops offered by the University of California Cooperative Extension!

2019 Cattlemen's Symposium - March 20, 2019 (9am - 1pm)

Lincoln, CA

Co-sponsored by the Tahoe Cattlemen's Association, the 2019 Cattlemen's Symposium will feature presentations on Genetic Improvement in Beef Cattle by Dr. Alison VanEenennaam of UC Davis, Cattle Marketing and Added-Value Programs by Dr. Tina Saitone of UC Davis, Managing Cattle Health by Dr. Gaby Meier of the UC Davis School of Veterinary Medicine, and Managing Smutgrass on Irrigated Pasture by Josh Davy of UC Cooperative Extension.

The cost is just $15 per person and includes lunch! Register at http://ucanr.edu/2019cattlesymposium.

Livestock Protection Tools Field Day - March 29, 2019 (8:30am - 12pm)

Penn Valley, CA

Are you interested in learning about techniques for protecting your livestock from predators? Curious about nonlethal livestock protection tools but concerned about costs and effectiveness? Join UCCE for this hands-on field day. Our keynote speaker, Cat Urbigkit, operates a sheep and cattle ranch in western Wyoming. She'll share her experiences using livestock guardian dogs and other tools to protect livestock from wolves and other predators in extensive rangeland environments. The field day will also feature demonstrations of turbo-fladry, electric fencing systems, game cameras, low-cost GPS collars for livestock guardian dogs, and other tools. Wildlife Services specialists will cover preserving a livestock kill site, and George Edwards, executive director of the Montana Livestock Loss Board, will discuss compensation programs.

Please note: This field day is focused on on-the-ground solutions to predator losses in commercial ranching settings. The intended audience is commercial ranchers. We will be hosting a similar workshop for agency and nonprofit staff, as well as interested public, later in Spring 2019 – stay tuned for details.

No charge for this workshop! Please RSVP at http://ucanr.edu/livestockprotectiontoolsnevadaco

Electronic identification (EID) systems for livestock provide a number of potential advantages for producers, and new technology is making these systems more affordable. From an animal management and recordkeeping perspective, EID systems make tracking genetics, animal performance, and animal health easier and more robust. From a product perspective, EID systems can facilitate greater feedback on product quality from processors, as well as improved trace-back capabilities. But EID systems can be expensive. This post will help small-scale livestock producers consider the benefits and costs of adopting EID technology.

Our Old System

In my sheep operation, our previous record-keeping and animal identification system evolved over a number of years. Our ID system developed to facilitate the kinds of records we needed to make management decisions, track production, and market our lambs.

At lambing, each lamb received a small, brass ear tag. Rams and terminal lambs were tagged in the right ear. Potential replacement ewe lambs were tagged in the left ear. Down the road, this system allowed for a quick visual cue for sorting sheep. At lambing, we kept a handwritten journal, in which we recorded birth date, dam ID, birth type (single, twin, etc.), breeding group, and EZ Care score (the EZ Care score is used to evaluate ewes as well as potential replacement ewe lambs). These handwritten records were transferred to an Excel spreadsheet every evening during lambing. During this time, we noted any ewes that needed to be culled for reproductive or maternal reasons.

At weaning, we put visual identification tags (free USDA scrapie tags) in each lamb after we separated lambs from ewes. We hand recorded each tag number, matching with the brass lamb tag number. If a ewe lamb was going to be retained, we put a colored ear tag (associated with her breeding group) with the year of her birth in her other ear. We also hand-recorded the body condition score for each ewe. Since the tagging process could be somewhat lengthy (because we had to read each lamb tag), we generally brought the lambs back in a day or two later to give their weaning vaccinations.

During the course of the year, if we treated an individual animal with antibiotics or dewormer, we recorded her (or his) ear tag number in an online journal (using Facebook and Google Calendar), noting the appropriate withdrawal period. At shearing, flushing, breeding and pre-lambing vaccinations, we checked animals against an inventory list. While we never kept track, I suspect we have had a tag loss rate of about 3 percent per year. If we couldn't read the ewe's old lambing tag, we lost the data associated with her old number.  Finally, we collected individual body condition scores on a handwritten list at weaning, flushing and breeding.

When we marketed our lambs, we tried to remember to write down ear tag numbers. If we were direct marketing lambs with the help of Superior Farms, we would send processing instructions for each group by paint mark – red marks processed one way; blue marks another (for example). We sometimes received lot yield information from Superior Farms (mostly carcass weight and sometimes yield grade).

Why Change?

Even though our system wasn't perfect, it seemed to work. By keeping close track of the maternal traits measured in our EZ Care lambing system, we improved maternal ability and reduced lambing labor. We were able to track vaccinations and medications and ensure appropriate withdrawal times. Our Excel records seem to provide the management data we need for decision making purposes. So why change?

In 2017, USDA announced that it would no longer provide plastic scrapie tags for free. Being extremely frugal (okay, cheap!), I decided to look for other alternatives. Replicating our current system (brass lamb tag, scrapie tag and colored breeding group tag) would cost approximately $2.13 per head (not including lost tags). We started to evaluate other options.

Shearwell Data, a company from the UK, announced that its EID tags were approved for the USDA Scrapie Eradication Program[1]. As we looked into this option further, we discovered that these tags were reasonably priced ($1.03/tag in the quantities we needed). They came in different colors (which would allow us to use them for visually sorting our breeding groups), and they had a 99 percent retention rate (better than our old tags). This year at weaning, we started using Shearwell tags.

The decision to move to EID tags doesn't end with the purchase of the tags, however; we also needed to buy a reader. Several years ago, while working for a large-scale sheep outfit in Rio Vista, I used a Shearwell reader (which looked much like the scanners that UPS drivers use to track packages). The scanner worked reasonably well once it was set up to record the data we needed. Unfortunately, because tech support was in the UK, getting help during business hours was impossible. It also required the user to be very close to the sheep, which was difficult with some ewes. In talking with my friends at Emigh Livestock (also in Rio Vista), they suggested checking out a reader made by Gallagher. It would read the Shearwell tags, but they liked the user interface and wand-like construction better than the Shearwell reader. After seeing theirs in use, we went with the Gallagher HR5, at a cost of about $2,200.

With the Shearwell tags and the Gallagher reader, we can automatically collect all of the data we've been collecting by hand – and then some. We can record all of the lambing data we need to make marketing and retention decisions. We can mark a ewe for culling – and get an alarm on the reader the next time she comes into the sorting chute. We can add visual ID tag numbers in case we lose an EID tag. We can link a ewe's ID to her lamb's. And when we're done with a working session, we can download all of this data into an Excel spreadsheet. The reader also connects via Bluetooth to our smart phones.

The New System

Our new system will reduce both labor and the direct costs associated with ear tags and livestock identification. Because the Shearwell tags are smaller (and more likely to stay in) than our old scrapie tags, we'll use these tags at birth (instead of the brass lamb tags). We'll record ewe and lamb information with the reader, which will automatically populate our Excel spreadsheets. At this point, we can also mark a ewe to cull (which will give us an alarm every subsequent time we scan that ewe). Since the lambs will already have their permanent tag, we won't need to bring them in twice at weaning – we can wean and vaccinate all in one session. Using the reader, we can also automatically include withdrawal times for any treatments or vaccinations we administer, which will give us a warning if those animals are scanned again (at shipping, for example) – no more checking numbers against a written list (and no more clipboards in the corrals). Because we're using different colors for each breeding group, we'll still be able to sort into breeding groups visually (instead of having to scan ear tags). We'll collect individual body condition scores at weaning, flushing and breeding – allowing us to track and analyze the nutritional status individual ewes (as well as breeding groups). When we sell lambs to Superior Farms, we'll get detailed carcass data back on each lamb. Since we won't need someone dedicated to writing information at weaning, flushing and breeding, we can get by with less labor at these key times.

But What About the Cost?!

The cost of the entire system is significant. We could have decided to use the EID tags (simply to get carcass data) and not purchase the reader, but we think the reader will offer enough labor savings and additional data management benefit to justify the expense. Just to be certain, however, I have analyzed the investment in more detail, looking at both a simple payback period and the net present value of the investment.

A simple payback period is calculated by dividing the initial investment by the net increase in revenue resulting from the purchase. The net present value analysis accounts for the time value of money – it is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. The discount rate is used to reflect the potential for inflation or other risk to diminish the future value of that income stream.

I estimate that the new system will save us over $500 in labor each year (less time at lambing and weaning – and less time generally tracking inventory). We'll also save a bit of money in ear tags (buying one tag instead of 3 for each animal). The net revenue increase per year, then, is around $606.50. I assume the reader will have a useful life of 15 years, with no salvage value (that is, nobody will want to buy it when we're done it it).

Based on a purchase price for the reader of $2,200, here's what my analysis shows:

• Simple Payback Period ($2,200 ÷ $606.50) = 3.6 years. This means we can pay back this purchase in less than 4 years.
• Net Present Value (Discount Rate = 5%, 15 year useful life) = $2,098. This means the $2,200 investment we made this year will add nearly $2,100 to our bottom line in today's dollars over the lifetime of the reader!

These analyses do not account for the improvements we should be able to make in carcass quality through better genetic selection, nor the ability to provide our customers with traceback opportunities. And I'm sure there are other management benefits I haven't considered!

Investing in this technology today gives us new potential opportunities down the road, too. Flock management software, based on these EID tags, may give us even more savings and/or added revenue. In an ever tightening agricultural labor market, automated weighing and handling systems may allow us to continue to raise sheep with no outside labor. And I suspect there are new applications being developed!

Even small-scale operations like ours should make decisions on management systems, equipment, and technology based on economics. The decision to implement an EID system, at this stage, seems economically sound. We'll continue to track the costs and benefits as we fully implement the system.

[1] All sheep and goats over 18 months of age must have a USDA-approved scrapie ear tag when they are sold. Most auction yards require scrapie tags regardless of the animal's age.