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Costs and Returns for Pasture-Raised Beef in the Northeast

by Dr. John Comerford

Emily Steinberg, a graduate student in the Department of Dairy and Animal Science at Penn State, recently completed a summary of a survey among 26 pasture-raised beef producers in Pennsylvania, Maryland and New York. The results of the survey point out some of the challenges the producers face in producing and marketing pasture-raised beef and being profitable.

The farms varied greatly in size, from 10 to 200 acres devoted to pasture-raised beef production, with an average of 25 head marketed annually. The estimated cost of production highlighted one of the major issues faced by these producers—it costs more to produce pasture-raised beef than grain-fed beef. The average cost to produce a finished pasture-raised animal was $2,066.32, and the returns were less than the cost of production by almost $200 (Table 1). Based on the average harvest weight and a dressing percentage of 60 percent (Tables 2 and Table 3), this indicates the breakeven value of a carcass was $3.15 per pound. However, nearly one-third of these producers were profitable. What were the differences that made farms profitable for pasture-raised beef production?

The greatest single cost for the enterprise is land. The cost structure for grain-fed beef is usually the price of corn, while for pasture-raised beef it is the price of land. There are other costs to consider as well. Net returns to land were a small $17 per acre (Table 1), so costs for equipment, winter feed and fencing were significant factors of profitability, while the price received for the product was not. This indicated to me controlling costs by producing more product on an acre of land, reducing wintering costs by marketing prior to a second winter feeding period, and being careful how many tractors were on the farm are more important than raising the price of the product.

The great challenge for many pasture-beef producers is getting more production on an acre of land. There are many things that will contribute to this result, including the genetics of the animals, their health, the forage quality and availability and the desired harvest endpoint. Producers surveyed indicated breed and frame size were the most important factors of animal selection, and final fat thickness was one of the most important factors of harvest endpoint. Steinberg also wrote a thesis that described the results of a pasture-raised beef experiment that evaluated some of these factors on consumer evaluations of the final product. She found fat thickness from 0.25 to 0.4 inches, frame size from 3 to 6, and final weight from 900 to 1,200 pounds were not related to consumer values for taste, tenderness and overall desirability of cooked steaks for cattle that were harvested at the same age. The constraints producers impose on themselves for frame size and fat endpoints may not be all that important to the customer, so feeding cattle that will grow fast, be healthy, have plenty of quality forage available every day, and get harvested prior to a second winter of feeding are probably more important.

We still have little research available to document improvement of pasture-beef. There are no unbiased studies available to show if breed has an effect on consumer preference, but many studies have shown it has no effect on grain-fed beef fed under the same conditions. Steinberg’s study indicated this may be true for pasture-fed beef as well. We do know animal age will be a factor in tenderness, but what is the age threshold for tenderness in pasture-beef? We know grain-fed beef at a quality grade of mid-choice or higher will have a higher consumer acceptability rate, but is this true for pasture-fed beef ?

This study is one of the first of many that are needed to document a profitable protocol for pasture-beef production, but it does provide some important factors to consider. If the pasture-fed beef enterprise is to ever emerge from the “niche” category and appeal to a wider consumer base, we need to know more.

Dr. John Comerford is associate professor of dairy and animal science at the Pennsylvania State University.