Colorado rancher scrambling to sell beef directly faces high regulatory hurdles

Colorado ranchers are struggling to find ways to survive the downturn in beef prices caused by the nationwide shutdown of restaurants due to the COVID19 pandemic. Both reduced demand and slaughtering plant shutdowns have caused the price offered cattle growers to plummet by more than 35%, and ranchers are facing economic ruin. Rafe Schroder, 29, owner of Schroder Ag in Campo, a tiny town in the southeast corner of the state is trying to market his cattle direct to consumers in order to survive the shutdown. The beef market is complex and burdened with regulations that make it all but impossible for individual ranchers to sell their own meat at retail. The biggest impediment is federal law, which makes it illegal for a livestock grower to cut and pack his own meat and sell it to retail stores. In order to sell packaged meat to grocery stores it must be inspected by the U.S. Department of Agriculture (USDA) at the time of slaughter to ensure that sick or diseased animals don’t enter the food chain. The “Wholesome Meat Act” of 1967 changed the way packaged meat is handled nationwide. The Act says, “It is essential in the public interest that the health and welfare of consumers be protected by assuring that meat and meat products distributed to them are wholesome, not adulterated, properly marked, labeled and packaged.”...The problem for cow-calf growing operations like Schroder’s is that cattle-raising is time sensitive. Past a certain point in their growth, slaughter cattle begin to lose value to the rancher. “This is where it all starts. The calves are born on a ranch,” Schroder told Complete Colorado in an interview last week. “Normally the calves are 500 to 600 pounds when they come off the cow.” At 800 to 900 pounds yearling cows are ready to be sent to a feedlot, where the operators fatten them up to their slaughter weight of 1,300 to 1,500 pounds. “You’ve got your cow-calf, from 0 to 600 pounds, your growers from 600 to 800, then your finishers from 800 all the way to fat cattle, which is 1300 to 1500 pounds depending on what kind of cattle you’re raising,” said Schroder. “The feed lots are highly efficient, they do an excellent job. They can feed cattle more efficiently than we can by a long shot.” Schroder says that due to the lack of demand and plant shutdowns some of his cows are going beyond their optimum feedlot weight. Feedlots are in the business of selling feed, says Schroder. This means that they are selective about which cattle they are willing to take on. “They’re going to offer you less for older cattle that you’ve waited too long to bring to them because they won’t make as much money on feed,” Schroder said. “Would you rather get one set of cattle and feed them for six months? Or would you rather get one set of cattle and have the same sort of startup costs and then feed them for three months?”...Schroder thinks that selling meat on his own is the only way to salvage his operation. But the rules make that difficult and are complex. He has set up more than a dozen appointments with butchers across the region to slaughter and package meat for him through the summer, which he hopes to sell through word-of-mouth and online. The problem is he can’t sell packaged meat at retail or wholesale to grocery stores unless it’s been packaged in a USDA-inspected butchery. Non-USDA butchers can slaughter and package meat, but only by what Schroder calls “private treaty,” which is when someone buys a cow, or part of a cow, from him under a contract for him to raise, slaughter and pack the meat. This means a substantial outlay by the customer for a bulk quantity of meat rather than being able to buy two pounds of hamburger or a package of steaks from the grocery store. Federal regulations allow states to take on the burden of inspecting meat processing if their system is at least as strict as the USDA requirements. But despite a history of cattle raising going back to before it became a state in 1876, Colorado still does not have its own meat inspection system that would open up wholesale and retail sales to state-inspected butcheries, including those created by the livestock growers...MORE