Is It “Farm to Fork” or “Fork the Farmer?”
I know that many of you are involved in direct-marketing of your beef through means such as an on-farm stand or at the local, seasonal, farmers markets. I wonder if you get comments and questions from your customers that go something like this; “I wish I could find your meat on the menu of some of our local restaurants” or “I wish I knew more about where the meat comes from when I eat out. Do you sell to any local restaurants?” or “Why don’t you sell to the local “farm to fork” restaurants?” and so on.
Like so many simple questions, the answer is not quite as simple as one might think. After all, there has been a major, and probably well-intentioned, promotional push by local economic development agencies and other advocacy groups to try and link-up local farmers and growers with local restaurants under the banner of “Farm to Fork” or the larger “Eat Local” and “Locovore” movement.
There are many and varied motivations for this effort like reducing the “transportation (carbon) footprint” related to food procurement, improving consumer “health”, enhancing the viability of local farms, moving toward “sustainability” in the food system (insert your definition of that here), improving food quality and food safety, eating “fresh”, enhancing consumer perception of farmers, “saving” the Chesapeake Bay, preventing global warming, saving Polar Bears; OK, I’m getting carried away.
My point is that sound-bites sound nice but are often not supported in fact or in reality. Let me give you an example. Some time ago we at Hedgeapple Farm had a visit by a young lady who was hired (on a contract basis) to energize the “farm to fork efforts” in Frederick County. She was being paid to convince farmers that it was somehow in their best interest to sell their home-grown farm products to local-area restaurants (especially during restaurant week) so as to enhance their farms’ exposure to consumers and hence their profitability and sustainability. Lots of glitz and glamor when you see your farm name on such and so restaurant with their
5-star chef. “That will certainly drive customers to your farm market.” Maybe yes; maybe no. Seems hard to tell and even harder to measure. But, results don’t really matter when your contract salary is fixed and does not depend in any way, shape, or form on the actual results of the program you are selling. Just dazzle the farmer with, well you know, the stuff our bulls produce and get them to agree to sell their products to the local chefs.
Now before I hear cries of outrage, please understand that I love and respect chefs and the very hard work they do, in a very competitive environment, to provide exceptional dining opportunities to their patrons. There is no question in my mind that if you give a 5-star chef a 5-star product to work with, the result will be a 10- star dining experience. I also know that just about every chef and restaurant owner is faced with very difficult financial and economic decisions every day as they plan their menu offerings.
I have often heard that chefs and restaurant owners use something called “The 30% Rule” as they look at their purchasing options and menu decisions. That rule goes something like this (more or less); a chef works hard to pay no more that 30% of the advertised menu price for the center-of-the-plate protein on the front-end purchase of that protein. Remember that they still have to add at least a starch to the plate and have server
costs, overhead, and other expenses to cover through their menu prices. Here is an example; Let’s say restaurant X offers a 16 ounce New York Strip Steak as a menu option at $25.00. Applying the 30% guideline, that chef would seek to purchase that strip steak for no more than $7.50 regardless of the source (local farmer, provisioning company, Sam’s Club, Costco etc.).
Now knowing this, you are reasonably obligated to decide if you can profitably offer your NY Strip Steaks, which probably sell for between $15.95 to $19.95/lb. to your local customers, to a restaurant for half that price at wholesale. And, even further (now venturing into some knowledge that is often lacking with many small, local, part-time farmers) what is your actual cost of production on that NY Strip steak? Does $7.50 even represent any profit for you? If not, does the “glitz and glamour” balance off the loss? Are you investing in some sort of advertising that will pay dividends later in the form of more customers coming to the farm and paying the regular price? Maybe and maybe not. Hard to measure for sure.
In addition, most chefs are demanding and may not order on a consistent or predictable basis. And, working with local restaurants requires a willingness to provide an adequate volume of specific specialty cuts, generally the higher-end cuts, which are easily sold in other ways at greater profit. So, if you sell your “premium cuts” (like the middle meat steaks and specialty cuts, not ground beef) at wholesale, what does that do to your inventory of product left at the farm? Is this scheme ever economically sustainable for the farmer?
In addition, you will be hard-pressed to find any restaurants/chefs willing to accept only a seasonal supply of your products, especially the menu mainstays like steaks. Couple this with the fact that the true costs for producing beef “off-season”, especially of the grass-fed and finished variety, are extremely high and generally unprofitable for producers unless adequate high-quality, stored forage can be harvested on-farm in a cost- effective manner. Most small to mid-sized farms are incapable of this if the true cost is understood and accounted for.
Listen, there is no way a local, small-scale farm can compete with the Midwest feedlots and larger cattle operations on price and we should not have to. In most cases we produce value-added specialty products that come with a higher cost of production, lower volume and limited (or even seasonal) availability. There is just no way we can or should try to compete with the “commodity giants” that deliver their wholesale products to restaurants on semi-trucks every single day. That is not our niche and no glitz and glamor can change that fact.
Remember the person who visited the farm with her smoke and mirror pitch? I asked her if she had considered asking the restaurant folks if they would be willing to raise their menu prices for the local items to be able to pay a fairer price to the farmers. I figured this would also provide a good indicator of the patrons commitment to “put their money where their mouth is”, so to say. The question insulted her!
So I have to ask; why is it always the farmer who is supposed to concede? Maybe it’s because many small or even mid-sized beef producers don’t know first-hand, with precision, what it costs to put a pound of beef in the meat case. But, that knowledge is critical as it will drive almost all of your business-related decisions, as it should be if you endeavor to achieve economic and environmental sustainability. That is just the cold, hard reality of the business of, well, everything that is business! How’s that for a simple answer? Happy local eating!