For some area beef producers, market and production forces are driving up the costs of producing beef, compounding the effects of tariffs and meatpacking lawsuits on consumer prices.
“People want to know where their food is coming from,” says Jared Patterson of Patterson Pastures in Ramah. This sparked more direct-to-consumer sales from smaller ranchers. Since he started his grain-finished wholesale operation in 2015, he’s had no shortage of customers. Many other farmers agree that the most reliable consumer base has been individuals and families in the local community.
Sam and Will Frost operate Frost Livestock Co. in Fountain. Most of their retail cuts are sold at the Colorado Farm and Art and Southeast farmers markets in Colorado Springs. Retail cuts have the highest profit margin, they say, but wholesale is more efficient and predictable. They typically set prices between small and large producer equivalents at large grocery store chains.
“If we priced our beef in a way that reflected time and labor, it would not sell. It would be $100 a pound.”
Sam Frost, Frost Livestock Co., Fountain
“If we priced our beef in a way that [reflected time and labor], it would not sell,” Sam Frost says. “It would be $100 a pound.”
Fine-dining restaurants are another market. Doug Wiley operates Larga Vista Ranch near Boone and Avondale. He used to sell to several restaurants in Colorado Springs but is now exclusively selling his product direct-to-consumer.
“The hard part is chefs come and go,” he says. “You’ve got to have this planned out a couple years in advance, and then when the animal is ready, the chef leaves … and they don’t want your meat now.”
In addition to selling at Colorado Farm and Art Market during the summer, Wiley runs weekly pickups at his ranch and at Bread & Butter Neighborhood Market in Colorado Springs.
Institutional buyers such as schools or grocery stores are a difficult market for small-to-medium producers. They pose volume challenges and, for many farms and ranches, aren’t worth the financial and bureaucratic hurdles.
According to Chad Franke, Rocky Mountain Farmers Union president, small farms and processors use aggregation to enter larger markets, including restaurants. He cites Innovative Foods in Denver and Scanga Meat Co. in Salida as examples of multiple producers joining together and creating one larger supplier.
Mike Callicrate operates a ranch, feedlot and processing plant in eastern Kansas along with Ranch Foods Direct retail stores in Colorado Springs. The vertical integration allows him to buy animals and beef from other ranchers to sell to local grocers and restaurants. He’s sold to institutions like schools previously but has lost those contracts due to multiple factors, including federal funding cuts.
On the production side, climate and drought drive costs. Ranchers with less pasture and water access must purchase feed for their cattle. Crop losses and higher fuel costs have driven up hay and grain costs. Farmers with irrigated land that grass-finish beef, like Wiley and the Frosts, have seen less impact on feed costs, but water and changes in climate such as heat waves remain a concern.
The Frosts are experimenting with different plant combinations and practices to improve soil quality and create more resilient pasture for grazing, reducing the need to purchase feed. Wiley has reduced his herd size to suit his land’s ecological constraints, resulting in less beef produced.
Cattle prices are also an issue. Ranchers can sell live cattle at auction to other ranchers for their herds instead of processing into beef. During the pandemic, cattle numbers fell dramatically, raising the price, and have been slow to recover. Prices for live cattle have remained elevated since then. At his processing plant, Callicrate has seen a large drop in custom meat processing orders from small independent farmers due to selling live cattle instead of producing beef.
Over the past five to six years, these high cattle prices combined with rising processing costs have incentivized live cattle sales.
Blue Ribbon Processing
+20% (2 yrs)
Frost Total Processing Fees
+66% (5 yrs)
Simla Frozen Food Locker
+38% (since 2021)
Callicrate Processing Fees
+20% (5 yrs)
When ranchers take cattle to a processing plant, they incur a slaughter and processing fee. The beef processing rate at Blue Ribbon Processing in Fowler, where Frost Livestock processes, has increased 20% in the past two years. Over the past five years, Frost reports that total processing-related fees for his business have increased 66%. Simla Frozen Food Locker’s processing rate, where Patterson processes, has increased fees 38% since 2021. Callicrate raised his processing fees 20% over the last five years.
Callicrate says additional rules and tracking requirements for USDA certification contribute to higher processing fees.