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Keeping Dollars in the Community with Direct Farm Sales
723 Plays3 years ago
In this episode of the Direct Farm Podcast, we chat with Valarie & Jared Luhman of Grass Fed Cattle Company about the the benefits of selling direct market and the profits gained from transitioning away from selling at sales barns.
Grass Fed Cattle Company is a grass fed Protein Farm located in Goodhue, MN that provides their neighboring communities with high-quality, honest, affordable, and delicious grass fed beef and pastured chicken and pork.
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Transcript
Introduction to Direct Farm Podcast
00:00:03
Speaker
Welcome to the Direct Farm podcast, the go-to resource for farms across the US looking to grow and manage their business. Tune in weekly to hear tips and tactics from our most successful farmers on how to increase sales, access more customers, and save time and money. We'll also speak with industry experts, business leaders, and partners to share the latest farm business trends selling direct to market.
00:00:27
Speaker
Welcome to the direct farm podcast. I'm Rory, your host for today's episode.
Meet the Lumens: Minnesota Farmers
00:00:31
Speaker
We've got a great conversation for you today with a member of our farm advisor network, Valerie Lumen of grass fed Calico and her husband, Jared Lumen, who own and operate their farm in Eastern Minnesota. Welcome Valerie and Jared. It's great to finally have you on the podcast.
00:00:45
Speaker
Yeah, thanks so much. We're excited to be here.
A Century-Old Farm with Modern Practices
00:00:48
Speaker
To start out, could you guys maybe just kind of introduce your farm, tell us a little bit about how you got into selling your beef direct to market? Yeah, so we are farming here on my family's farm that we've been on for over a century. I don't really know the history.
00:01:04
Speaker
entirely but my dad and I when I came home from college had kind of a conversation about what do we enjoy, what do we love, and what do we want the future of this farm to look like and we both kind of came to the conclusion that grazing is a big piece of it. Soil health is something that we've learned a lot about and the more we learn about it the more we realize really there's nothing better than perennial pastures with well-managed livestock grazing it to build soils and also just the lifestyle of that kind of a farm business is enjoyable so
00:01:31
Speaker
as we kind of tried to put together how we want to make a business around that in a piece of the country that's largely row crop farm land at cordon soybeans and maybe some alfalfa as i look out my windows pretty much all i see we realized that probably just selling a commodity beef in this place wouldn't work and so we've always focused on trying to sell things that are premium dead
The Grass-fed Cattle Company
00:01:52
Speaker
For the last 14 or 15 years, we've sold bulls. We have a registered Red Angus herd, about 220 cows. We sell bulls through Ferro Cattle Company. And then we also sell grass-fed beef through our brand Grass-fed Cattle Company. And Val can talk a little more about that too.
00:02:06
Speaker
Sure. Yeah. We actually have a couple other farms that we sell their meat through grass-fed cattle company too, but we finish some of the animals ourselves and we have pickup in the twin cities and delivery as well. And then we raise a pasture chicken and give a pig farmer that we sell pasture pork from as well. So we love that it compliments the farm and just gives us another way to sell some of our beef so that we don't have to rely on commodity pricing for it.
00:02:34
Speaker
Yeah. Yeah. Yeah. That's really great. Well, and Jared, you talked about like differentiating yourself a bit from kind of the other common Ag industries that are around you guys, but what other factors can maybe kind of went into your consideration that ended up with you guys deciding to sell your beef direct to market?
00:02:50
Speaker
Yeah. Yeah. No, there's a lot of factors to consider. First of all, is do we have markets close by, which we're fortunate to be in a portion of the state and the country that is pretty well populated. We've got a 16,000 person population, 10 miles from home, a hundred or a couple of hundred thousand in Rochester, 45 minutes from home. And then we have the twin cities, which has a few million people just an hour from home. So we were fortunate to have kind of a market surrounding
Advantages of Direct Farm Sales
00:03:14
Speaker
us.
00:03:14
Speaker
that we don't need to deal with shipping and all that stuff. And then another factor obviously when considering if this is something you can do is do you know how to raise the right quality product? And my dad has been grazing for decades since I think the late 1980s. He went to New Zealand and learned a lot about grazing there in an eight-month trip there and brought that home. And so we've got history on our family of
00:03:35
Speaker
doing this well that I've been able to learn from so we know we can raise a good product. We know we've got to market and then I think probably one of the last and better factors was marrying the right person here sitting next to me who enjoys and does well with people and marketing and really set us up well to go down the direct marketing route at our farm.
00:03:53
Speaker
Yeah, that certainly helps. Derek was already doing direct marketing before. Well, I mean, we had met, but I was not helping with it at all. So, but I think we both have a passion for it. We love to talk to people, educate on what we do and all of that. So that was definitely a factor too.
00:04:11
Speaker
Yeah. I know it definitely helps having somebody on either side to have a partner through that.
Comparing Sale Barns and Direct Marketing
00:04:17
Speaker
So I think something we really wanted to focus on today was kind of talking about the differences between selling the market and selling maybe the more traditional route, like using a sale barn or something along those lines. So for somebody that might not know what is the sale barn and what is that kind of path to marketing and selling beef?
00:04:34
Speaker
Yeah, yeah, so it's the easiest probably way to market beef. Most communities in our area within 40 miles, I can think of three or four sale barns that we have. And so we have this market that essentially you can bring any livestock that you have, be it a calf,
00:04:51
Speaker
be it a yearling stock or background or type weight or a finished animal or a call cow or something, you can bring almost any livestock, class of livestock that you have to the sale barn and sell it that day and get paid for it based on whatever the commodity market values it at.
00:05:07
Speaker
And so there's obviously a real plus to that and that it's simple, but the obvious downside to that is you have very little control over the actual sale price or the market. I was just listening to a podcast the other day that was talking about one person that had brought some animals into a sale bar or this person was the buyer. And somebody had brought a load of livestock in late in the sale and all of the big buyers had left.
00:05:30
Speaker
that time and we're already at the restaurant or whatever and left the sale barn and they got totally kind of hammered on the price because they just got there at the wrong time. And so, I mean, there's very little control we have over the market and the price that we get for our animals when we bring them to the sales barn. So that obviously kind of contrasts to the direct marketing where you within reason get to set whatever price you want for your product.
00:05:54
Speaker
Obviously the ease of just being able to bring your livestock to the sale barn and kind of be done with it after that. Are there any other kind of advantages that people really like about using that sale barn route? I mean, I think having them, if you have a large group of animals finished at the same time, then you can sell them all at once. And then the processing is kind of off your hands then too, which I think would probably be a big deal for a lot of folks.
00:06:20
Speaker
Yes, yeah. And I think for a lot of farmers too, they may not have the desire to raise the animal past weaning either. If you're a cow calf producer and you want to raise a calf till 500 pounds or 600 pounds in the fall, you wean it. They want that to be the end of their piece in that calf's life anyway. And so you can sell a weaned calf at the sales barn without having to worry about
00:06:41
Speaker
finishing it out, whereas if you're direct marketing, there's not very much of a direct-to-consumer market where here's an animal, you can feed it in your backyard until it's ready to go. So for the producer who doesn't want to participate in that whole production chain from birth to finishing, that's a great way to market the animal as well.
00:06:59
Speaker
Yeah, obviously grass fed cattle code is selling direct to market now, but have either of you had any experience either working on another farm or doing this yourselves in terms of going to the sale barn and selling using that market channel? Yeah, growing up, I owned a small herd of my own. So we would sell those at the sales barn. My family doesn't do a lot of that anymore, but I have in the past.
00:07:20
Speaker
And my family's probably history up until about 30 years ago was largely commodity agriculture and selling everything in that route. And we actually still do to this day use it to some extent. We try to minimize it. That's always been a goal here is anything that we can sell with some sort of a value add, we're gonna try and do. So our best bull calves we sell as seed stock and bulls to cow calf producers around the country. Our heifers, we give every heifer a chance to get bread.
00:07:48
Speaker
Because we want to let nature select the heifers that are best for our herd and the ones that don't fit our herd. Those are the ones that we use to grass finish our open heifers and so we grass finish those and we direct market those really the only thing at this point that we sell through the sales barn.
00:08:03
Speaker
is a few cull cows and there's a couple cull cows a year that we can't sell either. They come up open or whatever and we don't have a market for enough ground beef yet to do that. We're working on that. That'd be great to be able to have a ground beef market for cull cows and then the bull calves that aren't good enough to be
00:08:18
Speaker
bulls. And the reason we like to sell those the sales barn I guess is of any class of livestock on our farm of bull calves, heifer calves, yearling heifers, bred heifers, cows, that is probably the highest value we can get on the commodity market is for a small steer calf or a small bull calf. That's probably the highest valued animal on the commodity market. So if we're going to sell anything through a sales barn, we've chosen to sell that one because it's the highest value, but so we use it limitedly.
00:08:46
Speaker
Yeah, that makes sense. So I'm curious too, you obviously have experience using or selling at a sale barn. Did you ever consider, considered that being your main market channel for grass-fed cattleco?
00:08:58
Speaker
Well, for grass-fed cattle company, probably not. The branding around grass-fed cattle company is grass-finished beef. And there's really, you would get docked really hard, probably at the sales barn. If you tried selling grass-finished beef, it's more labor intensive. It takes longer to finish the animal on grass. And so marketing grass-fed beef through the sales barn never was probably going to be a big fit. Is it something we want to sell? Do we want to sell more animals through the sales barn?
00:09:22
Speaker
just because of the ease and simplicity in this area and the northern upper Midwest with our winter feed costs
Community Impact of Direct Marketing
00:09:29
Speaker
being high. That's probably getting into more of the production side. It's very expensive to keep a cow through a year and to sell beef as a commodity up here would be probably not very profitable, if at all.
00:09:42
Speaker
No, and that's important. I mean, you obviously have to look at it that way too. Cause I know a lot of beef farmers, especially art, they can year over year we'll lose money. And so making sure you're kind of taking all that into account is really important. We've talked about the ability to set your own price when you sell direct and how that is a little bit more determined. I was curious, could you give an estimate about of what those kinds of differences could be in price alone between selling at the sale bar or selling direct to consumer?
00:10:06
Speaker
Yeah. Yeah. Just before this, Google the stat that I always think is an interesting one thrown around and that's like what percentage of the average dollar a consumer spend goes to the actual farmer. And I guess the latest stat was 14.6%. So out of every dollar spent 14.6 cents goes to the farmer when you're selling a commodity. And so.
00:10:26
Speaker
When you throw that number out there, that's not very much going to the farmer and direct marketing a huge difference. The actual end product may be worth about the same. If not more, we probably sell for more than the average commodity, even grass finished beef, but the percentage that we get to keep at our farm is weighed.
00:10:42
Speaker
better and then the other cool piece of that too is say you know if we sell beef through a commodity market and it gets bought by a cattle buyer that sends it to a feedlot in Nebraska and it gets processed at a big plant in Colorado or something I mean the consumer buys it somewhere else all those dollars along the way are leaving your community only 14.6 percent or 14.6 cents out of every dollar actually stays in the community where the animal started being produced but by direct marketing
00:11:09
Speaker
Even if we're not capturing 100% of that, the dollar that's spent on the transportation goes to a local guy with a fifth wheel trailer hauling cattle for his neighbors. And it goes to the money that's spent on the processing piece of that goes to the local processor in our case in Cannon Falls that supports local families and things like that. And then we ship it from there in a freezer truck to our other place. And it goes to the local freezer truck company. And so it's really just, I think a cool community.
00:11:35
Speaker
factor when you consider how much more money stays in the community and in the farmer's pocket when you're direct marketing. Yeah. That's a really great point. Cause I think obviously buying local and supporting local businesses is such a common trend. And I don't know if people always associate their food with that same trend, but with that.
00:11:52
Speaker
system alone with that supply chain alone, you kind of have to intertwine a whole bunch of local businesses to make that work. That's a really great point. So you talked about like that percentage. How does pricing at the sale barn work? I know you also mentioned that story of somebody showing up at the wrong time and then they get a worse price. How does pricing kind of work at the sale barn?
00:12:10
Speaker
Yeah, well there's a ton of factors that go into that because it's a commodity it's it's kind of like a global economy, essentially when you start competing in a sale barn and the definition of commodity is like product that is differentiable from anything else and so
00:12:26
Speaker
when you sell into that you're competing with all of the rest of the world that's able to produce a product so it's going to be impacted by the largely the drought in the southwest right now is a huge factor in prices and bringing the price right now for commodity beef up because there's a lot less supply there's you know factors like
00:12:42
Speaker
the whole Russia and Ukraine thing. And there's, you know, the Australia had a huge drought for many years and they're a large beef producer. I mean, when you're in a commodity business, you have so much less control over the price that it is paid for your product ultimately comes down to supply and demand. And those obviously supply and demand are affected by a whole bunch of different factors like weather and politics and personal preference and trends and things like that. But very little that the farmer has any control over. And what buyers are available and. Yeah.
00:13:12
Speaker
What sales barn you choose that all of those are factors too. And there are some ways that the producer can control price by maybe selecting genetics that have better carcass weights or carcass traits rather than just selling the live animals, essentially selling where the price is selected after slaughter. And if you have animals that have higher quality meat, they can get paid slightly more.
00:13:33
Speaker
Overall, there's very little percent that the producer can play in their price selection. How frequently will those prices change? Is it daily? Is it throughout the day? I guess you did mention somebody showing up and getting a later price later in the day.
00:13:50
Speaker
hour to hour. There's another person I remember who he talks about the story. I think that was either Gordon Hazard or Wally Olson or something. He talks about a story of he bought a load of cattle at the beginning of a sale. And by the end of the sale, the same weight that he was buying was worth significantly more. So he went to the back and told him, run them through the sale barn again. And he sold them that same day because the price had gone up throughout the sale. And so it's, yeah, it's hard to make a really educated business decision when you have no idea what the market will be. I mean, you can obviously.
00:14:20
Speaker
account for large-scale trends and weather conditions and stuff. But yeah, it can change very quickly and it may not change either for a while. Yeah. Well, and again, I guess as we kind of highlighted at the start, there still is that added benefit as much as that does fluctuate and as much as that is a risk, there's that benefit of the ease of it, I guess. What are some of the maybe resistances that cattle farmers might have to transitioning from selling at the sale barn to then switching to that direct to consumer model?
00:14:48
Speaker
I think the biggest
The Logistics of Direct Marketing
00:14:49
Speaker
one that comes to mind is just the time that it takes to, I mean, if you're starting out, get pre-orders for the beef that you will have available and getting a large enough group of people to pre-order the beef that you have ready. I think that's one of the biggest factors people consider is that they have one group and they're going to be ready.
00:15:08
Speaker
relatively at the same time. And sometimes our customers aren't ready to buy all at the same time. So I think that's definitely one factor. Yeah. Resistance. I mean, there's so many different challenges that you don't have to deal with when you sell on a commodity or to a sale barn. I mean,
00:15:23
Speaker
the system that we've chosen involves every pound of beef going through our freezer space and being boxed separately. So in our particular situation, if you don't have a freezer infrastructure to keep up with the meat you have, and you don't have the trucking infrastructure, you don't have the marketing infrastructure, I mean, it can be a real challenge and resistance. And again, knowing yourself, if you don't have the personality type to deal with this or want to deal with this, then that's a pretty big resistance factor too. So for sure, there's a lot of
00:15:50
Speaker
considerations. Well, so yeah, you mentioned all those challenges. And I guess that kind of just like begs the question, I guess, what are like the one or two primary reasons that you guys chose to sell direct to consumer instead of going that route with less friction, I guess.
00:16:05
Speaker
Jared mentioned that if we sold our grass-finished beef at the sales barn, we might get docked. We wouldn't necessarily get docked for them being grass-finished, but we definitely wouldn't get a premium at all for how we're raising them. So by us going out and finding the customers that appreciate and want to support a farm that are raising grass-finished cattle, we can obviously get the premium for that by doing the marketing ourselves. So I think that's one of the big reasons. Another is that we, I mean, we enjoy
00:16:33
Speaker
The farm, we want to share it with people and connect people to where their food is coming from. We just finished a farm event a little less than a month ago here. And it was just so cool to see everybody appreciate the land and take in the beauty of what we get to enjoy and just connect again with where their food is coming from. So I think there are lots of reasons why we choose to do it, but those are a few of the big ones.
00:16:55
Speaker
And then yeah, in choosing the direct to market and doing this all on your own, like Jared, you mentioned freezer space. And then obviously we've talked a lot about marketing, but what are some of those factors that people should be aware of? If this is something, a shift that they're thinking of making, I think Valerie, you could definitely speak to all the different areas of marketing. Like we say the word marketing, but that can encompass a lot.
00:17:15
Speaker
Yeah. Yeah. Well, Val can talk more about like the, I guess you'd call it technological infrastructure that we use, like between websites, email, social, all that stuff. She's the driving force behind all that. But I think to myself as a farmer, and Val mentioned that I was direct marketing before she came around and I did, if you had a year, it was not a big deal and it was a very low input type model. But
00:17:38
Speaker
When I think about the way we're doing it now, if I knew what we're doing now, you definitely have to account for the labor piece of it. If I was farming full time, which I was doing, working at time, producing, producing is a job in and of itself, the livestock. When you get into really into marketing,
00:17:55
Speaker
You have to have the labor piece available to do the work after that animal is butchered to get it boxed, to get it up on the website, inventory managed to post on social media, to communicate with customers, to deal with issues that might come up. And that's a labor is a big piece of it. But Val, I don't know if you want to talk about some of the factors and it gets the social or technological infrastructure that we use that people should consider.
Building Customer Connections with Storytelling
00:18:17
Speaker
Yeah, I'd love to. I think before that though, is making sure that you have a high quality product because before you go into all of the pieces of social and email and marketing, if you don't feel confident in the product that you're selling and the end results of what your customers are going to put into their mouths and in the family's mouth.
00:18:37
Speaker
that I don't know if it's worth it. So make sure you have a high quality product that you're confident selling and you're confident consuming yourself too. And then after that, I think it's all about telling your story through as many channels as you can manage. The biggest piece is just
00:18:52
Speaker
Obviously finding some customers who believe in you, who want to support your farm and the practices that you're choosing. We were lucky enough to have some customers from Jared and the business that he started. And then we actually purchased grass-fed cattle co from another couple who started it. So they had customers already on their list, but we've added lots since then more than doubled and we've done events and.
00:19:17
Speaker
found people online, lots of places where we found customers and sign them up for our email. We try to get an email out once a week and just communicate with our customers. Let them know what we have available, sometimes provide a promo code or things like that. And you do all that through Mailchimp.
00:19:34
Speaker
And then social media, just sending out pictures, stories, making a few reels about what we have going on in the farm and what products we have available. Again, the list kind of goes on and on of what you can do to market. But I think starting simple is just kind of what are the core pieces of your story? What are your key messages and how can you communicate those to people who might want to support your business or support your farm?
00:20:00
Speaker
Yeah. I think Val hit it on the head too. She said early on, like what you can handle, there's endless amounts of content you can put out there. I mean, you could do YouTube, TikTok, Twitter, Facebook, Instagram, email. I mean, we've even found the amount that we can do once we had a kid changed from what we could do before. And, you know, I mean, there's so many things like, you know, more than just this too. So don't feel like to get started, you have to do it all too. You can start with one platform and branch out from there and find a way to
00:20:29
Speaker
I think there's ways to, you know, make one post and send it out through multiple platforms. So do what you can and be content with that. That's okay. Yeah, definitely. And Valerie, I liked what you said too about that's like the quality product and being confident is that it's really the starting point. And I think like you were talking about core values, that's kind of the driving factor behind that. Obviously, you guys choosing to do grass fed beef, raising them on pasture, and that kind of gives you more
00:20:54
Speaker
ammunition, I guess, for when you are marketing. You kind of have more to speak to and more to kind of justify a higher price point and speak to the quality of that. I was curious, I think a lot of beef farmers, or I would assume a lot of beef farmers, they're able to consistently move a pretty large amount of beef when they're using something like a sale barn. And so what are some of your guys' strategies that you've used to be able to like maintain those consistent sales, even though you might not have the ease of being able to kind of
00:21:20
Speaker
Drop all those be fall at once but instead you're able to maintain a healthy business obviously and maintain sales year round.
00:21:28
Speaker
Yeah, well, I think there's a few ways to go about that. One is the simplest is to just keep selling what you're not selling direct at the sales barn. There's nothing wrong with that. I mean, if you think next year you can sell one animal and you sell 200 a year, sell 199 to the sale barn and one direct. The next year can be 10 and 100, you know, so starts flow. Another way to kind of go about that would be to, if you want to direct everything yourself,
00:21:55
Speaker
You can go direct market to consumer or you can go direct market to some wholesale markets like restaurants or grocery stores that might move more beef, but still at a higher premium or a higher premium than selling to like those larger companies, but at a less of a premium than selling direct to consumer.
00:22:12
Speaker
And so work with what you can do in the meantime while you build your direct to consumer brand and still try and focus on adding a premium with everything else as much as you can. So there's nothing wrong with building your market as you go and slowly transitioning your marketing into that direct to consumer funnel. We live in a day where I can order.
00:22:32
Speaker
Anything I want on Amazon pretty much and have it here in a few days, even though we're in rural Minnesota. And I think that's what people want for their meat. And I think people do want to support local family farms, but we need to make it convenient for them too. And to have those consistent sales is to make sure it's convenient one for our customers to pick it up.
00:22:53
Speaker
having our pickup location near them instead of just at the farm. And then we do have a couple different options too with delivery, making it convenient for families or people with super busy lives. And then always having beef available and maybe not always, but as much as we can. I know some farms have different models where they just do bulk beef maybe in the fall, but for us, we try to always have some available year round. And so if somebody is.
00:23:19
Speaker
googling and finds a website, they can order a sample box and get it maybe that week or the following week. So those are a couple of things that come to mind on how we can continue to sell a higher quantity of beef as well.
00:23:31
Speaker
Yeah, definitely capturing somebody in the moment that they're looking for you is really important and having product available at that time which can be a challenge for sure. I know you guys also use subscriptions to sell your beef and that's just I think another great example of kind of making that convenient. I was wondering if you could speak to that and how those you kind of have that set up and how that helps you maintain a customer or even help you move beef consistently over the course of multiple months or a year.
00:23:55
Speaker
Yeah, we do use subscriptions. Our beef one is just called our beef club box. If anyone wants to look at it on our website, it has a couple of steaks, a roast and some ground beef every month. I believe it's 12 pounds of meat and customers can skip anytime or cancel.
00:24:12
Speaker
I guess we made it a lot simpler on an inventory standpoint by making it broader, what could be included so that we don't have to keep quite as tight of an inventory about what's going to be included in each box. We just say, you know, it's enough to feed a family of four for meal. So make sure we include four steaks or, you know, a two to three pound roast and so on. So that's one of our subscription boxes, but we have a lot of other different bundles and sizes too.
00:24:38
Speaker
Yeah. And you mentioned like your sampler bundle. That's kind of like your way to hook people, right? You kind of use that as like a, give people like a taste of your products and get them kind of looped in.
00:24:48
Speaker
Yeah, we have a lot of people that will purchase that just to try out our product, especially like at some different events we've done. Those have been really popular. We'll put a couple of steaks, maybe a roast, some ground beef, or even just a few things in a box. And people love to try it that way. We do have a lot of people just jump right in and say, I want to have beef share. Like I've read everything on your website. I like you guys sign me up. So that's kind of nice too, but the sample box is good for anybody who is cautious or wants to try it out first.
00:25:16
Speaker
And so something else I think that's like, I guess another benefit to going the sale buying route is that you're moving the whole animal at one time. And obviously if you're selling direct to consumer, you have to deal with inventory, I guess is really what it comes down to. Are those kind of those bundle boxes and subscriptions, how do you use those to kind of help manage that? Like, I know you mentioned you don't give too much of a specifics of what is in everything. Does that kind of help you make sure you move in everything that you have? Yeah.
00:25:41
Speaker
Still the biggest piece of our business is our eighth beef shares. I would say is our most popular. And then we sell quarters and halves as well. And so that's a really balanced amount of steaks, roasts, short ribs, flank steak, that kind of thing, and ground beef too. So that kind of keeps our inventory. Even we bring in batches of five had a beef at a time they're boxed up by their cut. And then we package as many eighth beef shares as we can. And then after that, what we have left over.
00:26:11
Speaker
is what we can include in our meat club, beef club boxes, our sample boxes. Sometimes we end up having to say, like not do as many eighths as we can, just so that we have meat for those things. But that kind of keeps our inventory even by only bringing in five pet at a time. But it's a bit of a.
00:26:29
Speaker
a puzzle trying to make sure we have everything, but also have the cuts available that our customers want to. I think one of the ways that we've been able to move some of the product that we're not able to move then in the bulk, because that is you hit the nail on the head with one of the biggest challenges of direct marketing is.
00:26:45
Speaker
Black Friday sale or we kind of have a clear the shelves kind of a we drop the price a bit and it allows us to offer a Black Friday deal, which is when people are shopping for Black Friday. I mean, they're going to buy it somewhere might as well be from us and stuff stuff.
00:26:59
Speaker
Yeah, it helps us kind of move the product that we have an excess of, but you're absolutely right. And that's probably one of the reasons we've just stayed away from going like the restaurant and the grocery store route is they may want all steaks. They want all the steaks that you can send them, but no ground beef for whatever else. And so we got to find a market for all those different products. And we just have not.
00:27:18
Speaker
gone down that route of trying to deal with the inventory at that scale. Right now, when we're moving a smaller amount, we can deal with the excess inventory as we kind of have it. But if you start going through a restaurant, it goes through five head a month and then another couple of restaurants that are going through, however much a month and stuff that scares me. Well, and I'm curious too, even with offering a discount on some of your products, would you still be making more off of that beef with a discount than you would if you were selling that through in the commodity market?
00:27:47
Speaker
Yeah. Oh, I'm sure. Yeah. Yeah. No, it's still profitable. The margins on a lot of these things are the things we sell by the cut. And the margins on meat by the cut is pretty high because for a reason, it takes more work and more management and more effort and stuff to move it. And you're moving it at a smaller scale. So instead of moving 50 pounds of meat, you're moving five or something or two or something. So there's definitely more margin in there to cover that. But if you can
00:28:13
Speaker
for a Black Friday sale and still move these things at scale, even with a slimmer margin, there's still enough margin there to make work. Yeah. No, that's awesome. Well, kind of the final leg of, I guess, the direct market journey is that fulfillment side. And Valerie, I know you kind of started to touch on this earlier, but that can be another big undertaking that you have to figure
Fulfillment Strategies for Farm Products
00:28:32
Speaker
out. And then obviously execute is getting those customers, their product. What are the kind of ways that you guys are currently doing fulfillment to get your beef into your customer's hands?
00:28:42
Speaker
Yeah, we have three ways. Number one, we have a pickup location in Edina, which is kind of the central spot for our customers in the Twin Cities. It's a little over an hour away from our house. And we have all of our freezers up there. We rent kind of a little like basement office space. So customers can choose that when they fill out an order. And then we bring the box right to their car when they get there for their pickup time.
00:29:05
Speaker
It works really well. It's pretty simple. We offer pickup times about once a week. And the second one is delivery, home delivery in the Twin Cities. We do charge like 15 to $25 based on how far out from our freezer space people are. And then lastly, we offer on farm pickup for any of our neighbors, community members, or people that might be halfway in between if they'd rather come and just.
00:29:29
Speaker
see the farm or whatever they can choose that route as well. And I think we'll make some changes at some point to that model, just to continue trying to be convenient for our customers. But right now it's what works for us. It's simple and it seems to work for lots of our customers too. So.
00:29:45
Speaker
Yeah, no, definitely. And that kind of gives people a wider range of options, which is really great. I think having more than one is always a good option. So then I guess lastly, to kind of, as we wrap things up here, but I think the biggest legwork that we've talked about is that marketing side of things and having to, you become the salesperson for your product and doing that through all the different channels that are available to you. What would maybe be your advice to farmers in regards to
00:30:11
Speaker
building that brand and kind of developing a brand voice, doing that whole marketing thing online. Yeah, that that's a big question, but I would say, first of all, really sit down and think about your why behind it. If you're going to build a business and spend a lot of time doing this, think about your why, figure out what your key messaging is going to be. I know barn to door has lots of resources to be able to do that, but
00:30:34
Speaker
I think that's the base of everything. And then building from there, setting up your business, how it might work best for your family, whether that's maybe selling beef twice a year, or if you're a vegetable farmer, maybe just selling in the summer months or whatever it might be, but kind of deciding on that model for us, we sell all year round and that works well for us. But then.
00:30:52
Speaker
Beyond that, I think just starting to build a customer list on a MailChimp, starting with maybe your mom and your sister and your best friend. That's a great place to start and then just figuring out where those
00:31:07
Speaker
potential customers that you're looking for might be, whether it's at events in your community, hanging up signs, that kind of thing. Somehow getting people signed up for that email list and start telling your story through that. Something that we've done at events is do a giveaway of some states or something to kind of entice people to sign up for our email list, even if they aren't going to buy anything at that event. And that's been really helpful to get new customers.
00:31:30
Speaker
One thing about MailChimp that I love is their welcome series. You can use customer journey to do it and build out a welcome series email. So when someone say, Rory, you come past our booth and you sign up for our giveaway right away, you'd be sent an email that said, Hey, Rory, and tells you all about our farm. And then a few days later, you'll get another email and another email after that, just telling you more about kind of our why.
00:31:56
Speaker
introducing you to our family and then explaining how grass fed cattle company works, how you can order and here's a 20% off discount code. So that's one of the big things I think helps a lot to tell our story and get people bought into what we're doing and really build that connection with that new customer.
Engaging Customers Through Authenticity
00:32:13
Speaker
Beyond that, just using social media or whatever other platforms you can to continue to just build that connection with your customers and let them know what products you have available.
00:32:23
Speaker
Well, yeah. And I think social media is kind of the tricky one there because like with what you're talking about with the email, you're able to kind of have that direct communication with your customer and social media. You're among every other account that somebody might be following or all the other farm accounts that they might be following. What would maybe be a piece of advice for folks to help their social media marketing stand out?
00:32:43
Speaker
Oh, good question. I would say too, like just a bit of a twist of the mindset on social media too. Like think of the odds of you walking past our booth at the event versus like, Oh, a reel that Valerie created lots of people saw it, or maybe one of your friends posted it. So I think like the odds of you seeing that are potentially higher, which is kind of the great thing about social media is just how easy it is to connect and see some of the content that you build on there. But.
00:33:12
Speaker
I was just going to say, Val has to remind me often when I'm out doing the work on the farm, like, Hey, share some photos, make a story of what you're doing or something like that. And every now and then when she's gone or my dad's gone, I'll do like a Jared takes over Instagram or something like that. And I'll try to share stories throughout the day. And we've had some comments of people that say they really enjoy that stuff too. So if you are a farmer out there doing this, not just sharing about the product, but sharing about the process, sharing about what we're doing.
00:33:41
Speaker
I'm a believer in what we're doing for our land and our soil. I think that was a big driving factor for why we went this route. It's pretty incredible to me to see all the more birds and insects and wildlife we have on our farm as we transition more acres into this perennial pasture and manage it well and stuff. And it just, it's incredible to me. And so when I can
00:34:00
Speaker
remember, which is rarely, you know, to try and get something out on social media as well, like to show what's actually happening out here, you know, do a story, take a couple minutes to explain why I'm doing what, you know, one person said, Oh, I never knew you move cattle like that and stuff. Just show the real, what you're doing here. That's going to build connection.
00:34:20
Speaker
so much like be real at winter sometimes I'll you know show the reality of winters that's sometimes tough too like the good and the bad and the sides of it and stuff and calving I think Val maybe got a video once with a cow in the process of calving and stuff things that people have never seen before but like be real and show them what's actually going on here
00:34:39
Speaker
And then, I don't know, I think that gives them a whole lot more. I feel like our customers, especially the ones that follow us regularly, know us in all the light that you never get to know. They're customers for life. People have literally said I'm a customer for life because of what you guys have shown us and what you guys do. So yeah, I think that's part of it.
00:34:56
Speaker
Yeah, I think that's huge. People want to be able to see and know you guys. I think that's probably a big reason why people are seeking you out in the first place. Like what might be every day and meaningless to you is something that is totally new to your customers and really meaningful to them. So don't be afraid to capture what you think is boring or every day and share it on social media.
00:35:15
Speaker
And for those husbands or wives who are maybe managing the social media and not out moving the fences, remind the spouse who is out moving the fences because there's a good chance they aren't even thinking about it. So regular reminders to, hey, take some videos today. It goes a long ways.
00:35:32
Speaker
Yeah, definitely. That's great. I'm sure there's a lot of people out there that are thanking you, Jared. I think that is important too, because something you started to touch on there, Jared, is people love to see passion, I think, more than anything. I think a lot of times that kind of comes in the form of education on social media, but it's very obvious that you guys are very passionate about the way you raise your animals, the way you treat your animals, and the product that you then provide to consumers. So I think being able to showcase that on your social media can be a huge differentiator as well.
00:35:59
Speaker
I guess as a final question to you guys, what would be your advice to somebody who's maybe thinking about transitioning from, from selling their livestock through a sale barn and transitioning that to selling direct? I think we've kind of touched on all these pieces, but just to reiterate is first of all, take it slow. And I guess before you start to kind of have those pieces set up, figure out your why, your key messages, the structure that works for you and your business and your family, and then just.
00:36:26
Speaker
Take the first step. Take one of our academy classes, covers MailChimp or the social media one, or just head over to Barns Adore and ask them where to start. I think no matter where you're at, try to just take it one step at a time and do what you can. Cause I know it can be overwhelming, but it is definitely worth it when we have these customers that have been on our subscription box for a long time. And the family has two little girls that are like eight and 10. And every time they see us, they say, my farm.
00:36:52
Speaker
And it just melts our hearts every time they come pick up their boxes. So it's definitely worth it. And there's a lot to it, but take it step by step. And I think you'll be really thankful you did.
00:37:04
Speaker
And I guess I would say at the beginning, Val kind of talked about knowing your why, like make sure this is something that you're doing for the right reasons and stuff because if you're just in it entirely for the profit, it's going to be hard to stick through some of the tough times because it is a challenging, I'll call it a business
Advice on Transitioning to Direct Sales
00:37:19
Speaker
because it's almost a separate business from the production side and a separate enterprise. It really can be challenging.
00:37:25
Speaker
make sure it's something you want to do for the right reasons and that you're ready to face the tough parts of it, but then once you do it, yeah, kind of like she said, you can get in with the simplest model of a drop ahead of beef. Get a customer who commits to purchasing a portion of beef, drop it off at the freezer, they pay the processor, they make the cutting instructions, they pick it up there, they send you a check.
00:37:45
Speaker
Super easy. All the way down to like some of the super advanced producers who have customizable weekly CSA, you know, you know, custom subscription boxes and stuff. And there's every level in this that it doesn't have to be jumped straight to the end and think you have to have it perfect.
00:38:00
Speaker
Yeah, no, I think that's really great. I think and especially your guys's points about it doesn't have to be a immediate transition from one to the other. You can kind of take that process slowly. And then obviously, like you were saying, Valerie, do some of the legwork ahead of time, you don't have to make the shift, do all the work, and then have like this big like kind of quiet period and then launch your products, you can kind of start to prep some of that beforehand and have some infrastructure in place before you start doing that. That's really great.
00:38:26
Speaker
Well, thank you both so much for joining us on the podcast today, Jared. We're going to have to get you on here more often. Thanks so much for having us. And thanks for all you guys do. We appreciate it. And we love using barn to door. So keep up the good work. Yeah, absolutely. I wanted to extend my thanks to Valerie and Jared for joining us on this week's podcast episode.
00:38:46
Speaker
Here at Barnadore, we're humbled to support thousands of farms across the country, including farmers like the Lumens. We're honored to get the opportunity to learn from our most successful farmers who share the tactics, resources, and tools they use to grow and manage their farm businesses. If you would like to connect with these farmers and other farm advisors, attend Barnadore Connect. You can register for weekly sessions at barnadore.com slash connect. For more information on grass-fed cattleco, you can follow them on Instagram and Facebook at grass-fed cattleco. Thanks for tuning in. We'll see you next time.
00:39:19
Speaker
Thanks for tuning in. For more free farm resources, tips, and tactics that are most successful farms use to grow and manage their business, visit barnadore.com slash resources. Also don't forget to subscribe to the Direct Farm podcast to automatically download our weekly episodes. Thanks for listening and we'll see you next week.