News Column

Meat processor diversifies to rely less on beef

August 12, 2014

By Michael Reschke, Herald-Times, Bloomington, Ind.

Aug. 12--SPENCER -- For a lot of local livestock, Rice's Quality Farm Meats is the end of the line. On Monday mornings this time of year, about a dozen animals will be weighed and inspected. Then, one at a time, they'll enter the knock box, where a "CASH" stunner will be pressed to their heads. Then the trigger will be pulled and send a bolt into their brain.

"It kills them instantly," said Tim Rice, company president.

Death and the subsequent processing are the parts of the beef industry people don't really like to think about, especially when they're sinking their teeth into a juicy hamburger at a summer cookout. With most people buying their beef on white foam plates covered in plastic wrap, it's easy to forget that 2.81-pound chuck roast was once part of a 1,400-pound living, mooing animal. Rice, however, will always remember where his steak comes from.

Tim Rice's father, Jim Rice, founded the business in 1974 after leaving a sales position at Eli Lilly. Tim Rice grew up in the business, graduated from Wabash College and worked for Perdue Foods for nine years before returning. He and his mother are among the business's nine employees, who process about 12 to 15 beef cows and about 20 hogs, lambs and goats a week.

Being such a small facility, most of the work is done by hand, as opposed to larger facilities where much of the process is mechanized. That means after a cow is killed, eviscerated, halved and cured for two weeks, someone will take a saw and cut it into quarters. From there the primers, as they're called, are divided into individual cuts of meat based on the specifications of each individual customer. Whatever usable meat isn't separated into steaks and roasts is usually ground for hamburger.

But there's more to the processing business than the actual processing. Rice is part of a larger industry that can be affected by everything from the temperature outside to foreign economies. Both of those things have combined with other factors to drive current beef prices to historic highs.

On the surface, that may seem like a good thing for anyone in the beef business, but it really depends.

"It makes me nervous where the market is," Rice said.

Foreign demand for U.S. meat has grown, but a guy like Rice isn't necessarily benefiting from that. He's dependent on the local beef industry, and that's changing.

Logan Vencel, who raises cattle and sheep in northern Monroe County, sells freezer beef to local families. He said he goes to Rice's for about 90 percent of his processing, but like many other beef producers, he has fewer head of cattle today than he did a few years ago. That's because a major drought caused corn prices, which affect the price of other grains, to rise. It also made foraging difficult.

With increased costs, some beef producers decided to thin their herds. With fewer cattle to go around, beef prices went up, which caused even more farmers to sell and try to cash in on the increased value of their livestock.

Now, not only is the cattle supply down, but with prices up, people also might be less inclined to purchase a calf. For a local processor such as Rice, a decent number of his customers are families who buy calves and raise them for their own consumption. Those customers may decide it's not worth it.

"People are paying more for feeder calves now than they ever have in their lives," said Joe Moore, executive vice president of the Indiana Beef Cattle Association.

He said calves are averaging about $200 per hundredweight now, but he's seen them go for as much as $300 a hundredweight in online auctions.

In addition, it's not like the local cattle industry is growing.

"It's good to be a beef producer now," Rice said, "but there's not many out there. You can't just say, 'I'm going to start growing now.'"

Vencel agreed, saying there are only about 20 to 25 cattle farmers in Monroe County, and their average age is probably close to 60. At that age, a lot of people would rather rent out their land for crops than go out and check on a cow in January, he said.

While all those changes mean fewer potential customers for Rice's, it doesn't mean certain doom for the business. Over the years, Rice has learned to adapt.

From the time county fairs get going in the summer to about January, he's pretty busy, but for the rest of the year, things tend to slow down. In the past, that might have meant laying off employees, but an expansion into retail sales has helped stabilize things throughout the year.

That turned out to be a good move, because the retail side of the business has taken off. Rice's has won several awards for its meat products over the years, most recently earning grand champion and reserve grand champion honors at the 2014 Hoosier Cured Meat Championship.

One of those awards was for boneless turkey breast. Rice's has been doing more poultry recently to offer cheaper protein choices for customers.

It seems even if beef prices continue to stay high, Rice's will be OK -- it just won't be processing as much cattle. That is, as long as people don't stop eating meat altogether.

"I like to see the money for the farmers," Rice said. "I just hope, from our perspective, people don't go down to eating meat only once or twice a week."


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Source: Herald-Times (Bloomington, IN)

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