BY LINDA McGURK
Indiana Correspondent

ATTICA, Ind. — They call themselves “grass farmers,” and they’re part of a growing agricultural niche that emphasizes sustainability, nutrition and animal welfare – the “food that nature intended,” in their own words.

Dan DeSutter and Rich Hollinger, who own Hoosier Grassfed Beef in Fountain County, Ind., realize that some people think they’re crazy. But with both corn and energy prices on the rise, and more Americans increasingly concerned about their health, the two friends and business partners are convinced they’re onto something big.

“I don’t think we’ll become the industry standard in the foreseeable future, but if (grass-fed beef producers) can get five percent of the market, it would be huge,” said DeSutter. He wouldn’t disclose any annual sales figures, but revealed the company has averaged a 50-percent growth per year since its inception.

Although DeSutter grew up on a grain farm southeast of Attica, he had no intentions of returning to farming after he received his finance degree from Indiana University and landed his dream job in the corporate world. But he didn’t like what he saw of corporate life and, after his father had a heart attack, he came back to help out on the family farm. In 1990, he started farming full-time.

At the time, commodity prices were low and DeSutter was searching for ways to add value to his farm products. When he learned about rotational grazing, he grew excited about the potential.

“We brought cattle back in the operation in 1999, and that was the first time since I went to college and my dad sold off the herd,” he recalled. “We saw a niche market in grass-fed beef, and I wanted to specialize in finishing cattle without grain.”

Hollinger had worked off and on at DeSutter’s farm since he was a student at Purdue University, and had a successful career as turf manager at a golf course when DeSutter approached him with the idea. “He sold me on it,” said Hollinger.

The two started Hoosier Grassfed Beef in 2000.

“I think we’re doing things right as far as the environment, animals and nutrition goes. It feels good to know that we’re producing something that helps people’s health,” Hollinger said, but added he’s not out to “bash feedlots and conventional beef.”

One of the selling points of grass-fed beef is that it’s higher in omega-3 fatty acids than conventional beef. Omega-3 is known to reduce the risk of cardiovascular disease, improve the immune system and benefit developmental health, but it’s a nutrient that is deficient in the modern American diet.

DeSutter said several books about the benefits of Omega-3 have helped spur interest in grass-fed beef.

“I think the biggest thing that’s driving the demand is that more people are getting educated and are starting to understand nutrition. And a lot of them will buy it (grass-fed beef) at any price.”

Rotational grazing is more labor-intensive than grain farming, but requires less input than a feedlot system.

“Conventional beef production is a very petroleum-intense model,” said DeSutter. “The only reason why we have the feedlot system is because we’ve had cheap energy and cheap corn.

“But if corn and oil prices keep going up, we’ll get to the point where we’ll be able to produce beef more efficiently on grass.”

DeSutter and Hollinger usually buy animals that weigh in at 400-900 pounds and finish them at 1,200-1,300 pounds.

They often have to go out of state to find smaller-frame animals that aren’t genetically selected to be grain-fed, but even with good genetics, putting the pounds on grass-fed animals requires careful pasture management.

“Without the use of growth hormones, our average daily gains are not going to be as high as a feedlot’s,” explained DeSutter.
“We can’t turn an animal around in 16 months.”

That’s one of the reasons producers of grass-fed beef need a premium on their meat.

Another is higher processing costs; DeSutter said small operators could be at a $700-per-animal disadvantage compared with conventional beef. Hoosier Grassfed Beef sells its meat to upscale restaurants in Chicago and Minnesota, as well as directly to consumers over the Internet, so coordinating the logistics for relatively small volumes of meat can also be a challenge sometimes.

“We sell a lot of meat through word of mouth and get repeat business. The next step in the industry is to get the critical mass to drive down processing costs,” DeSutter said.

“The key is getting the quality. If people have a bad eating experience, they won’t come back.”

This farm news was published in the June 13, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.