What the Meat Industry Can Learn from the Downfall of Belcampo | Civil Eats

What the Meat Industry Can Learn from the Downfall of Belcampo

When the pioneering, pasture-based company abruptly closed after serious sourcing allegations, it sent shockwaves through the industry. A grass-finished beef producer talks with her peers about what went wrong and what comes next.

Beef cattle standing in a field

Belcampo did it all. The nine-year old company raised livestock on pasture on its 27,000 acre farm in northern California, slaughtered animals in its own processing facility, and sold the meat in its own high-end butcher shops and restaurants in the Bay Area, Los Angeles, and for a time, New York City. Belcampo also shipped meat around the country to customers willing to pay the hefty per-pound price (a 2.5 pound package of ribeyes sold online for $119.99 or almost $48 a pound, before shipping)—all in the name of good land and animal stewardship.

Then, last summer, the company was accused by former and current employees of selling meat brought in from elsewhere and sold as their own. Employees alleged that beef from Tasmania and Mary’s chicken were unloaded into the case and labeled as Belcampo meat; other former employees reported similar scenarios in different shops. After a short internal investigation, the company admitted that a small amount of meat had in fact been sold this way at their stores. Belcampo’s vertical integration from farm to fork, marketed as the key to total transparency, was in fact opaque.

Then, in mid-October, the company abruptly announced the closure of their e-commerce, restaurants, and retail shops. It’s not clear how the meat-labeling scandal impacted the company’s bottom line or whether the business was already in trouble. But as someone who raises grass finished beef and recently wrote a book about the challenges of making a profit farming, it strikes me that the demise of Belcampo offers an important moment for reflection on the industry at large.

“Instead of saying, ‘[the Belcampo] model can’t work,’ we should look at what mistakes might have been made and keep forging ahead.”

Doug Stonebreaker, the founder and former CEO of Prather Ranch Meat Company (PRMC), another 30,000-acre operation in Northern California, has spent a lot of time thinking about what it will take to get more consumers eating beef from animals raised on pasture, at a time when the vast majority are not.

On a recent phone call, Stonebreaker was sanguine about the lessons Belcampo has to teach the rest of us in the industry. “Instead of saying, ‘That model can’t work,’” he said, “we should look at what mistakes might have been made and keep forging ahead.”

Pasture Raised Animals are Truly Slow Food

The Belcampo model tried to overcome one of the most basic laws of raising animals entirely on grass: it is a slow and unpredictable business. Although almost all beef cattle are raised on grass for the first six to nine months, most are then taken to feedlots, where they eat grain—predominantly corn and soy—that fattens them up in 16-18 months.

In a pasture-based system, however, you cannot finish cattle quickly (it takes 24 to 30 months), and there is no way to raise livestock in mass quantities. Plus, on pasture, each animal needs far more space than they do when they are standing around in a feedlot, and even with the 27,000 acres Belcampo had, there are only so many animals one could raise and herds one could manage. And, depending on the rain (which falls sparingly in California), the health of your soil, and the variety of plants you have in your pasture, the speed at which the animals grow is largely up to Mother Nature.

Which all speaks to the unpredictability of getting food from field to plate. Although you might not know it by looking at the meat case at your local grocery store, everything has a season, and unless a ranch freezes and stores its cuts (which also has high costs and challenges), it is impossible to have every cut of every animal available for consumers at every moment. Chickens can’t be pastured in cold winter months, and California’s increasingly dry summers mean that cattle there don’t reach their target weight in June, July, August, or September (unless farms irrigate, using precious groundwater to grow grass).

Consumers are fickle, too, wanting steaks in the summer for BBQs and roasts for winter stews, making it a logistical challenge for ranches trying to sell fresh meat and make the most of every whole animal.

Can a Single Farm Service Multiple Stores and Restaurants?

Yet even with these limitations, Belcampo attempted to service not one, but five (and at times more) restaurants with static menus that served traditional foods like sirloin steaks and chicken breasts.

“I just don’t see any way that I could manage my inventory in a way that would make that work,” Will Harris of White Oak Pastures recently told me on the phone. Harris’ farm, which is about one-tenth the size of Belcampo’s California operation at 3,200 acres, but raises roughly the same number of animals due to the higher annual rainfall and lush foliage in the South. White Oak also raises food for their restaurant in the small town of Bluffton, Georgia, and for an on-farm store. “But for us, those operations are in service of the farm, not the other way around,” Jenni Harris, Will’s daughter and White Oak Pastures’ marketing manager, added.

Think about it this way. Each 1,200-pound cow only has only about 16 pounds of tenderloin. That means that in order to serve 100 people an eight-ounce tenderloin steak, you would need to have four whole animals processed. But that would also yield an additional 1,896 pounds* of beef—meat that the ranch and restaurant must sell in order to stay afloat financially and live up to the moral obligation to utilize the whole animal to the best of their ability.

“You have to be processing what you’re raising, and marketing what you’re processing, otherwise you end up with a million dollars of ground beef in the freezer,” Will Harris explained.

“At our restaurant,” Jenni Harris added, “if we have too many beef cheeks—guess what’s for lunch at the restaurant?”

It is a massive inventory challenge to balance what a farm has in stock with what is being served at a restaurant, and to maintain the flexibility to adjust prices and menu items as necessary. Letting the farm dictate what will be for sale in the restaurant and finding ways to utilize unsold items in the kitchen can help an overall profitability.

We’ll bring the news to you.

Get the weekly Civil Eats newsletter, delivered to your inbox.

Vertical Integration and Broken Promises

Belcampo tried to take two of the lowest-margin, highest-risk professions—farming and restaurant ownership—and make them profitable. The thinking was that by doing everything internally, it would remove the middlemen, processors, and distributors, thereby avoiding the mark up that comes with each hand-off up the food chain.

Today, farmers make 14 cents on every dollar spent at the grocery store—the brands, processors, and retailers pocket the rest. A well-run, vertically integrated business (the theory goes) keeps more of that money and makes low-margin businesses more profitable.

Notably, most of the huge agribusinesses that dominate the beef, chicken, and hog markets own very little in the way of land or animals. Instead, companies like Tyson—which, according to its website, produces 20 percent of the beef, pork, and chicken in the United States—contract with farms and feedlots, thereby avoiding the cash—and the risk—involved in owning land, buildings, and confinement facilities. And with a state-of-the-art, 2,499-hog “space” confinement barn costing upwards of $750,000, owning enough animals to slaughter 461,000 hogs a week (the amount Tyson can process) is prohibitively expensive.

It is impossible to know whether vertical integration did, in fact, mean that Belcampo came closer to making a profit than most farms do. In 2020, the median income for America’s two million farms was -$1,248—a more than $1,200 loss. But even with steaks at $47 a pound, farming is expensive business and Belcampo’s high monthly costs in real estate and labor may have detracted from their ability to make a net profit.

Yet the company also marketed their ownership of every part of the food chain as the reason customers could trust that they did everything right; the company’s motto was, “Meat you can trust, from start to finish.” Betraying that trust and getting caught misleading consumers almost certainly hurt the company, but it has also had a negative impact on all of us raising animals on pasture. Reverberations throughout the “pasture-raised” community were felt, even on farms that have worked for decades to build relationships with consumers.

“It is just one more layer of skepticism, and we don’t need that,” Will Harris told me.

White Oak Pastures works to combat “greenwashing” by inviting people to stay on the farm and visitors can peek into every part of their supply chain; you can walk into their freezers and watch slaughter if you so desire, the Harrises told me. But for smaller farms, like one I run with my husband, those extra steps aren’t possible. We’re hoping to increase our direct sales (particularly now, when consumers have more interest in buying locally), but there is no extra cash to build housing for customers to visit with our cows, and buying our own processing facility is cost-prohibitive. Add to that the fact that insurance for farm tours and pizza nights is virtually nonexistent in the state of Iowa. In other words, consumer word of mouth and trust in our practices is all we have.

Diversifying Ownership

There are also ethical considerations when it comes to the vertical integration. Having a single person or company owning all parts of the supply chain means the continued ownership and consolidation of land and property by the wealthy.

In Belcampo’s case, investment came from Todd Robinson, a retired financial executive who had been buying farmland in Northern California with the idea of raising grass-fed beef.

Rather than investing in land, buildings, and restaurants, all the money invested into Belcampo could have been used to help farmers already using regenerative practices to scale up.

Currently, 98 percent of land in the U.S. is owned by white people, who also make up 96 percent of all landowners. And, as an increasing number of acres are farmed by larger operations, small and mid-sized independent farms and ranchers are producing less of the overall food in this country than ever before, and making less of the profit.

When one person owns everything, there is a missed opportunity to involve hundreds of thousands of farmers who might want to play a part in changing the food system and benefit financially from doing so.

newsmatch mobile logo

Rather than investing in land, buildings, and restaurants, all the money invested into Belcampo (an estimated $50 million, although that number seems low for owning so much real estate) could have been used to help farmers already using regenerative practices to scale up, said Doug Stonebreaker. “If your goal is to change the system and build and support communities, with capital you can control the structure of the business instead of necessarily owning land. There are many farmers and ranchers who are totally committed that need capital, those ready to bleed to death trying to make it all work.”

Stonebreaker also sees opportunities for capital investments to help farmers transition row crop farming in the Midwest to grass-based, pasture models, thereby increasing the number of acres in regenerative agriculture. A central company could be used to process and sell the niche-market beef, increasing the prices farmers are paid for their cattle.

“You’d need a crazy balance of entrepreneurship and leadership, coupled with structure and discipline. There would need to be a lot of rules and there can’t be too much ego involved,” Stonebreaker added. “But you could pull it off.”

Larger companies like Belcampo may help to drive interest in and demand for pasture- raised livestock with sizable advertising budgets and frequent media mentions. But diversifying the ownership in addition to the diversity of plants and animals may have been what was missing. As Nobel Prize winner Elenor Ostrom found in her research about shared community resources, working together benefits not only the humans, but also the environment.

Beth Hoffman is an Iowa-based farmer and former journalist. She has reported on food and agriculture for NPR, The World, Latino USA, Living on Earth, and many others. She is the author of Bet the Farm: The Dollars and Sense of Growing Food in America, (Island Press, 2021). Read more >

Like the story?
Join the conversation.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  1. Josie Corros
    Im a consumer who scrutinize any kind of food that goes to my family’s stomach. I care about their health so much that I retire early to have the time for them. Im skeptical of the produce I was buying. Even it says grass fed, organic free range and organic veggies, Im not so sure about it unless i see how these food are being raised. This company should have outsource his grassfed meat from smaller farms. There’s nothing wrong about it as long as they are raising the animals like they do in their farm. But with the covid, the situation is very challenging. I wish for them to restructure their company with diverse source of grassfed meat. As of now, my grassfed meat comes from sprout. And I wish to go and see how the supplier of sprouts raised their cows, pigs and chickens. Also, if raising grass fed meat is expensive how come the other parts are not sold in the market. Like the liver, the leg bones and other entrails. Consumers may want to eat the internal organs and other parts of these animals if were raised healthy with no artificial feeds, hormones and antibiotics.

More from

Commentary

Featured

Popular

Could a Rapid Test For Antibiotics Bring Transparency to the Meat Supply Chain?

Packaged pieces of meat on a supermarket showcase

After Years of Pushing for Prairie Strips, This Ecologist Won a MacArthur ‘Genius’ Grant

Lisa Schulte Moore. (Photo credit: John D. and Catherine T. MacArthur Foundation)

University Ag Schools Turn to Big Ag Dollars as Private Donations Dry Up

Meet the African Farmer Growing Rice in New York’s Hudson Valley

Nfamara's son Malick, center, with Naveen and Malaya Hoyte, Malick's cousins. (Photo by Jake Price)