Small businesses take on big beef/ Meat market sells directly to consumer

Published on Wednesday, July 30, 2003 by The Gazette

Group discuses problems facing cattlemenSmall businesses take on big beef/ Meat market sells directly to consumer
by Paul Beebe

Mike Callicrate, an outspoken crusader against big meatpackers and retailers, has opened a meat market in Colorado Springs that is as much political manifesto as business enterprise.

Ranch Foods Direct on North El Paso Street is broadside against giants such as IBP Inc., the world’s largest beef packer, and Wal-Mart. Callicrate, a Kansas rancher and feed yard operator, says IBP and Wal-Mart are in league to fix prices and make it impossible for small producers to survive.

“I am fighting for the independent producer, and Ranch Foods is the solution,” Callicrate said. “If we can accomplish our goals through Ranch Food Direct in connecting the producer more directly with the consumer, we can increase income at the farm and ranch gate, restoring their profitability and at the same time giving the consumer a good deal on the highest quality meat.”

The store tucked into a scruffy commercial district near Fillmore Street sells meat processed by G &C Packing Co. of Colorado Springs, another maverick in the nation’s $65 billion beef industry. G & C was the first packing company in the United States to use a rare slaughtering technique known as “rinse and chill,” which they say tenderizes the meat.

“It’s an opportunity to improve meat tenderness, which tends to be quite variable and is a problem for the meat industry,” said Darrell Bartholomew, an animal product scientist at the Agricultural Utilization Research Institute in Marshall, Minn.

The animals are raised at Callicrate’s feed yard in St. Francis, Kan. Their feed is noteworthy for what it doesn’t contain – sub therapeutic doses of antibiotics to prevent the cattle from becoming sick and to promote weight gain. Nor are the animals given muscle promoting hormones.

After processing at G&C, the carcasses are trucked to Ranch Foods Direct, where workers dress them into steaks, filets and other cuts. Much is sold to independent Front Range meat markets. The rest is sold to consumers at the Ranch Direct store.

“We will not do business with the big chains. They are the enemy,” Callicrate said. Callicrate opened his first feed lot in 1978. At the time, he had the choice of selling his cattle to as many as 10 packers, and price was negotiated aggressively. Today, he said, there are four packers who all pay the same price.

In 1996, he joined several cattlemen in suing IBP, accusing the meatpacker of illegally cornering the beef market and conspiring to fix prices. The suit comes to trial next year in a federal court in Alabama.

Four giant companies – Cargill, ConAgra, Farmland National and Tyson Foods, which in September 2001 acquired IBP – control 83 percent of the nation’s cattle slaughter, consumer activist and Green Party presidential candidate Ralph Nader said.

Callicrate’s harshest words are for Wal-Mart, the largest retailer in the United States. “When you shop at Wal-Mart you support the elimination of communities because Wal-Mart dictates to their suppliers, which are the big meatpackers, what prices they will pay,” Callicrate said.

In turn, the big packers use their market power to buy cattle below the cost of production, a practice that is destroying rural communities, he said.

Wal-Mart declined to respond.

“Wal-Mart will continue to do what we do best and that is focusing on taking care of our customers by continuing to offer them quality products at everyday low prices,” spokeswoman Karen Burk said.

Prices at Ranch Foods Direct are about 10 cents per pound higher than other stores, Callicrate said. An 8-ounce top sirloin sells for $3.

“We have employees who will cook meat samples,” he said. “We just want to show the high quality products that we have and how they are very different from what other stores sell.”

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