Room in the Middle

Sales Approach Builds Higher Profits, More Markets

Jennifer Curtis (left) and Tina Prevatte started Firsthand Foods in 2010 to fill the role between specialty meat producers and buyers.(DTN/Progressive Farmer photo by Becky Mills)

Johnny and Sharon Rogers like the idea of selling their finished animals locally. But, going to three farmers' markets 52 weeks a year was "a grind," Johnny admits.

Seth Gross, a restaurateur in Durham, North Carolina, uses locally grown, pasture-raised meats at his businesses. There were not enough hours in the day to buy product from 30 different farmers for Gross's restaurants, Bull City Burger and Brewery, and Pompieri Pizza.

Somewhere in the middle of those challenges was an opportunity, and Jennifer Curtis and Tina Prevatte spotted it. They created Firsthand Foods in 2010 to connect the dots between producers like the Rogerses and buyers like Grosses. The company sources locally grown beef, pork and lamb from producers who haul their animals to a local harvest facility and then let Firsthand Foods take it from there.

"Like most people, we care where our food comes from," Curtis says. "We want to help small-scale, pasture-based livestock producers thrive. We are using our business to build a more sustainable food system."

MORE SALES, LESS WORK

Rogers Cattle Co., Roxboro, North Carolina, includes 100 Red Angus and SimAngus cows. They sell seedstock, as well as finished beef, have a sheep herd and pasture-finish feeder pigs. Sharon says Firsthand Foods has given them the time to expand their business. The year Firsthand Foods started, the Rogerses increased output from 10 to 20 beeves (finished cattle). Now, they average around 30 a year.

Johnny, who works as North Carolina State University's (NCSU) Amazing Grazing coordinator, says before Firsthand Foods, "we'd have to haul animals to the processor, pay for processing, pick up the meat, bring it back to the house, put it in our freezers, then load it back in our truck to take it to the farmers' market." While they still sell part of their meat at a local farmers' market, now, it's just one location, not three.

PRODUCER PRICEMAKERS

"Our farmers are our pricemakers," Prevatte explains. "We buy all our hogs from the North Carolina Natural Hog Growers Association [NCNHGA]. They set the price, and we pay accordingly." The NCNHGA is a farmer-based co-op in existence for 10 years.

For cattle, the purchase price formula was developed with the help of the Rogerses and Matt Poore, NCSU Extension beef specialist. It takes into account both production and opportunity costs (the value of things given up for certain decisions, such as the use of growth promotants). Prevatte and Curtis work through the formula with each producer and agree on a price. Next, they send a letter of engagement and ask how many head the producer will deliver, and what months the animals will be harvested.

The percentage of the Rogers's beef production going to Firsthand Foods has been steadily climbing. Initially, they sold about 70% at farmers' markets and the rest to the company. By 2018, they were selling about 70% of their production to Firsthand Foods.

"If you want to cultivate a market for good farmers, they have to be rewarded," Curtis notes. "If we have to be a business that squeezes farmers, we're not going to do it."

On the practical side, she and Prevatte emphasize they also have to be profitable to be sustainable. They've kept their business lean by leasing office and cooler space. They own only two vehicles and a walk-in freezer. They have also taken the time to apply for grants, public and private, to help give them a boost. The low overhead hasn't slowed their growth. The pair has taken Firsthand Foods from a weekly count the first year of one beef, six hogs and no lambs to six beef, 20 hogs and three lambs in 2018. The animals go to more than 100 restaurants, meat markets and institutions, including Duke University.

Their growth hasn't been without challenges. Curtis says finding innovative ways to use the whole animal is always a concern. One solution has been to work with a chef to create custom-blended pork sausages, a big seller. There is also the challenge of supplying pasture-raised meat year-round.

"We were supply restrained," Curtis notes. "We had to convince farmers they had a market. Once they find something like Firsthand Foods, they are more willing to try pasture-based finishing."

ACHIEVABLE STANDARDS

A producer-friendly, animal-care protocol helps attract and keep suppliers. Both beef and lamb producers are allowed the use of high-fiber supplements and small amounts of grain, if needed, in addition to forages. Pork producers are expected to feed grain. In addition, if an animal is sick or injured, producers are allowed to treat with antibiotics, as long as withdrawal times are strictly observed.

Prevatte describes it as "finding regionally appropriate standards. We ask ourselves, 'What is reasonable and makes sense to farmers?' "

CONSISTENT QUALITY

At the same time, Firsthand Foods continues to focus on quality and traceability for buyers. For example, a rib eye comes off every steer or heifer, and is graded in-house, and the grade is sent to the producer.

"We strive for mid-Choice," Curtis says. "It needs to be delicious." She adds, "Our farmers value feedback. They make decisions all the time that impact quality, especially with genetics and nutrition. Without feedback, how do they know they are doing it right?"

That feedback, says hog producer Jennings Outlaw, is one of the main advantages he receives out of marketing to the group. The Mount Olive, North Carolina, hog producer and NCNHGA board member says: "They tell you if you have a very good carcass or if anything needs improvement. Most of the time, it has been positive. Firsthand Foods is really good to deal with, and they communicate well with you."

As for traceability, for the first six years, Firsthand Foods wrote the producer's name on each invoice. Now, they have updated software and put the lot number and producer's initials on each package of meat.

Buyer Seth Gross appreciates Firsthand Food's role in delivering meat to his restaurants, but he also values maintaining a connection to producers.

"We closed our restaurants for a day, and 55 of us went on a tour to meet our farmers. We loved it. I want our employees to see the farms, see where our food comes from. It affected them in a wonderful way."

Still, he is more than happy to let Firsthand Foods continue in its role as middleman.

"We have to have beef all year. By using Firsthand Foods, they are able to organize the farmers and make sure the beef is ready each week, and they stabilize pricing. They are great folks. They are transparent. It has been nothing but positive."

(GH/AG)