Economic viability of grass-fed beef production in the northeastern U.S.: A life-cycle cost analysis

Abstract

CONTEXTWith abundant high-quality forage, pastureland and established markets in New York and New England (NYNE), expanding beef production in the region may contribute to a gradual shift toward grass-based finishing systems. However, it remains an empirical question whether grass-fed beef produced in NYNE is cost-competitive.OBJECTIVEThis study aims to assess the economic viability of grass-fed beef production in NYNE. Based on the cost breakdown, we will assess whether grass-fed beef in NYNE can be produced at a lower cost, as this could be the key to allowing U.S. producers to compete with domestic conventional beef.METHODSLeveraging survey data, we employ an optimization model to estimate the life-cycle production costs of grass-fed beef, including all phases from farm to retail. To evaluate the impact of scale efficiencies, we introduce and compare two production scenarios: one with scale effect and another without it.RESULTS AND CONCLUSIONSOur findings reveal significant cost advantages from economies of scale in grass-fed beef production. By scaling up operations, production costs can be reduced by 24% compared to smaller-scale systems. These findings indicate that, with efficient scaling, grass-fed beef can become cost-competitive with conventional grain-fed beef in the region.SIGNIFICANCEThis study offers a comprehensive evaluation of the economic viability of grass-fed beef production in NYNE. The findings of this study are valuable in the context of developing a grass-fed beef production program in the Northeastern U.S. Such information is currently lacking and is useful to help inform decisions of various stakeholders interested in grass-fed beef production in the region.