Shelli Masek, Sioux Falls Business Journal
Wednesday, August 24, 2005
As the first class of cattle enrolled in the Governor’s South Dakota Certified Beef program come of age this year, local merchants say they are excited to be part of the emerging program.
Rod Bajema, a partner in Sunshine Foods, has discussed with state officials the possibility of carrying the beef in his area stores. Sunshine operates seven stores in Sioux Falls, Brandon, Hartford and Canton, and Rock Rapids, Iowa.
“We are a South Dakota company, and we want to support South Dakota. We are very behind this because it is a South Dakota product,” Bajema said.
He said his biggest concern is maintaining supply. The beef may not be carried in all of Sunshine’s locations, but the regional chain is deciding where to test the product. Stores will have to charge more per pound, depending upon their costs, said Bajema, but he said the market will decide if the beef is worth it.
“The best way to tell is by the public’s reaction. We want to make it available and let the people decide if there is a market for it.”
Bruce Anderson, owner of Look’s Meat Market, also has questions about the beef’s continuous availability but said he supports the initiative.
“I believe it will be a premium product, and Look’s is about premium products. It will really fit us nicely,” Anderson said.
Some merchants are more skeptical. Matt Munce, a partner in Uncle Ed’s Specialty Meats, said it’s hard to predict whether the market can bear a more expensive product. He said he is open-minded about the program and is waiting to see what sort of demand there is once the program is operational.
“I believe in giving the customers what they want,” Munce said.
Officials at Hy-Vee corporate offices in West Des Moines, Iowa, did not return telephone calls for comment.
Jafar Karim, director of the Governor’s Office of Economic Development, is cautiously optimistic about the program’s success. The program, which is part of Gov. Mike Rounds 2010 Initiative, has been developed during the past two years. Initially, it was designed to help South Dakota prosper and keep money in the state, Karim said.
“Our cattle environment is one of the best in the world,” he said. By sending the state’s cattle to outside processors, he said, South Dakota is letting go of the product before the value is added.
Only a handful of processors so far have met the requirements to receive the South Dakota Certified stamp. Karim said he thinks that once consumer demand is there, more processors will want to be involved. And because the program is new, it’s “important that we do it right,” he said.
Right now, smaller merchants have shown the most interest in carrying the beef on their shelves. The economic development office also has discussed involving restaurants. In turn, the restaurants would be allowed to promote the South Dakota Certified beef cuts on their menus.
Eventually, the office hopes to create a market for South Dakota beef throughout the United States and possibly worldwide.
The program provides farmers and ranchers with the guidelines to raise “a consistently tender, good-tasting beef product,” Karim said. “It’s not just about higher price.”
Eric Iverson, a livestock development and marketing employee with the South Dakota Department of Agriculture, said participating producers must be licensed before any of their cattle can be enrolled. The producer tags newborn calves that are enrolled in the program and thorough records must be kept. Stringent guidelines regarding feed and medicinal care must be followed.
Currently, 15 producers from around the state have become licensed, and more applications are in the process.
To make the program successful, Iverson said it was necessary for South Dakota to “move above and beyond” U.S. Department of Agriculture requirements. So, when the beef is processed and stamped, a consumer will know everything possible about the product from where the animal was born and raised to the exact date of birth.
Guidelines call for cattle to be a fed a mixture containing at least 50 percent corn 100 days before slaughter.
Iverson said that because beef production is cyclical in South Dakota, keeping the supply consistent in the program’s early stages will be an issue. Farmers and ranchers may have to make changes in their operations.
“The market will send the signal for a consistent supply,” Iverson said.
Iverson said processing in the state also will be an issue. He estimates that 1.8 million head of cattle are born in South Dakota every year, but only 300,000 to 400,000 are processed here. While cattle processed in other states still can be labeled as raised in South Dakota, it cannot carry the South Dakota Certified label.
“It still has value,” Iverson said. “But some of the value is leaving the state.”
