Lorentz Meats

Lorentz Meats is a rare example of what Fred Kirschenmann, a leading scholar on sustainable agriculture, and his colleagues call “agriculture of the middle.”[20] Kirschenmann argues that very small operations, whether family farms, roadside produce stands, or quaint locavore cafes, have their role, but they will ultimately never transform a food system dominated by Fortune 500 giants unless they can reach a size and scale that can better compete. His solution is to think regional instead of local and to pool production, processing, and distribution capacities across a wider area without growing so large as to lose vital connections to local communities, economies, and ecosystems.

Meat requires a larger scale than many other foodstuffs for some basic reasons. A tomato can be grown quickly, cleaned with a single rinsing, shipped without refrigeration, and displayed without any special casing or packaging. Cattle, by contrast, need to be grown over two years, and then killed, cut up, processed, and packaged in a refrigerated, antiseptic environment. “Once an animal gets to slaughter,” Mike observes, “only about sixty pounds of middle meat, of the four hundred pounds of meat overall, are easy to sell. That leaves three hundred and forty pounds that are harder to sell. If you’re only distributing to restaurants, the math kills you.”

Mike believes that small ranching operations raising under 100 animals at a time can be profitable, but only if they have access to a reasonably scaled processing plant and deploy a solid direct marketing program. Put another way, economic success is only possible if a grower can move those less-valuable 340 pounds. This is exactly what Lorentz Meats strives to provide.

Mike’s assistance to small farmers, based on several decades of experience, comes down to some fairly succinct advice about volume and profitability. “Less than a hundred cattle, you should direct market. More than a thousand cattle, you’re big enough to sell to restaurants and retail. In between and you’re in an awkward middle ground. With a thousand cattle, you can direct market a hundred, and get five hundred to a thousand dollars extra per head, then sell the remaining head at commodity to buy down costs on the animals you direct market.”

But what if a rancher currently has 200 or 600 cattle? “We’re all about options,” Mike clarifies. “Grow as many animals as you can within your husbandry requirements. Sell as many of those animals as you can direct market. Qualify for as many specialty programs as you can to get the premiums you’ve earned. Unload the rest for the underperformers on the commodity market to convert to cash to start the cycle over.”

Indeed, some of Mike’s clients only process one or two head per year and give the meat to friends as gifts. More typical clients produce 40-60 head a year. With these customers in mind, Mike launched his Market Maker Program to give his clients not only low-cost processing but also assistance with direct marketing. In collaboration with the Land O’Lakes cooperative, he secured a $400,000 grant from the USDA to write a direct marking curriculum called Branding Your Beliefs.

Mike focuses on direct delivery through relationship-based sales, word of mouth, farm-gate sales, and the Internet. Retailers normally impose a 35-50% markup on specialty meats. Outside distributors take 15%. This system doesn’t leave much for the farmer. Lorentz Meats effectively helps its clients make an end run to the consumers. Most of the price that would have gone into the pockets of retailers and distributors can instead go into the pocket of the producer. Mike believes that helping farmers with direct marketing “exponentially expands our own business opportunities.” A company brochure boasts, “In the arena of cooperative packaging, Lorentz looks for branded products that they can add value to by superior processing. Thus far, Golden Bison, Kowalski’s, The Organic Meat Company, Sysco Corporation, Dixie’s, Berkshire Country Meats, Ajishoku Foods, and Six Point Berkshire Pork (to name a few), have partnered with Lorentz’ Specialty Processing and Sausage Divisions.”

One tricky part of direct marketing is how to handle buy-backs. Many meat processing companies that perform “tolling” and marketing for small growers will take back any items not sold under a private label and then freeze, grind up, or cook up them up and resell them under the processors’ label. The problem is that this puts the processor in direct competition with the clients’ own private label programs, and serves as a disincentive for the processor to market aggressively the fresher products. Lorentz Meat has renounced this practice.

Despite Mike’s passion for direct marketing, it is important to note that 80% of the volume of his meat processing comes from a handful of much larger customers. Fortune has it that just as Mike and his brother and co-owner, Rob, were building their current state-of-the-art facility, they crossed paths with representatives from the Cooperative Regions of Organic Producer Pools (CROPP), better known as Organic Valley, the largest supplier of organic products in the United States. Organic Valley quickly became Mike’s largest customer, and today he does beef processing for CROPP’s meat brand (Organic Prairie), as well as for Organic Prairie pork and value-added meat products. Another major client is Thousand Hills Cattle, a 100% grass-fed operation that processes 1,000 cattle per year. That relationship came about after Todd Churchill, a Lorentz consultant, decided to go into business for himself.

Mike’s commitment, however, is still to help the little guy. A company brochure says: “Capitalizing on direct sales opportunities, Lorentz sees tremendous potential for increasing processing volume at its plant from independent, family farmers. And on the coat tails of the farmer-direct connection with the community, the community is ultimately strengthened by keeping their food dollars close to home.”

Mike ticks off all the tests Lorentz Meats has passed that indicate its commitment to quality: USDA approval for organic processing; EU certification for bison and elk; customer audits by Gerber Baby Food, Organic Prairie, Steritech, and NSF-Cook & Thurber that are vendor requirements for companies such as Whole Foods Market, Costco, and Disney. Yet he insists that he doesn’t play favorites. Corn-fed versus grass-fed? Organic versus conventional? Humane versus conventional? He’s willing to work with anyone. “Who am I to judge who is good enough?” “Sure,” he concedes, “I tend toward alternative producers because they are the most motivated.” He then lets down his guard a bit and admits that, yes animal welfare has been a concern. “There is no need for these animals to suffer.”

Lorentz Meats actually has designed its holding pens around the theories of Temple Grandon, a Colorado State University professor whose most recent book, Animals in Translation, is all about empathizing with animals. Dr. Grandon has since visited the Lorentz plant, telling Mike they’d done pretty well but suggesting several modifications, which they promptly carried out. The slower processing at the plant facilitates a more humane slaughter, as does an observation room where visitors can see for themselves how the workers are performing. Michael Pollan noted and praised these innovations in his book, The Omnivore’s Dilemma.