The Madison County Economic Development Council (MCEDC), a non-profit organization committed to improving the economy of Madison County, has launched Montana Black, a branded beef program for Montana ranchers. In its first phase, this program has been selling fat cattle sourced in Madison County to beef customers in Southwest and Central Montana. Its long-range plan is to source cattle statewide for sales throughout Montana, national markets, and international markets.

This program, which has been selling beef for the past six months, has two primary goals.

First, it will provide cow/calf ranchers with an alternative to the commodity market by paying premium prices for locally raised, natural fat cattle. These prices will profitably compensate ranchers for retaining their calves and managing them to market weight within Montana rather than selling them as young calves into the feedlots of the Midwest. The live weight prices paid are directly correlated to what the market for Montana fresh beef can bear. The Ranchers’ First pricing model, which calculates these live weight prices, is described in detail in this grant proposal.

Second, this program will offer local food businesses and household consumers the quite rare option of purchasing locally raised, natural Montana beef. Commodity beef is not Montana beef. Feedlot beef is not Montana beef even if the cattle happened to be sourced from Montana. The goal of Montana Black is to provide verifiable, high quality, locally raised and natural Montana beef to the marketplace.

The Non-profit Business Model

The aim of the MCEDC is to put the rancher first. We recognize their need for increased revenue for a natural, grass/grain finished product that has never left their land and entered a commercial feedlot. We also recognize a willingness by consumers to pay a premium price for a natural product. The role of the MCEDC, as the marketing firm for this project, is to connect the rancher and his product to a certified processor and then to a buyer that is interested in the product and price we are offering.

As a function of sales and marketing, the MCEDC will find buyers, coordinate with ranchers who have market weight cattle ready, ensure that the processor is prepared for live delivery, locate a delivery person for the beef product to the buyer, and then send an invoice to the buyer and make payments to the rancher and processor. The goal of the MCEDC is to keep this process constantly moving. This is done entirely as a non-profit organization.

The Market

Madison County, and by extension all of Southwest Montana, is an ideal location to start this project because of our resource base and a growing tourist industry. There are over 900,000 people traveling through Madison County each year, and this allows the MCEDC to introduce a locally branded beef product to a large market with minimal advertising costs.

Source: Compiled from the Institute for Tourism and Recreation Research and US Census Bureau

According to the US Department of Agriculture, the average person consumes about five pounds of beef per month. If we project consumption rates of 5 percent of the local market and 3 percent of the tourist market for beef products, we can calculate the monthly number of cattle necessary to supply our consumers to our market. Depending on the season, this is 100 to 160 head per month.

The beneficiary of this project is Madison County. With a successful marketing plan, the net gain for our local businesses is significant. Based on our market size information and projections for potential sales, we have come to the following sales estimates. We project that we will be able to capture our estimated sales targets within five years.

The above figures represent our sales estimates based on assumptions of attaining 7% of our local market beef sales and 3% of our tourist market beef sales by the end of year 4.