The principle behind a marketing cooperative – find a customer base and serve it well so everyone shares in the bounty – is sound, yet joining a cooperative often is almost as risky as buying a penny stock. Some can not keep up with demand; others have rotting inventory; still others charge so much overhead that it becomes more profitable to go it alone.

Yet Country Natural Beef, a cooperative of more than 75 member ranches that operates from tiny Brothers, Ore., has not only managed to survive, but flourish.

Balance
Whether it is beef or pig eyes, in a niche market – CNB’s is natural beef – the seller has to balance supply and demand, deliver what is promised, and nurture relationships with customers.  Whether it sells beef or pig eyes, a marketing cooperative must do those things for its members, too. CNB found its beginnings more than 20 years ago at a workout gym in Bend, Ore. It was an unlikely place that forged an unlikely pattern of thought.

The gym owner complained to Connie Hatfield about the quality of commodity beef and the lack of wholesome, natural beef. In fact, the gym owner was so disgusted with his perception of low-quality beef that was available in grocery stores that he advised his customers to avoid beef altogether. Connie, a rancher and avid beef promoter who knew the nutritional value of beef, was horrified.

It was only a matter of time – and out-waiting reluctant grocery wholesalers who had to step out of their offices eventually – before Connie put the logistical pieces together. She just refused to leave before she understood the needs and limitations of each step in the marketing process. Soon, Connie and her husband, Doc, found partners for their cooperative: producers, a feedlot, a packer, a wholesaler and retail outlets. Then they sat down to figure out how to make a profit. Anyone who has ever heard the Hatfields speak has heard birth to the shelf,” says member and
CNB marketing partner Dan Barnhart, who ranches in the Oregon coast range.

Eight other members work as internal partners on the financial and production aspects of the business. Each internal partner receives a per-head commission in addition to the sale of their beef. The cooperative sells most of their beef to more than 100 natural food stores, and they are expanding to the university and hospital markets. A Mission and Goals Members of CNB work hard to ranch sustainably. This means they must make a living by taking care of the land by balancing financial and ecological components of each operation. Each rancher promises to follow GrazeWell principles and each allows the Food Alliance to inspect the ranch at least one time every three years. The Food Alliance ensures members employ environmentally friendly and socially responsible ranching practices by inspecting land practices, labor plans, chemical use and animal handling practices. This third-party verification builds confidence with CNB’s retailers and customers.

In return, CNB natural beef cuts are priced to keep the ranchers in business. Members created a hypothetical ranch and calculated the spaces between plants occupied by decaying litter. When water enters streams, members want the streams to flow year-round and have a minimum a reasonable budget and return on investment for that ranch. Of course, the cooperative has to sell an entire animal at a time, so each cut is priced based on its percentage of the carcass and demand. “We keep our pricing pretty stable. We don’t base it on the market plus a premium,” Barnhart says. “We’ve had a couple of minor shifts on cuts in the last five years, but that’s all. Most cooperatives follow a commoditymarket- plus-premium and commodity prices are driven by who-knows-what.”

“Country Natural Beef is 100% owner-financed,” says Doc Hatfield. “We sold more than $40 million in boxed beef last year and the cooperative’s operating costs run on 4% of those sales.” CNB’s mission and structure does not fit everyone’s operation. While the cooperative has a waiting list for members, some ranches have considered it and then decided not to join.

“We market to retailers who share our values of sustainable land stewardship and care where their food comes from. In the same way, we are looking for ranchers who share our values,” Barnhart says. “If they don’t agree, that doesn’t make them bad ranchers; they just have a  different mindset.”

“When a new ranch is interested, the first thing they do is fill out an application from the Food Alliance,” says Connie Hatfield. “Then the Food Alliance comes and inspects the ranch. Some people aren’t comfortable with that idea and that’s okay.”

“Our group has created a community of shared values. We’re all spread out so it’s not a community of place, but certainly we share the same values,” she says.

Communication
One of the unusual aspects of CNB is the amount of communication that occurs among all of the members. Every member is required to attend the annual customer appreciation dinner, two CNB business meetings each year and a set of two-day, in-store demonstrations. In addition, members talk on a weekly conference call.

“We might have 70 or 80 or 90 people on the phone every Wednesday morning,” Barnhart says. “Hatfields and the marketing team make the day-today decisions that have to be made right then, but everything else comes back to the membership.”

“We have the husbands and wives and families involved,” says Doc Hatfield. “We have 75 directors on the board and we operate by consensus. There’s no five-member board of directors that makes all the decisions.”

And the members talk to their customers. Stores contact Barnhart when they plan a special event and he asks members to volunteer to cook and serve the highlighted beef product. Periodically, Barnhart will organize a store blitz, when CNB members serve in six stores in one town in one weekend. The members travel together, stay in the same hotel, enjoy the company and spread their message to more customers. “Once you meet your customers, you learn that not all environmentalists are whackos. Their concerns are legitimate and they have families just like we do,” Barnhart says. “When you know your customers, it gives you more motivation to do what you’re doing right.”

• • • • • •

GrazeWell Principles
Members of Country Natural Beef strive to manage their resources according to the following principles:

1. Good management is goal driven. Each member ranch in Country Natural Beef / Oregon Country Beef has a written set of goals that describes the desired health and appearance of the land they manage and live on; the desired products they hope to derive from the land, their livestock and themselves; and the type of lives they wish to lead. In addition the members describe the actions they are taking to achieve these goals.

2. Water is the most limiting natural resource. Members manage the land so that all precipitation gets into the soil that it falls upon and is available for plant growth for as long as possible. To achieve this, members strive for a dense stand of perennial plants with of sediment in them, with the streams lined with shrubby vegetation.

3. Livestock grazing during the times of year when grass plants are growing is done in a manner that minimizes the re-biting of plants after they have been grazed and maximizes the time of rest between grazing. On non-irrigated rangelands, members minimize the amount of time livestock are in a particular area while plants are growing. Once cattle leave an area they have grazed, members maximize the period of time before they return. In areas where re-biting of growing plants does occur, members defer those areas from grazing during the next growing season. When plants are growing, members leave enough vegetation behind that the plant has photosynthetic area with which to regrow.

4. Truly healthy and productive land is biologically diverse. Members prefer a diversity of grasses, forbs shrubs and trees over a monoculture. Rodents, insects, birds, predators and other grazing animals all have their role in a healthy ecosystem. Members adapt their management to fit the individual environments rather than fitting the environment to their management. Grazing is planned in advance to coordinate livestock presence and forage removal with watershed, wildlife and human needs.

5. Land management decisions are based on the long-term health and productivity of the land rather than to maximize short-term gain. To make sound decisions, members make sure their decisions are in accord with their long-term ranch plans and that they are economically, ecologically and socially sound.

6. By grazing livestock on land that is ecologically healthy and in a manner that is compatible with the environment, members rarely have the need for antibiotic treatment and eliminate the use of growth hormones and feed additive antibiotics. Routine immunizations and sound management are all their cattle require to flourish.

7. By grazing well, members hope to benefit not only the land and their families, but society as well. Members want their final product to be good food at a reasonable price that is an integral part of a healthy diet. Members want their customers to know that their purchases are helping the land as well as people.