Llano Seco Rancho

Producing and Marketing Organic Meats: Planning & Feasibility

THE CLIENT:
Llano Seco Rancho (LSR) was established by a Mexican land grant in 1845, before California joined the Union. It was purchased in 1861 by John Parrott and is held today solely by members of the Parrott family. The ranch has been farmed continuously since at least 1861, including a natural cow/calf program with 1,000 mother cows. The 14,000-acre ranch, bordered by the Sacramento River, is a model of sustainability; livestock and several crops are raised, while much of the land is held in conservation trusts.

In 2009, LSR began raising organic hogs and selling organic pork products including cut meat, bacon, ham and sausage. In 2012, the ranch conducted a pilot organic beef program in addition to their extensive natural beef production.

EXPLORING OPPORTUNITY:
Although LSR has sufficient demand for primary pork cuts, they sought to grow their overall markets as well as create additional opportunities for secondary cuts and animal byproducts that are more difficult to sell. LSR also wished to explore the feasibility of expanding their organic beef operations.

FEASIBILITY STUDY AND BUSINESS PLAN:
Morrison & Company was engaged to perform a feasibility study and, if the project was found feasible, prepare a business plan. Three primary questions needed to be answered: 1) Was there enough customer demand for both primary and secondary pork meat and byproducts to justify an increase in production? 2) Were there sufficient markets for organic beef to justify an expansion beyond the initial pilot program? and 3) What type of marketing program would best support the planned expansion in both areas? In addition, processing venues and related costs needed to be explored further.

Morrison & Company researched data on sales, marketing, pricing, distribution, and markets, and coordinated an outside market study on organic and pork beef cuts, offal (organ meats), and both continuing and new processed meat products. We consulted with experts in organic beef production and marketing to establish a realistic expansion schedule and distribution plan, and worked with a marketing professional who specializes in communication and marketing strategies for food and farming businesses. A marketing program was created and incorporated into the business plan we prepared for the project, which included multi-year pro forma financial projections.

OUTCOME:
With a detailed business plan backed by an independent feasibility study, LSR is proceeding with their market expansion project with a better understanding of the risks and rewards and a higher level of confidence in the potential results.