Episode 131: Controlling Your Own Supply Chain with Dave Fischer

Hi, friends, this is John. Welcome to the Regenerative Agriculture podcast. Today I'm here with Dave Fisher from Indiana. Dave is someone who I've heard quite a bit about his work with his farming operation and also with the marketing work that they've been able to do and connecting directly with consumers for the products that they're producing. And, you know, this is such a foundational piece. I think it's important for us. If we want to be really successful as farmers, then there is a certain level to which we need to decommoditize ourselves, that we need to decommoditize our operations. I think this is a fundamental aspect of being particularly successful as individual farm operators. So, Dave, thank you for being here. Thanks for being willing to share your wisdom and experience. Can you offer some context for our listeners of the history, your personal story and the scope of your farming operation and everything that you have going on?

Sure, be happy to. First of all, thanks so much for having me on. I feel like I know you because I've listened to, I think, pretty well every podcast you've ever created. So, you know, first of all, I really appreciate those podcasts and you know, other people, the Rick Clark's podcast, you know, Gabe Brown's webinars and so forth, those have been so helpful for me to just really understand more what's going on. So, you know, I'm happy to share the little bit of knowledge that we've kind of gained over the years and just tell our experience. So I'll start off with kind of explaining what we do. So we have really two separate businesses. We have a farm that is a cattle farm. That's all we produce. We don't sell any grain, don't sell any other livestock off of our farm. We own about 750 acres, but we either rent or custom graze for our other people, custom graze for us about another thousand acres somewhere in that range. So that's kind of our farming operation. And we do it all the way from cow calf. So we got over 500 mama cows all the way to finish. We finish around 1000 to 1200 calves a year as well. So that's the farm business. And that's really kind of my day to day. I really manage that area. And then we also started 20 years ago selling direct. So we sell all of our beef direct to every single animal we've produced here over the last 15, 20 years. We sell through our meat business. Our meat business, like I said, we started with our partners, a local processor, Sander, processing It just really worked out well that they opened up a new facility in 2003 that was 10 miles from our house. We started our business in 2004, so it just really worked well and made a lot of sense. We kind of grew up with them. When they started, they had five employees. I think almost every single one was a family member. But now they're. I'd say There are probably 50 employees, something like that, across two sites. So that meat business, we sell directly to mostly restaurants, universities. That area, we do sell some direct, but 95 plus percent of our business is selling to the restaurants, universities, microbreweries, those kind of things. So we sell our beef through that business, but we also sell our neighbors pork. We sell a lot of Amish produce and Amish maple syrup, eggs and so forth from the local community that I've really enjoyed working with over the years and so on. The meat business, my wife really runs that operation. She does a great job of filling all our customer orders. We fill about 200 orders with an average of about five line items per order every week. We produce every week. We haven't missed a week since we. We started back in 2000, actually, since we went to weekly, which was in 2006. And so she really manages that. Does a great job with that. She's got a background as a nurse and actually nursing instructor. She's really good with the attention to detail that it takes to make sure the customers get their orders on time. And then also my son, my oldest son, Joseph, rejoined in the business five years ago, and he's our sales manager. He lives in Indianapolis, where a lot of our customers are. I should have mentioned we're down in southern Indiana. We're about 2 1/2 hours south of Indianapolis. We're only about 30 minutes from the Kentucky line. And a lot of people think of agriculture in Indiana as the flat corn and soybeans fields of central and northern Indiana.

Only if they've not been to southern Indiana.

Exactly. And I always say it's beautiful to look at these hills that I'm looking out my window at, but a little bit more difficult to farm, in my opinion, but works good for a cattle farm. Not as good on crops, but, you know, we do have, I would say, where the hills kind of flatten out on top. That's where our crop fields are at. And we have about 300 acres or so on our. On our farm of, you know, what people would consider your typical crops. And I'll get more in details of what exactly we're doing with, with those.

I do want to dive a bit more into the, into the farming operation. But you've given us a great intro and a great. To your meat processing and meat distribution specifically, what is your primary sales channels? Is it online sales? Is it in the local region? You said you have 200 orders coming in or shipping. 200 orders per week. Is it direct to consumers? Restaurants? What does your distribution chain look like?

Our direct to consumer, we do that off of our website and also we have a lot of information on our website. So I probably should go ahead and tell folks that if they're sitting there, it's Fisher Farms with a C. So F I S C H E R Farms I n for indiana.com so check that out. But we've got a lot of our regenerative ag practices on there so people can go to that website and order. Again, it's not our primary business. It's probably only 3, 4% of our sales. We get about 40 orders a week. But again it's lower volume. So our primary business, I'd say our number one customer is Indiana University. They've been a customer of ours since like 2007, somewhere in that range. But they started using us for all of their dorm proteins about seven or eight years ago, something like that. And so you know, they've got 9,000 freshmen walking in the door into their dorms every August. So they eat a lot of burger and a lot of other items. So they've been a great customer, been great to work with. We host numerous classes that come down to our farm and so forth. So that's a big part of our business. But and then we also sell to like Butler University, Wabash College and quite a few. I'm probably missing about four or five universities. But then we also sell to microbreweries. Got a few kind of microbrewery chains. And to me the classic example is if you go into a local brewery and you're buying a local beer, well you want a local burger to go with it. And so these microbreweries have really been good for us as well as we just sell to a lot of restaurants. Anywhere from the chef owned restaurants to ones that have like four or five or six restaurants, kind of the micro chains never to. We don't sell to any of the bigger chains. Obviously the volumes and the cost would be prohibitive to us. That's really our market. We like that approach in that it's very repetitive. We can butcher right now. I should have said this up front. We're butchering about 40 beef a week, something like that, and also about 80 to 90 hogs a week. All the hogs come from a neighbor of ours. They all come from one farm. They do a really good job on producing really good quality pork in a natural manner. So yeah, that's a big part of our business. Basically we're taking orders every Monday, slips into Tuesday and Wednesday and so forth, and then we're cutting to order every week.

Oh, interesting.

Yeah, I should have mentioned that. My background. So first of all, when I got out of high school, I'll date myself here. But in the mid-1980s and you know, that was the farm aid time period when things weren't going well in agriculture and I knew that I really liked production. You know, I was really big into the farm all through grade school, high school and so forth, and even through college. And I really figured out that I liked producing things. So I went to school, went to Purdue for industrial engineering, got my master's in it. And then I worked for a couple of aluminum companies. Starting off, there's some local aluminum companies that I worked for. And then I got into really more of the simulation modeling of the plants and really enjoyed that. And then a supply chain company that I worked with hired me to be a supply chain consultant with software. And I did that for about 10 years. Then working for them led me into a lot of really good companies to really understand their process for really planning. I wasn't as much factory floor type stuff, but really more planning the operations, dealing with orders coming in, forecast and so forth. It actually led us to live in Germany for two years to work with Siemens over there and just really learned a lot from Siemens as well as just fascinating to live in another culture. So learned a lot with that. In 2002 I said I pretty well had enough of this, I should actually tell the story. Obviously with consulting you're doing a lot of traveling. So one week I was lucky enough to get home Friday evening in time for the family dinner and my wife looks around the table and says, what should we do this weekend? And my two and a half year old son, who's now part of the company, stood up on his chair and said, I know daddy, you can sleep at our house. So that really hit me hard. He didn't even think that I lived there anymore, it wasn't my house anymore. So we stopped the traveling about a month later and it's worked well.

Wow, that's a pretty hard hitting story when you stop to internalize that.

Yeah, exactly. It's left an impression on me, that's for sure. So, you know, like I said, in supply chain, one thing we really worked with our customers on was reducing inventories and minimizing inventories. Generally, inventories are basically for lack of information. You have to have inventory. And so we've really worked on reducing our inventory and making it as fresh as possible. So again, our general approach is we take orders on Monday. I'll simplify things a little bit. We take orders on Monday. We start processing all the animals, including the beef that has been dry aged for 14 to 17 days. Before that, the pork is killed that week. You know, you want pork fresh as possible. You want beef with that nice dry age on it. So we're starting to, you know, pulling those out of the cooler. We start processing on Monday and just working to fill all those orders. Again, we've got a computer system that we wrote to, you know, really handle all this complexity as simply as we can. We've got like 2100 different SKUs, so different individual products. But, you know, if you go across it, you know, it's a difference is a four ounce fillet versus a six ounce fillet.

Okay, got it.

Eight ounce fillet. You know, all those, each one's an individual.

But still, still a lot of complexity.

It is. But, you know, if you kind of boil it down to the nice thing is that each restaurant usually orders about 10 different items, you know, and, you know, we, our sales team, again, led by my son, really works with them to understand what they're, you know, what they've used before, what they're interested in. Is there a special cut that we can do for you? And so forth. And then every week it's just, okay, how much warranty do you want of each of those items? And so, yeah, that's kind of how we work. The nice thing is it's very fresh. We butcher the hogs on Monday, start processing those on Tuesday. A lot of times they'll be to our customer already on Wednesday. Wow. Very, very fresh pork and cryovac. So we get a really nice long shelf life with it.

Wow. I was about to ask that question. What does the. What is the delivery time? If you begin processing beef on Monday, what does the delivery time look like for the beef as well?

So, yeah, on the beef, we'll start processing that on Monday. Some of it actually goes out the door late Monday afternoon, and our customers are getting it on Tuesday, but I would say the bulk of it goes out on the local delivery truck on Tuesday. Wednesday, Thursday, they Pick up around noon from us. We've actually worked with a company out of Indianapolis, Piazza produce now, since 2008. And what they do, you know, they're delivering produce to large percentage of the restaurants across Indiana. Even if a restaurant uses Cisco or US Foods for their meat and for other items, they might use Piazza Produce for their produce. So they've got a really wide distribution network, 150 trucks that go out every day. And so what they do, they're down in our area delivering produce to local restaurants. When they're done, which is again, about noon, one o', clock, they stop in, pick up our meat, take it back to their warehouse in Indianapolis, and then that gets divided out on the different routes. You know, each box we put a nice label on it that says what route this goes on. They divide that out to the different routes, and then their trucks start heading out, I think as early as like 2 o' clock in the morning, you know, to go to Cincinnati and so forth.

You know, sometimes it's a really small world. I seem to vaguely recall. Isn't Piazza Produce the family business that Anthony Carsaro was from that I interviewed here on the podcast? I think it might be.

Oh, yes, yes, yes, yes, it is interesting. Yeah.

So what is the. When you have this particularly fresh meat delivery, is freshness an appeal factor at all for the restaurants and the people that you're supplying?

Yes, very much so. I feel like they really lump it into quality. So we did a survey of our customers just last year and said, you know, why are you buying from us? Which is kind of a tricky question to ask sometimes. But the response we got back was, number one is quality. You've got to have good quality. And I'll go on a tangent here, but when I worked in the software business, quality was everything. And if you look at it, their variable cost of producing one more copy of their software is pennies.

Right.

You know, back then it was the 3 1/2 inch floppy disk. So if you're not top quality, you really struggle. Then all you're doing is competing on price. And as you had mentioned earlier, when we got into this, I did not want to be selling a commodity. I'm not out there trying to be the lowest cost producer, especially in our hills and so forth. I looked at it and said, I'm never going to be able to compete in the long run with people that have 300 bushel an acre corn. So we looked at it and said, what can we produce? Well, and it's obviously beef, and we can produce Some really good quality beef to where we don't have to take the commodity price for it.

I hear conversations from ranchers and farmers who are interested in producing grass fed beef. They're very interested in decommoditizing themselves. But there's this recurring conversation that they have a very difficult time generating sales. They are already busy farming and then they're taking classes on how to build a website and develop email marketing and do all these various things, which if that is not a skill set that you're familiar with and you're already very busy doing other things, that is just another level of frustration. So how did you approach developing sales? You have some very nice sales volume built up. And what was your approach to developing that into building that initial sales pipeline?

We started probably like everybody else does, going to farmers markets. And I always said farmers markets are a good marketing activity. They're not so good on a sales activity. And I really differentiate those two is marketing is just getting your name out there with sales, obviously getting the actual sale. So, you know, we'd go to the farmers markets, we're dragging our young kids with us every Saturday, Wednesday afternoon and so forth. We'd go to a few different farmers markets. And again, that was good to get our name out, but also to get a lot of good feedback. And so I really encourage farmers who are thinking about getting in this business. That's a really good way to start because you got to meet your customers. You know, that's one thing in agriculture. You know, how many people in agriculture actually get to meet their customer? You know, if you're producing commodity, and I should say the end customer, not the person you sell your grain or your livestock to, but the person that really consumes it. So with farmers markets you can do that. You can find out what people are interested in. And so, you know, we did that. But we also decided early on that, you know, farmers markets was not going to make our business. We're not real close to high population areas. Like I said, we're two and a half hours south of Indianapolis. So trying to make a living going up to Indianapolis, selling at farmers markets, and even in Bloomington, which is almost two hours from us, just really difficult to do. So we decided early on that we were going to try to tap into the restaurant business. So I took my daughter, I don't know, she was maybe nine or 10 at the time, and I went and knocked on 17 restaurant doors one morning and I got one. Yes. And that chef still buys from us. And I still tease him a lot and said, you know, if you hadn't said yes, I'd be doing something very different right now. But anyways, he's been great friend and just a great chef. And he was one of those guys early on that, yeah, he wanted quality, but he was more interested in buying local. And so, and then he introduced me to some other chef friends of his, mostly in Indianapolis. The 17 door example was in Bloomington. But he introduced me to a lot of good chefs up in Indianapolis. So what worked out well is I was able to, you know, kind of go end to end on the supply chain. And so, you know, I'm picking the genetics, I'm picking my bulls, picking my heifers and so forth. And then I'm going to raising them and developing the feed system and so forth and then selecting the animals, which is critical part of it, driving them to the butcher shop, they get butchered. And early on I remember I would take pictures and videos of the group of cattle that I was going to take in, just so I would remember two weeks later, after they were dry aged, what each animal looked like on the hoof and its history and so forth that I had in my head. And so then, you know, we're butchering the animals. I'm actually the one sorting all the stakes. You know, the high end steaks is really where you can identify the quality and where you've got, you know, the good animals. And from that then I, you know, we, my wife and I and kids at the time, we would box up the meat and I would go deliver it to the restaurant and you know, the restaurateur would then look at the meat and he would tell me about last week's meat. He'd tell me about, you know, what this meat looked like and, you know, what was quality to them. And you know, one interesting story I always talk about is that, you know, the one chef told me that our ribeyes weren't cut even enough. You know, I kind of looked at it and it was like three quarters of an inch on one side, an inch and a quarter on the other. Just kind of the way the animal and the processor cut it. And I didn't realize, but to him that's a major issue. You know, if somebody wants a medium rare steak and you've got that unevenness, it's not quality. You know, even though it's well marbled, really flavorful tenderness, it's still not quality because you didn't cut it right. So all that feedback, you know, packaging, all those kind of things, just great. Feedback for those first, you know, like five or six years. When I was doing that, you know, I started off, I was like, say our first delivery truck was my little blue Prius. And you know, we use that and there's two coolers in the back, ice down, and I could go deliver. And then we graduated to the family Suburban. So that was my delivery truck where we would pack the boxes in the back. One interesting thing is the width of our box was decided because I could get four of those boxes into the back of the Suburban and we still use those same boxes today, but then we would put ice blankets down on top of them and I'd go off and do my deliveries. So then we got into a refrigerated truck that's a unit that fit on the back of a pickup, went off and did that until one day I was driving up to Indianapolis and I looked out my rearview window or my mirror on the side and I could see smoke rolling out the back. Still joke that I was smoking the meat as I was delivering it. So anyways, I had to get rid of that truck. And then we got a regular like 20 foot box delivery truck that, that we used. And then I delivered with and that was great. Just about 2008 or so, we got to be where it was, 16 hour days doing the deliveries and talking to chefs all the way and so forth. And that's when Piazza approached us and said, you know, hey, why don't you let us do the delivery? But that early time period was really crucial for us to really understand what quality was. You know, I really messed around with a lot of different breeds. You know, I've had so many people early on tell me once you take the height off an animal, you can't tell what breed it is. And that's very far from the truth. Both the breed and then it's even within breeds, there's such a variation. You know, everybody wants Angus and we do primarily using this genetics, but you got to look within Angus, you know, the EPDs on the bulls and on the, on the mama cows as well is really critical. And so we've really tried to fine tune that over the years to pull the right genetics. And we do some crossbreeding. We do use shorthorn as a crossbreed, but again, shorthorn varies tremendously. And there's actually kind of, it's a mixture of different breeds. But we work with one breeder, Wakaroo Shorthorn, up in Rensselaer, Indiana. I really feel like they're the best shorthorn breeder in the world. They send their semen all over the world, and they've identified via DNA the top 20% from Mardley. And that top 20% pool is what I then pull from for those bulls that we use in cross. And then we do a lot of AI work. My favorite bull is a half shorthorn, half Angus bull that we then match up against cows that are, again, somewhere around that half to 75% Angus. We lean a little bit more Angus than we do shorthorn just to get the quality that we're looking for.

My goodness, Dave, there's about half a dozen questions that I want to ask. It would be fascinating to get into more into the conversation of cat, but you haven't really mentioned how quality or how the quantity. How much quantity of beef you were delivering in the early days versus what you are now. I imagine it's grown very significantly. And you spoke about how those. Those early years of having regular conversations and personal relationships with your customers really helped develop an appreciation for quality. How easy has it been for you to maintain quality as you have grown?

I would say our quality has consistently improved.

That's interesting.

We're still not to the point where I want to be on quality. You know, every steak, I want to have what we call prime plus. So it's got better marbling than prime. And then it's also very tender and flavorful. You know, everybody just looks at marbling, but there's also the tenderness aspect to it. And so we really have worked to improve our genetics, and now, as we've grown, to improve our cooperative herd genetics to where we're getting better and better quality. I just got to share that yesterday we got a text from a butcher shop that we supply, and he took two of the ribeyes home to have her family meal. And he immediately texted us and said these are the best steaks that he's eaten in his life. And that just, you know, to me, that's what I want to hear every time. You know, it's just that quality is just, you know, what allows you to charge more than the commodity price. And so you just got to really focus on that quality as you're going out. And like I said, quality is all decided by the customer. You know, I can't say what's good quality. They tell you what's good quality.

Well, now I want to ask you about pricing, and I also want to ask you about quality and particularly flavorful. You mentioned being flavorful and being tender.

Right.

How do you produce that? There's the genetic component but what are the various contributing factors that you've found most directly influential and impactful in producing steak that is tender and that is flavorful?

So, as I mentioned, number one, you got to start off with the genetics. And, you know, just a lot of research out there on which bulls are going to produce the most tender product as well as the best marbling. With those, you generally get the flavor side of things as well, although not always. One interesting thing is you can tell by the color of the meat how tender it's going to be.

Interesting.

So everybody's heard of dark cutters. One of the interesting things is dark cutters are not caused by, you know, the stressed animal and its genetics. You know, dark cutters are always pushed back to the farmer and the producer and saying, you know, somehow or another, we got four dark cutters out of your load, and we have to, you know, doc you for it. So, first of all, dark cutters are tough. I mean, they are awful. You can barely make ground beef out of the whole animal. So somebody needs to take the hit. But to me, it's not the farmer. Michigan State did a study, and I read it probably 15 years ago, so I can't remember when it came out, but they looked at it and said, what makes these dark cutters? And it came down to the blood sugar level. And so basically how long that calf has been off feed. And, you know, it makes so much sense. And we found out the hard way. We took a bunch of our steers to our local processor to be butchered. They had equipment breakdown and some personnel issues that day. They weren't able to get all of our beef butchered. So they let them stand in the pen for the next day until they butchered them. The next day. Well, it was like 95 degrees out. These animals were hot, and they didn't have any feed for, like, 36 hours. And so we had, like, five of the six were dark cutters.

Wow.

And I said, wait a second here, you know, you know, what's going on with these? We haven't had any dark cutters before. Why do we have dark cutters now? That's when it led me to the Michigan State study. And so now we have very clear working relationship. First of all, we don't take them down to our processor until we know they're ready for them. And then if they have any issues, they need to call us and we bring feed to them and make sure that the animals are in good shape and that it's one interesting. I tell anybody who's Working with us, that I want your cattle to be on feed until they walk onto the trailer, you know, And I'm fine paying for the feed that's in their gut that we're going to throw away. I just want to make sure their blood sugar level doesn't drop.

That's fascinating. That's a fascinating tidbit. I'm sure you've picked up many others of those as well.

It goes counter to what the industry will tell you about, you know, dark cutters. Dark cutters are always the farmer's fault. You get docked for it. But if you think these plants that butcher 6,000 or 8,000, 9,000 head a day, you know, a semi trailer owns can handle 40 cattle. So you just think of the number of trucks that are coming in and out of there and how long those cattle are waiting, you know, once they get unloaded, as well as on the trucks and so forth. And it just makes a lot of sense why they're going to have blood sugar drop and you don't have to go to a dark cutter to start impacting tenderness. Once that blood sugar starts dropping, you right away start impacting it.

That is interesting. Do you have any insights into how blood sugar affects the muscle density or why does it produce this particular effect?

I'm sorry, I do not. Like I said, it's probably been about 15 years since I read that Michigan State study, and I would recommend people to Google search for that.

Well, you do know that time is no factor in memory and recollection. You can remember things from when you were 2 or 4.

Right. Somehow or another, the older I get, the less that's working for me.

Yeah. A moment ago you mentioned pricing and being able to price your products very well. How do your customers think about the quality of the meat that you're producing relative to what they could purchase elsewhere? And how has that influenced your ability to price your products?

Most of the feedback we get on our quality is very good. And I think it's, you know, you had asked earlier, you know, how do we produce quality? And it's those genetics, it's the care of the animals and so forth. It's also the feed program. There was another study I read. I can't remember who did. Who did the study anymore, but basically said the calves need to gain 1.75 pounds per day pretty well from weaning or even before weaning throughout the rest of their life at a minimum 1.75. So you know how a lot of people will put calves just out on perennial Pastures like fescue and so forth. And you know, it's really hard for a calf to keep that game going. And I always explain it. You know, calves are like teenagers at that point. You know, teenagers are growing fast, they're building muscle mass, they're building bone structure and so forth. And if you starve them with a low energy, low protein diet, what they do is they pull the fat cells out of the meat and those fat cells do not return once you do that. And so where our quality is really, I think taking a leap above the conventional beef, one aspect of it is that we make sure that they have a good diet in front of them their entire life. You know, I'm staring out my window right now. We've got about 80 acres of a cover crop that are, some people would call it a cover crop, but it's really our mixed crop for the summer. I like to call it the C4 or the Summer annuals. And you know, that mix, we got like an eight way mix. And I, you know, just looking at those calves, I know we're, we're meeting their requirement at that point. But if there's time period where, where we don't have the pasture, you know, for whatever reason, then we're supplementing them with it with a TMR mechanic. A lot of distillers, grains, a lot of silage. We do only silage. We don't make any hay on our farm. So that keeping them well fed, keeping them gaining, making sure they have the nutrition, keeps those fat cells in the meat. And you know, once those fat cells are gone, they're lost. So, you know, the big feedlots will then pour grain to them at the end and you know, they want those skinny calves. You know, the farmer gets penalized if he's not providing skinny calves, you know, going into the feedlot. And ours are very fleshy. And then they put in 80% grain, where we put in 20% grain for our finishers from about £1,000 on up. And so with that, we're producing small lines of outside fat and we really get those little fat cells in the meat to really bloom to where they're larger. But we don't have the big chunks of fat around the outside. And everybody's familiar with rib eyes, where you get that big chunk of fat down the middle of the ribeye via genetics and with the feed program, we're able to really reduce that to where pretty well, you know, the whole steak is edible. So when we kind of explain that and show that to Chefs and customers, that's when they're willing to pay more. And it's also interesting that the big commodity guys, and it really comes down to four companies in the US Beef market. And those guys, I always say, they leave us this opportunity. And again, if you're doing 6,000, 8,000 head a day, they're grading those in about three seconds, is my understanding. Look at those cattle coming through. They cut through the 12th rib eye. They look at it, they make the determination, select, choice, and prime. What's interesting lately is most of those graders now are company employees. So just like our kids in school, they've got great inflation going on as well. So then what's amazing to me is.

That ribeye, then great inflation or grade.

Deflation, Great inflation is how I would look at it, is what used to be select is now choice. What used to be choice is now. And so basically we've worked to try to improve that quality, to let those chefs know how the quality is created and why it's different. And then the big guys, you know, I was just talking to a chef just a couple weeks ago, and he explained to me that he got three ribeyes in a case. One was fine, one looked really good, one was light colored pink and it was tougher, and one didn't have the marbling. And they're all in the case, all marked high choice.

Yep. Interesting.

And you got to look at it from a chef's perspective too. Our restaurateur, they're trying to please their customer. You know, at the end of the day, the person sitting coming into that restaurant is the one to determines whether it's high quality or not. And so one is the consistent sizing, you know, so if you've got a table of eight people or four people and two of them order the same steak, one comes out looking very different from the other. It just, it just has a bad impression on the customer. So that portion then also just the taste profile, you know, when you bite into that steak, is it a really good, you know, feeling in your mouth? So to me, that quality level and that consistency, consistency and quality is what's critical to trying to get a premium price.

One of the pieces that you haven't mentioned so frequently, when I have conversations with Stefan VanVleet on steak quality or on others, particularly on the flavor aspect, one of the pieces that I often hear emphasized is the diversity of plants going into the diet. And you mentioned that you're doing an eight way mix. How important do you believe having plant diversity in that Diet is to producing the flavorfulness that you are looking for. And it's also interesting. On one hand, I heard you mention that you are feeding distillers grains and you're feeding corn. And I know there's a certain segment of people who listen to the podcast who might hear that and cringe. And yet you're producing very high quality meat in very high quality, at least from a flavorfulness perspective. It would be interesting to know what that would look like from an omega 3, omega 6 fatty acid ratio, etc. I'm guessing you might have done that. But how are you thinking about the components of the diet in producing flavorfulness and producing quality?

To me, it's kind of like a crop. You got to have all the micronutrients as well as the macronutrients. So just feeding enough carbohydrates and protein is the enough. You know, you got to have that wide variety. And that's why, you know, I love these crop mixes that we plant because I know that's getting that, that wider variety, you know, same way with humans, right? You know, I saw a podcast the other day that said that we should be eating 30 different types of vegetables in a week, you know, every week to get that wide variety of nutrients. And so, yeah, I definitely agree. You know, same thing with cattle. And so we feed a mix that's got quite corn silage in it a lot of times. We'll also do forage, sorghum, distillers, grains. And then we do add about 20% grain to the diet. And we do that to really blossom those fat cells and to get that what we're considering quality to have those fat cells, those little fat cells in the meat. Interesting. You talked about Omega 3s and Omega 6s. We have not done that study yet on our beef. But I do have a neighbor who raises beef just like we do, and he sells his at farmers markets and so forth. And he's very concerned about the Omega 3s and Omega 6s. And by feeding the exact same way we are, his ratio is actually higher than the average grass finished beef.

Wait, hang on a second. That's just the opposite of everything that we're told is possible right now.

Again, we're not feeding conventional beef type approach. We're 80% forage, 20% grain at the finish. So we've got a high forage diet the whole way. And yeah, like I said, I don't know for sure on ours yet. That's kind of the next phase. We'd like to get into, but I would really suspect we're going to have some pretty good results on it.

All right. Well, I'll be looking forward to that because that could be another paradigm buster in a good way. Yep. Yeah. So we've spoken about the quality and pricing, but I actually think, I want, I'm sure that a lot of our listeners are interested in how are you able to price your products compared to the mainstream.

Yeah, you know, historically we've probably been 30 to 40% above, you know, high quality beef. You know, we're not going to compare ourselves with the supermarket ground beef and so forth, but, you know, higher quality beef, we're in that 30 to 40% above just because of our processing costs. When it comes down to it, you know, we can raise animals fairly, you know, competitively, not as cheap as the big guys. And you know, we don't do growth hormones. We don't do anything along those lines. No lactopamine or anything that really is a chemical to produce faster growth. So without those, yes, our cost of production is higher, but where our costs are really higher than the big guys is our processing. We're still in that 800 to $900 per animal range to process a beef and that's all the way through with patties and, you know, whatever we need to do on it. So that compared to, you know, I've heard the big guys, you know, years ago I heard they were around $150 ahead, but that doesn't include all the further processing. So, you know, by the time you get that done, it's probably $300 somewhere in that range. So still, you know, one third of our processing cost, that plus our higher production cost is where we have to make it up on price.

And do you think your higher processing costs are just a more reflection of compensating labor? Well, or are they reflection of your cutting to order and rapid order turnaround, rapid cutting process. What is contributing to that?

To me the biggest thing is a small plant. We're utilizing a plant that at its maximum can butcher 30 beef in a day compared to these huge numbers. And so that part as well as, you know, we're processing on burger, you know, lines that, you know, produce a stack of burgers and so forth. And you know, you see the other lines where they're producing like four burgers a second. I saw one line doing that, you know, their labor cost, their equipment cost that are spread out over more pounds is a lot less than ours.

You mentioned your very first restaurant customer choose to buy from you because you were local and today you have these diverse crop mixtures. You're feeding a high forage diet. And I haven't even looked at your website. Do you market yourself as regenerative? And I guess my question is, do your customers actually care about regenerative practices or is that a factor at all?

They do. But I would say again, in the restaurant business, what they told us was quality is number one, clean meat is number two. And then all the other things sustainable, what we're doing on carbon sequestration and so forth is down lower on their list. But you can't treat each customer as the same. Note. Indiana University is very interested in our sustainability practices. They come down and we've had. I remember in 2008, we did a quick analysis of our carbon footprint back then. So they're very interested in that. We hold or host three classes a year that they come and visit us on the farm and really understand that. But then, you know, you got other restaurants who really aren't interested in that at all. They just want good quality. And one thing we knew early on is we needed to establish a brand. That's why we sell everything under Fisher Farms. Even though our hogs come from Gooksale Farms, our neighbors, we talked to some early customers and said, okay, should we call this Fuxell Farms pork and Fisher Farms beef? And they said, you know, just way too confusing. Colorado Fisher Farms, we put it real clear on our website where our pork comes from. And that just makes it easier for the customer. But, you know, again, the cleanliness of the meat is one area that I think continues to grow. Back when we first started, everybody was about local and try to be hyper local and those kind of things. Now I really feel like people are really into, you know, what's in this meat and what's in the food that I'm eating. What are all these chemicals?

I was about to ask you the question of what does a restaurant mean when they say they want clean meat? What defines clean meat?

And again, everybody's got a different definition. What we say is, first of all, there's no chemicals added during processing, so we don't use any gases to brighten up the meat to make it pretty red or anything like that. We don't add any MSG to our sausages. You know, we try to use the rule that, you know, if that ingredient list includes something that's not commonly found in your kitchen, so it's not a spice, it's not a whole food, then it's not going to be in our product. So that's part of it. Then the other side is how you raise the animal. And what we really stress is no chemicals going into our animal. So again, no ractopamine, which is very common now in beef. No growth hormones, no antibiotics, except for when a calf is sick and never within six months of processing. And so we administer antibiotics to an individual animal, not to a group of animals and feed and those kind of things. So just a lot of little things to try to make that animals meat just as clean as possible. We are not organic. We've looked at that many times. And what we keep coming back to is our cost would just skyrocket trying to go organic. And we just don't feel like our customers are willing to pay for that. There is a subset of the market that will. And that's great. And I refer those folks to other people. They're just a subset of the market that really wants grass finished. And I promote seven sons here in Indiana. They do a great job on grass finishing beef. That's not our market. I would say that's probably one thing I would suggest to people as well is don't try to be everything to everybody. Pick an area, focus on that. And that's really what we've done. And our philosophy on that hasn't changed since day one.

As you've become better known in the local marketplace, how have you found the market demand to match with your supply? And I find it interesting to consider all of the. The cutting to order that you were doing and the very rapid order turnaround that also takes the right processing partner. You're very fortunate to have that processing partner, but all the whole demand supply. So you're obviously, with your background in supply chain logistics and processing this, it looks to me like you're running extremely tight on supply chain and on supply matching demand. So have you encountered situations where demand exceeds supply? How do you manage those situations?

We always try to forecast our beef production to be about 30% more than what we expect to sell. And so. And again, we're doing that. Over the last 15 years, we've added cooperative herds. A lot is it's kind of a fancy term for neighbors and farmers that we've known for a long time that are working with us now. And they've really stood.