Why the U.S. Veal Industry is Poised for Resurgence
March 18, 2020
Ryan Anguilm and his son, William, enjoy working together with the rest of their family, raising starter calves for Midwest Veal, LLC in northern Indiana. ( Maureen Hanson )
It’s something akin to the long, lost cousin who shows up at the family reunion and turns everyone’s head with his handsome family and solid career. Nobody remembers much about him, other than he’d been through some rough chapters in his life – but, wow, look at him now!
The dairy industry’s reinvented cousin is the veal business, an entity staging an exciting second act after years of decline. And like the phoenix that rose from the ashes in Greek mythology, it is poised to come back stronger and smarter than before.
An industry with a past
If you’re a dairy producer who candidly admits that you don’t know a lot about veal, that’s okay. But you should. You might play a role in the veal production chain, and you definitely benefit from the industry’s existence.
“Veal is the sustainability role model in animal agriculture,” said Dale Bakke, Director of Technical Services for Strauss Veal Feeds, Watertown, Wis., and President of the American Veal Association. “We take dairy bull calves that have little value in the rest of the dairy production chain, feed them co-products from dairy manufacturing, and turn them into a highly nutritious, premium food product, plus luxurious calfskin leather from the hides. It’s the ultimate upcycling story.”
That’s not to say, however, that veal hasn’t taken its lumps along the way. In 1944, American consumers ate an average of 8.4 pounds of veal per year. By 2016, U.S. per-person veal consumption had dropped to just 0.2 pounds. For one thing, ethnic veal eaters – citizens from the traditional veal-eating cultures of Germany, Italy and France – became more “Americanized,” and their surviving generations did not carry on the tradition of eating veal.
For another, it is no secret that the veal industry has suffered multiple black eyes over the years. Some were consumer misperceptions, others were genuine welfare issues, but they all pointed to the need for a major overhaul of the way veal was produced in the United States.
New standards evolve
More than a decade ago, members of the American Veal Association vowed to upgrade veal housing, with a pledge to transition completely to group pens in which animals could move freely, rest comfortably and socialize with other calves. They accomplished the goal inside of their self-imposed, 10-year deadline. By 2017, more than $150 million had been invested in upgrading U.S. veal facilities.
Today’s veal barns are spacious, well-lit, expertly ventilated and stocked with healthy, thriving calves. On average, square footage per head has approximately doubled, compared to the number of animals that used to be housed in a similar space. At the same time, drug use has gone down precipitously, and calf performance has gone commensurately up.
“We used to think it would be impossible to profitably raise calves without many of the medications and practices we used to employ,” said Steve Anderson, Production Manager for Midwest Veal, LLC, North Manchester, Ind. “Now, we can’t imagine going back.”
It’s important to note that the type of veal to which Anderson refers is milk-fed veal, also sometimes referred to as “formula-fed.” Calves are raised from birth to market on a generous diet of specially formulated milk replacer, along with water and a grain-and-chopped-forage ration of about 12 to 13 percent protein to satisfy natural chewing instincts and promote rumination. Tethers and crates are no longer employed. In most systems, calves are cared for individually from birth to about 6 weeks of age, then combined with other calves in groups of 2 to 5 animals. Marketing occurs at 20 to 24 weeks of age, with animals weighing around 500 pounds live.
Milk-fed veal animals produce the highly desirable, tender, flavorful cuts of veal that make their way to restaurant, food service and grocery outlets. It represents about 85% of the total veal produced in the United States, and should not be confused with “bob” veal, which comes from very young calves that are sold for harvest shortly after birth, usually at less than 150 pounds. Limited value from bob veal calves is derived primarily from their hides and a small meat yield, mostly in the form of ground veal. These animals make up less than 10% of all veal calves marketed annually in the United States.
“We work to be very transparent with our production practices and facilities, and one thing that always surprises visitors is the size of a market-weight veal calf,” said Rob Supancik, Sales Service Representative for Formula 1 Feeds, Inc., New Milford, Pa. “A market-ready veal calf is about half the size of a full-grown beef steer.”
Another point of interest for consumers is that the life span of a milk-fed veal calf actually is on the long side of all meat animals. When harvested, veal calves are about the same age as market-weight pigs, and much older than lambs or poultry. Plus, veal calves are the most efficient converters of feedstuffs to consumable protein for human consumption, points out Sonia Arnold, Manager of Research, Nutrition and Quality Control for Marcho Farms, Inc., Souderton, Pa. “A veal calf can convert 2 pounds of feed into 1 pound of high-quality, edible protein,” she said. “For chickens, that ratio is about 1.6:1, and for pigs, it’s around 3:1.
Anderson said very few animal health pharmaceuticals carry FDA-approved labels for veal, so virtually all medications they do use are prescribed by a licensed veterinarian within a valid veterinary-client-patient relationship. No artificial hormones are used, and veal production does not involve castration, dehorning or tail-docking – all sensitive consumer issues that are bypassed completely in the veal production system.
Virtually all of the milk-fed veal in the United States is raised on farms certified in Veal Quality Assurance (VQA), a Beef Checkoff-funded program that promotes high standards and educates veal farmers on best practices for food safety, animal care, environmental stewardship, employee management and community responsibility. Many veal calves also are identified at acquisition with an RFID tag that provides traceability for the rest of its life.
Finally, there is the issue of iron. For decades, there was a widely perpetuated myth that veal calves suffered “forced anemia” and had iron withheld from their diets to produce pale meat. “An anemic calf is a sick calf – one that wouldn’t perform and possibly could die,” said Bakke. “Creating anemia is absolutely not our goal, and never has been.” To the contrary, he said veal operations routinely take blood samples from every calf periodically throughout its lifetime – typically at about 3 weeks of age and again at 10 weeks. Any calves registering blood iron levels below about 8 g/dL receive supplemental iron injections to ensure they are healthy and not anemic.
Consolidation with family values
Like many U.S. agricultural sectors, veal business ownership and production structures have evolved over the years. Decades ago, there were dozens of packers that processed veal dotting the map of the upper Midwest and Northeast U.S. Today, there are just a handful.
The new industry housing and production standards also were impactful. Some producers were unable or unwilling to make the capital investments to convert their facilities or build new ones, choosing to exit the business instead.
As a result of these and other factors, most of the milk-fed veal industry in the U.S. now is highly integrated. The same organization owns the calves and supplies the feed, from acquisition shortly after birth, to finish. Some, like Marcho Farms, are completely vertically integrated in that they also own the packing facility and brand their retail products. Others follow a horizontal integration model, in which ownership stops when the animals are sold to the packer.
All rely on contract growers to raise the animals. Typically, the growers own their buildings, with feed, veterinary protocols and management oversight provided by the company that owns the calves. Many growers are Amish or Mennonite farmers who have a large family labor force, which lends itself well to individualized and attentive calf care. The arrangement provides a steady, guaranteed income stream for growers – often with performance incentives to capture extra income -- and excellent caretakers for the veal businesses.
For Ryan Anguilm of Wabash County in northeastern Indiana, contract raising calves provided a perfect income-producing alternative when he left dairy farming. He dispersed his 150-cow herd in 2018 when he recognized the economy of scale and capital investment that would be required for him to stay competitive long-term. Still, he was reluctant to leave behind the rural lifestyle and animal husbandry all together, and especially valued the work ethic that raising animals provided for his 4 growing children.
Anguilm ended up raising newborn calves for Midwest Veal in a 432-head facility less than 2 miles from his home. He continues to raise row crops on his own acres. “It’s been a great arrangement, and still allows us to instill responsibility in our kids,” he said. “We all take a lot of pride in raising healthy animals and getting them off to a productive start. When a new group of babies comes in, it’s all hands on deck for several weeks. The animals depend on our efforts for their welfare, just like when we were dairy farming.”
Arnold said that’s an aspect of veal production that she enjoys the most. “Veal is one of the few agricultural sectors that has not gone the route of, ‘Go big, or go home,’” she stated. “The farms are fairly small, and can be managed by one family while providing a reasonable income. I think there’s a lot of societal value in that, which we’ve lost in other avenues of agriculture.” A little simple math confirms this, when one considers there currently are about 500 veal farms in the U.S. and 200,000 milk-fed veal calves marketed annually. That equates to about 400 head per farm – or two “turns” – produced annually.
The path forward
The real challenge for the veal industry now is not so much on the production side, but in sharing the positive story with – and introducing a premium delicacy to – a whole new generation of consumers.
“As a Millennial myself, I can attest that my generation in general wants to be highly engaged and participatory in our consumer habits,” said Arnold. “We like ‘experiential’ eating, and while there is a trend toward more plant-based diets, many Millennials still love their cheese and good meat – and the more unique the better. Veal has an absolutely amazing profile to feed these trends.”
To its credit, this small-but-resourceful industry is churning out a vast array of professional and user-friendly promotional tools and educational pieces. Efficiently using limited Beef Checkoff funds and partnering with the North American Meat Institute, they have produced www.vealfarm.com, a website featuring modern veal farming practices and facilities. A companion site, www.vealmadeeasy.com, features veal cooking tips, nutrition information and a wide assortment of easy and attractive veal recipes. Both sites are actively promoted on social media.
The good news: it appears to be working. For the first time in decades, U.S. veal consumption increased in 2019, with domestic harvest up 10% in the fourth quarter. The trend continues into 2020, with a production increase of 8% over year-ago levels in the first quarter.
An industry that was arguably on the verge of collapse is now returning to growth mode.
Still, there is more work to be done. The industry is striving to inform more consumers about veal’s extraordinary nutrition package. According to the American Meat Science Association, a 3-ounce serving of veal contains just 166 calories, while providing 29% of the recommended daily intake of zinc, 36% of niacin and 23% of vitamin B-12. In short, it provides a fat and calorie profile similar to chicken, but with the nutrient density of beef, and a uniquely tender texture and delicate flavor. For these reasons, veal is a popular choice among elite athletes.
On the animal nutrition side, veal companies have become incredibly nimble at utilizing virtually any form of dairy co-products that may need a home at any given time. Whey, skim milk, whey protein concentrates (WPCs), and whole milk all regularly are converted into a consistent feedstuff for veal. A mislabeled run of bottled milk? They can use it. Spring flush overload? They can use that, too.
“Veal production definitely supports the dairy industry by adding value to its calves and co-products, and it also addresses consumer concerns about food waste,” said Supancik. He noted about 30% of all whey solids in the U.S. go unused nonetheless, so there’s clearly opportunity to feed more veal animals. “The more we can increase demand, the more we can continue to add value to the dairy sector and grow our industry at the same time.”