A new value‐added strategy for the US beef industry: the case of US Premium Beef Ltd

US Premium Beef Ltd is a cooperative partnership between all segments of the beef industry value chain, affording each segment an interest in the key stages of beef production and processing, as well as an equal share of the financial risks and rewards. This “value‐added” strategy is accomplished through vertical integration and adding a quality‐based pricing structure to more closely link beef producers and consumers. The case study is an example of supply chain management as a strategic response to a mature industry. It also exemplifies how ownership structure of the firm, particularly the emergence of new‐generation cooperatives, is employed as a strategic factor in developing a new competitive approach in an industry characterized by sales decline and aggressive competition from substitute products such as poultry and pork.