Here is Jo Robinson's reply on why you pay more for grass fed beef than
grain fed in the USA, whereas in Australia (and no doubt many other
countries) grass-fed is way cheaper. Most exported Aussie beef is grain fed
:-(.
Ben Balzer

JOR- "On anyone's books, grassfed beef is cheaper to produce than grainfed
beef. But not a great deal cheaper in this country, partly due to our hefty
grain subsidies.  Right now, it's cheaper for a farmers in some parts of the
country to overwinter their cows on grain instead of high quality hay.
(Assuming that they have to purchase both.)
     The real inequities come into play after the animals have reached
market size. Many grassfarmers have to pay $1 a pound to turn a live animal
into individual packages of meat. I don't have exact figures for the
conventional system, but my guess it's only half as much. (This is mainly a
matter of economy of scale and the fact that the meat processing industry is
tailored to meet the needs of the feedlot industry.) Finally, feedlot
operators do not have to pay additional time and money advertising their
products or finding a place for them in supermarket display cases.
     Australia seems quite different in that you do not have a meat industry
that is focused exclusively on grainfed products. Also, the cost of grain in
your country is higher than it is here, even when our grain subsidies are
removed from the equation.
     But there's another reason that grassfed products are more expensive
than grainfed products here in the States. Some grassfarmers are simply
charging too much for their beef. They are targeting their advertising at
affluent, health conscious consumers who are willing to pay a great deal for
the privilege of eating wholesome food.  Due to the lack of competition,
they can charge whatever the traffic can bear. I found this to be especially
true for the grassfed bison industry a year or so ago.  Even I balked at
paying $12 a pound for the meat. Now that the "bison bubble" has burst,
however, the prices are becoming more reasonable.
    My goal is to create enough demand for grassfed products and nurture
enough grass-based producers that this fledlging industry can begin to take
advantage of the economy of scale. This increased supply will stimulate
competition that will be another factor in helping to keep prices
reasonable. We're about ten years away from that goal, unfortunately. Until
then, people will have to pay more for grassfed products, unless they are
willing to purchase beef by the half and store it in their freezers. "