Butcher beef price

[rob2]

did a little net surfing today looking for the average retail beef price for all combined cuts. found a pretty little chart that showed choice beef price and select beef price. Current average retail price for choice is right at $5.10/lb, while select is about $4.90/lb. why does most farm raised butcher beef sell for at - or near the live weight price of fed cattle? instead of at or near the EQUIVALENT of the retail price? a lot of us utilize USDA inspected processing facilities, the cuts of meat are closely trimmed, the cuts/packaging is per the customers request... the main difference i see is fresh vs frozen. (or thawed vs frozen). I am not one who likes to put the screws to people i sell to. I try very hard to sell a premium product at an affordable price, as i am sure a lot of others are doing as well. But at the current price I sell for at $2.30 per pound + processing, I could increase my price a good bit and still be cheaper than Wal-Mart. Does the justification of butcher beef price stem from "that's usually how it's done" ? or are there real reasons that i need enlightened on?

rob2

 

[mncowboy]

Most recently we sold for 2.75 hanging carcass weight plus processing. (.48). Thats hormone/antibiotic free, free range corn fed beef. It has to be worth your time now more than ever when you can dump them at 650-700 lbs at $1.60.
Just my two cents.

 

[Tim/South]

People do not want to pay farmers anything. They do not want to pay for good hay, good vegetables or good beef.
I have been in this a long time. People think farmers have no overhead and are accustomed to working for nothing. Just the American mindset.

 

[highgrit]

The fact is last week Harvey's had NY. Strips on sale for $3.99lb. And a few weeks ago I saw hamburger for $1.79lb. And you didn't have to buy a half or whole cow. Most folks don't care where their food comes from.
If it fills them up and they don't get sick all's good.

 

[dieselbeef]

yep..grits got it covered..most of em dont even KNOW WHERE it comes from

 

[ibetyamissedme]

yep..grits got it covered..most of em dont even KNOW WHERE it comes from

Do you know where it comes from? It comes from beef producers like you folks here on this board. Thats right all that bad beef I read about on CT comes from beef producers. Crazy huh?

 

[mncowboy]

I wouldnt feed that pink 1.79 burger to my dog. You get what you pay for...

 

[Dega Moo]

I place the blame for this on .. us. Whose fault is it that the consumer doesn't know why the beef we sell direct off the farm is better quality and more affordable? And more convenient? Do we expect Walmart to do that for us? No it's our fault if we don't tell them our story and make it not only understandable, but compelling. I understand we, including myself, are probably to busy to build a real marketing program for freezer beef and I certainly understand how difficult it can be to get the cattle ready when the buyer is ready but to complain that those city folks don't even know where it comes from or they simply don't want to pay the farmer is .... ??? That guy is our consumer if not our customer and all we can do is denigrate him? There's a sound business strategy!

Personally, I think there's a lot of valuable marketing any farm can do to make really good inroads into this kind of business. A lot of folks don't have a freezer and freak out at the thought of finding one and sinking money in it. They don't even know where to begin. So go talk to a local appliance dealer and see if you can make a deal with them to direct some business their way. Solve that problem ahead of time for your customer.

Create flyers explaining the difference between choice and select beef. Explain the cuts they get, the amount of meat they get from a half or a quarter. Explain the whole process to them and put them at ease. Provide a spreadsheet that shows the current difference in costs buying at the local grocer, Walmart and yourself. Show them how your 3.00 a pound hanging weight is a bargain over that what they pay at Wally World. And explain what you mean by hanging weight.

 

[mncowboy]

The last cow we sold was in 1lb packages, $4.00 per lb.

 

[turklilley]

If your charging 2.30 hanging, you are charging the customer 3.83. plus processing. Only about 60% of hanging weight is what the customer takes home. 8% moisture loss, removal of bones,trimmed fat= 40 % gone.

 

[highgrit]

One of the problems we have is I want my money when I sell the cow. And I don't take Wic, Food stamps, or welfare so my market is a little limited. And the hamburger for $1.79 was great we used 5lbs.

 

[rob2]

If your charging 2.30 hanging, you are charging the customer 3.83. plus processing. Only about 60% of hanging weight is what the customer takes home. 8% moisture loss, removal of bones,trimmed fat= 40 % gone.

I've sold beef on the retail basis to restaurants (steaks & burger), but now only on the hanging weight. Selling retail I was required to weigh out and record all the cuts. I was yielding 75% of the hot carcass weight with the retail cuts - hanging 14 days, and deboning the sirloins and ribeyes. My current price of $2.30 on the hanging weight would be the equivalent to $3.07 retail + processing.

I really think that most of us who do the bulk sales of any quantity - started out finishing out only one or two at a time for our own use, or for someone in our immediate family. That puts the cost of the beef equivalent to the live weight. We're saving money raising our own beef - or we are going to provide our family with a good deal. As we work to expand our sales, we fail to realize that we are no longer doing it to save money for our own benefit - or to provide good deals to everyone who calls in an order. (not intended to mean "stick it to ya") We need to realize we're in business to realize a profit. The competition that exists between my beef business and someone else's would still be there, but it could be done at a higher rate of return for both of us. (Still leaving room for the consumers to save money). Currently, another local producer has his beef priced at $2.05. I will have little luck increasing my price selling locally until he raises his.

rob2

 

[ibetyamissedme]

In my opinion if you can not make a decent profit at $2.08 hanging, you may be placing way to much value on the little bit of your own labor that goes into finishing an animal.

 

[Dega Moo]

In my opinion if you can not make a decent profit at $2.08 hanging, you may be placing way to much value on the little bit of your own labor that goes into finishing an animal.

I like to think of it a bit differently when pricing. Let's face it, our customer could just go to an auction and pickup a fat and have it trucked off to a processor for butcher. So in a way, I'm competing against the sale barn.

Last I looked, fats are going for $130 to $132 on the live cattle market. Now you wouldn't get that selling at the barn but I would think you'd get maybe $119 to $120. If your carcass yields 63% on a 1400# fat you'd have hanging weight of 882# which would get you $1,834 at $208 cwt hanging. At $120 sale barn you'd get $1,680 minus barn fees and checkoffs. Your difference would be about $160 for that animal.

The question really becomes what does the customer get for the $160 difference and is $160 appropriate and enough for the risks I assume?

Right quick off top of my head. Sure there are a lot more...
... customer doesn't have to arrange shipping or trucking to the processor since I take care of that for him
... customer doesn't have to sit at an auction for 5 hours or so waiting for the fats to come through
... customer knows what his price will be when he buys from me
... customer has a relationship with me and my farm he can trust and rely on for information. He's on his own at the barn
... customer can come back to me if there's a problem with his beef. It wouldn't be straight forward buying through the barn
... customer knows something about the background of the animal he buys from me. Not so through the barn.

 

[ibetyamissedme]

In my opinion if you can not make a decent profit at $2.08 hanging, you may be placing way to much value on the little bit of your own labor that goes into finishing an animal.

I like to think of it a bit differently when pricing. Let's face it, our customer could just go to an auction and pickup a fat and have it trucked off to a processor for butcher. So in a way, I'm competing against the sale barn.

Last I looked, fats are going for $130 to $132 on the live cattle market. Now you wouldn't get that selling at the barn but I would think you'd get maybe $119 to $120. If your carcass yields 63% on a 1400# fat you'd have hanging weight of 882# which would get you $1,834 at $208 cwt hanging. At $120 sale barn you'd get $1,680 minus barn fees and checkoffs. Your difference would be about $160 for that animal.

The question really becomes what does the customer get for the $160 difference and is $160 appropriate and enough for the risks I assume?

Right quick off top of my head. Sure there are a lot more...
... customer doesn't have to arrange shipping or trucking to the processor since I take care of that for him
... customer doesn't have to sit at an auction for 5 hours or so waiting for the fats to come through
... customer knows what his price will be when he buys from me
... customer has a relationship with me and my farm he can trust and rely on for information. He's on his own at the barn
... customer can come back to me if there's a problem with his beef. It wouldn't be straight forward buying through the barn
... customer knows something about the background of the animal he buys from me. Not so through the barn.

I got $1.35 just last Wednesday for 1450# at the barn. Of course these are feedlot cattle, they are nothing compared to the high quality steers the hobby guys produce, you know the ones who feed out one or two head every year. They know how to finish cattle, I don't, you can just ask them they will tell you so.

 

[HDRider]

I did this analysis... You can play with the numbers to get where you want to be...

This drives you to about $2 on the hoof with $500 processing fee and other minor expenses to get to the average price I stated above.

 

[Dega Moo]

In my opinion if you can not make a decent profit at $2.08 hanging, you may be placing way to much value on the little bit of your own labor that goes into finishing an animal.

I like to think of it a bit differently when pricing. Let's face it, our customer could just go to an auction and pickup a fat and have it trucked off to a processor for butcher. So in a way, I'm competing against the sale barn.

Last I looked, fats are going for $130 to $132 on the live cattle market. Now you wouldn't get that selling at the barn .... beef. It wouldn't be straight forward buying through the barn
... customer knows something about the background of the animal he buys from me. Not so through the barn.

I got $1.35 just last Wednesday for 1450# at the barn. Of course these are feedlot cattle, they are nothing compared to the high quality steers the hobby guys produce, you know the ones who feed out one or two head every year. They know how to finish cattle, I don't, you can just ask them they will tell you so.

Let me rephrase ... It's not likely you would get that selling at the barn. So what was the live market on fats that day? They've been hovering around that $130 to $132 the last several weeks. It might have been someone bought one for their own processing.

 

[ibetyamissedme]

Let me rephrase ... It's not likely you would get that selling at the barn. So what was the live market on fats that day? They've been hovering around that $130 to $132 the last several weeks. It might have been someone bought one for their own processing.

They must have a damn big freezer to buy three pot loads of them. 12/18/13 Open at 131 3/4, Closed at 131.

 

[Dega Moo]

Let me rephrase ... It's not likely you would get that selling at the barn. So what was the live market on fats that day? They've been hovering around that $130 to $132 the last several weeks. It might have been someone bought one for their own processing.

They must have a be nice big freezer to buy three pot loads of them. 12/18/13 Open at 131 3/4, Closed at 131.

Nice pay day! And the cash market continues to rise. Video auction or physical barn?

 

[ibetyamissedme]

Local barn