Butcher Prices - Revisited

[Sherri]

Guys,

I work for a Public Traded company that makes 40 - 80% margin on products that they sell to the big kahoonas for where they make 40%.

These products are important (they save lives) but not near as important as the products you producers produce for consumption that fuels the brain power and energy for these folks to make these kind of margins.

The kahoona is #1 Retailer and the supplier is a # 30'sh in Fortune 100 consumer packaged goods.

You have a very valuable product that will become more valuable as time goes on. Transporting across great distances (and importing) is leaving a huge carbon footprint (check it out,more fuel emissions, and bookoo dependancy) and this supply chain requires 2 - 3 middle men making the huge margins (where's the true value ---- for kahoona #1.......).

You the QUALITY producers, risk-takers, lovers of the industry, lovers of the creatures, stewards of the environment (U.S. environment....shall I say more), mentors of our limited to null next generation (0% increase in pop in this sector -- our generation, no imports......), have the right, privledge and power to make a fair and equitable living, not to say profit.

Don't sell yourself short. You have a great product and you deserve fair, equitable and profitable rewards. Personally, I want you to flurish (spelling I know is wrong) and prosper. You mean more to me than any chincy Chinesse producer of trinkets, a mass supplier of packaged goods, and NY fashion designer (although sex appealing and I occassionly succumb) . You are the future that will fuel the future brain power and human energy.

DO NOT UNDERSELL YOUR IMPORTANCE, WORTH and VALUE........

KICK ASS, DUDES - SUSTAIN OUR and YOUR FUTURE. DO WHAT's GOOD FOR YOU SO YOU CAN DO GOOD FOR YOUR END USER FOREVER.
Sherri

 

[mitch2]

Sherri - 1st welcome to the boards. 2nd thanks for the positive words. I believe in selling off the farm, as I do that and I also sell at auction.

There are 2 main inhibitors in my neck of the woods that I think others can relate to.

1. The local processors are BUSY and unwilling to expand.. for various reasons. My favorite processor which is also the closest I have to schedule out 4 months in advance. Do you know how hard that is? Harvesting an animal is not a guessing game, at least not for me. Weather in itself can play a huge part of the animals growth, or slow growth. 2 weeks can make an impact on the finishing of an animal... this is my opinion.

I am small potatoes compared to many... and maybe I am way off...

2. So many people live paycheck to paycheck it is a burden for them to pay for that 1/4 or 1/2 of beef, even if it means saving money over the length of the year on the same amount and type of beef.

Michele

 

[hayray]

We have two different business here that I think that some of the readers are not realizing. A direct market freezer beef business is a completly different business then selling cattle on the grid or at the market. The direct retailer who trys to model their business after the commodity market and the market price for hot carcass weight is cheating themselves out of a lot of money. Direct marketing your own beef you then incurr a lot of the same costs as a meat distributor does. If you are truely retailing your beef then why charge by the hanging weight at all? I charge by the packaged meat price and do all the up front costs of processing and storage, and transportation myself, and selling at a retail packaged beef price, not letting the processor determine my priceing based on the hanging weight. The two types of marketing business are not at all the same and need to be treated differently, then you don't feel bad about charging more then the market price and instead feel good about getting paid for your extra services and hopefully quality. I charge $4.50/lb for a whole beef packaged and delivered to your door, that usually is around 400 lbs. All USDA inspected and dry aged for 14 days. A Rib steak or T-Bone is gonna cost $12.75/lb. At the Michigan auctions now we are lucky to get $.84/lb while the rest of the country is another 5 to $10/cwt above us. No way I am gonna feel good selling my cattle that way.

 

[somn]

We have two different business here that I think that some of the readers are not realizing. A direct market freezer beef business is a completly different business then selling cattle on the grid or at the market. The direct retailer who trys to model their business after the commodity market and the market price for hot carcass weight is cheating themselves out of a lot of money. Direct marketing your own beef you then incurr a lot of the same costs as a meat distributor does. If you are truely retailing your beef then why charge by the hanging weight at all? I charge by the packaged meat price and do all the up front costs of processing and storage, and transportation myself, and selling at a retail packaged beef price, not letting the processor determine my priceing based on the hanging weight. The two types of marketing business are not at all the same and need to be treated differently, then you don't feel bad about charging more then the market price and instead feel good about getting paid for your extra services and hopefully quality. I charge $4.50/lb for a whole beef packaged and delivered to your door, that usually is around 400 lbs. All USDA inspected and dry aged for 14 days. A Rib steak or T-Bone is gonna cost $12.75/lb. At the Michigan auctions now we are lucky to get $.84/lb while the rest of the country is another 5 to $10/cwt above us. No way I am gonna feel good selling my cattle that way.

So who sets the cutting order yourself or the customer?

 

[novatech]

:clap: :clap: :clap:
I applaud the first 3 posts above. Farmers and ranchers have been cheating themselves out a living for years.
Farmers and ranchers need to understand that they are in business. All successful businesses recognize they have to market their product. If you do not you will never get profit for your efforts.

 

[hayray]

I have a standard cut order and then a good percentage of my customers give me customer orders.I just found it to be a lot less confusing and more profitable then dealing with the hanging weight situation. I did that initially but felt uncomfortable selling a low yield grade heifer to some one at the same price as compared to a steer, this way they pay for what they get.

 

[mwj]

So when I ask all of you a fair $7.00 a bushel for my ''feed'' corn it is ok. I am not going to ask mkt. price because I would be cheating myself :roll:

 

[Red Bull Breeder]

In Arkansas and Mo. and maybe other states, you have to collect sales tax on cuts of meat, But not whole carass, halves or quarters.

 

[somn]

I have a standard cut order and then a good percentage of my customers give me customer orders.I just found it to be a lot less confusing and more profitable then dealing with the hanging weight situation. I did that initially but felt uncomfortable selling a low yield grade heifer to some one at the same price as compared to a steer, this way they pay for what they get.

I guess when charging $4.50 a lb you really won't get hurt to bad on a grind it all for hamburger cutting order. I could see if you had one set cutting order and that is what everyone gets regardless you would have less problems with customers. But by allowing some to set there own cutting order don't you think you are opening the door for problems? Or do you sell strictly by the halves and wholes? With no split quarters.

How did you end up getting lower yielding heifers? Were they first year hiefers that didn't get bred so they went to slaughter?

 

[larryshoat]

So when I ask all of you a fair $7.00 a bushel for my ''feed'' corn it is ok. I am not going to ask mkt. price because I would be cheating myself :roll:

Oh no that would be different, what good would it do them to overcharge their neighbors if your going to overcharge them .They could never get ahead like that .

Larry

 

[mwj]

So when I ask all of you a fair $7.00 a bushel for my ''feed'' corn it is ok. I am not going to ask mkt. price because I would be cheating myself :roll:

Oh no that would be different, what good would it do them to overcharge their neighbors if your going to overcharge them .They could never get ahead like that .

Larry

I just want to be as fair with them as they are with others. :lol2: Maybe they will raise there prices again and we can get another raise. There is no reason that we should be expected to take mkt. price at the elevator for our valuable source of nutrition.

 

[novatech]

So when I ask all of you a fair $7.00 a bushel for my ''feed'' corn it is ok. I am not going to ask mkt. price because I would be cheating myself :roll:

Ask anything you want. Getting it is a completely different story. If it takes $7.00 to make a profit and you know you cannot get that much then you had better rethink planting corn. That's where you cheated yourself.
I really don't think comparing corn prices with what you get for growing better quality, or other marketable distinction, beef is a fair or even rational comparison.

 

[somn]

If it takes $7.00 to make a profit and you know you cannot get that much then you had better rethink planting corn. That's where you cheated yourself.

If you can't make a profit at $1.50 hanging weight then you better rethink raising cattle. Thats where you cheated yourself.

 

[JMichal]

If it takes $7.00 to make a profit and you know you cannot get that much then you had better rethink planting corn. That's where you cheated yourself.

If you can't make a profit at $1.50 hanging weight then you better rethink raising cattle. Thats where you cheated yourself.

It all depends on what you put into them and for how long. Somn you said you finished yours for 9 months. What are they eating, and how much? I guess at 1.50 you could make a profit if you were just feeding them hay or winter grazing, Is that why it takes so long? Also what breed are your cattle? You also need to figure the cost to maintain your pastures, and many other things. I have a feeling you are not figuring in all your costs.

 

[hayray]

So when I ask all of you a fair $7.00 a bushel for my ''feed'' corn it is ok. I am not going to ask mkt. price because I would be cheating myself :roll:

That is a good question. There is a local farm next to me that farms over 4000 acres of cash grain and also has a good sized on farm feed store. They charge right now close to $6.50/bushel because as they stated to me that they make the feed store business buy the grain from the farm, so inorder to make money on $5 commodity corn right now that the feed store is buying from the farm then they need to charge that much, again, one is a retail business and another is a grain commodity business. Most of us who buy corn buy from a grain elevator at the very least and they always charge me a good bit above market price for a handleing fee. And going to a feed store you are paying alot more for any feed, especially processed feed because you are paying for all the extra costs of bagging, processing, advertising, transportation, etc. I have my freezer beef priced to cover all these extra costs, otherwise if I have extra I can't sell that way they will go to the auction but then I don't pay all those extra costs of doing business as I do with my retail business.

 

[hayray]

I have a standard cut order and then a good percentage of my customers give me customer orders.I just found it to be a lot less confusing and more profitable then dealing with the hanging weight situation. I did that initially but felt uncomfortable selling a low yield grade heifer to some one at the same price as compared to a steer, this way they pay for what they get.

I guess when charging $4.50 a lb you really won't get hurt to bad on a grind it all for hamburger cutting order. I could see if you had one set cutting order and that is what everyone gets regardless you would have less problems with customers. But by allowing some to set there own cutting order don't you think you are opening the door for problems? Or do you sell strictly by the halves and wholes? With no split quarters.

How did you end up getting lower yielding heifers? Were they first year hiefers that didn't get bred so they went to slaughter?

They are 12 month old heifers so I guess you could say they are first year heifers. The cutability on my choice heifers seems to be around 26% and on my steers around 35%.

 

[somn]

It all depends on what you put into them and for how long. Somn you said you finished yours for 9 months. What are they eating, and how much? I guess at 1.50 you could make a profit if you were just feeding them hay or winter grazing, Is that why it takes so long? Also what breed are your cattle? You also need to figure the cost to maintain your pastures, and many other things. I have a feeling you are not figuring in all your costs.

Breeds are angus, lims, sims, chars, and holstiens. My pasture consists of cement and dirt mounds not much cost to maintain that. The ration changes throughout their life mainly consisting of corn, ddgs, wdg, corn silage, ground grass hay, and protien pellets. Just how short of time do you think it should take to finish cattle. I'm sure you have a extensive history in running a feedlot maybe you could do as Chris B suggested and go around offering your wisdom to the big feedyards let them know they are doing it all wrong. You may have a feeling I'm not figuring all my costs and I know for certain that I am if I wasn't I would already be out of business. If you can't make a profit right now selling your beef at $1.50 per hanging pound you need to rethink raising cattle.

 

[somn]

They are 12 month old heifers so I guess you could say they are first year heifers. The cutability on my choice heifers seems to be around 26% and on my steers around 35%.

That is interesting I wonder if that is from their younger age at slaughter. Heifers will yeild as well or even slightly better than steers for hanging %.

 

[Red Bull Breeder]

Somn how's the Limis do for you?

 

[somn]

Somn how's the Limis do for you?

Depends what weight they came in at. Had some really nice ones also had some really poor ones. Key to sucess is remembering ranchers names. Those black things are most common around here.