Details on how to implement a freezer beef program?

[skyline]

I've enjoyed the posts on the topic "how do you make a profit in this market". I didn't want to hijack that thread, but I think a lot of us are interested in selling direct (freezer beef) and some of you are already doing it successfully. I'd sure like to see a good discussion of the ins and outs - the details of exactly how you do it - from weaning to delivering the finished product to the customer. Grannyso was very kind to spell this out in a PM to me last night (Thanks GS!). Are there others that would share the details of their program? Here's the questions that I asked GS:

1. What do you feed and how much do you feed during the finishing process?
2. How long does it take to finish them after weaning?
3. What weight are you trying to obtain?
4. What is the going price for freezer beef in your area?
5. When do you get paid?
6. How do you advertise?
7. Do you sell halfs or do you sell quarters as the smallest size?
8. Do you have your customers work with the processor to order the cuts they want or do you take the cutting orders?
9. Do you deliver to the customer or do you require them to pick it up from the processor?
10. What kind of vaccinations or other special health protocals are you doing during the finishing process, if any?
11. Do you finish just your steers or are you finishing your heifers as well?
12. If you take a 1000 lb steer in for processing, about how many pounds of freezer beef are you getting from that steer?

There may be other questions. I know this will take some effort, but I think a lot of us will benefit from seeing exactly what others are doing.

Thanks.

 

[jkwilson]

1. I feed a 12% finishing ration and free-choice hay. About 2.5% of their body weight.
2. Calve in January and Feb, wean late summer, butcher during the following summer.
3. ~1200lbs, but it would depend on the animal
4. Price varies from year to year. I usually check with the sale barn and price it so the whole will yield me 25% more than the mid-upper end at the sale barn. Not worth my time collecting etc. without a premium.
5. I get paid between the time I drop it at the locker and the time they pick it up based on the weight at the locker when I drop it off.
6. After the first few years, we don't need to advertise. Word of mouth and repeat business accounts for all our sales. At first, we ran newspaper ads and hung signs on a few bulletin boards.
7. We'll sell quarters, but we encourage people to split halves since the meat is better in the hind quarter.
8. Customers take care of cuting orders, since we are selling live animals. Selling meat requires inspections etc. that are more trouble.
9. We drop an animal off at the locker, and they pick up the meat.
10. We don't vaccinate after calfhood since it's a closed lot and they don't encounter any other animals before the locker. We advertise minimal drugs/thereputic drugs only.
11. We do mostly steers, but will finish heifers if we have commitments for the meat. We try to have most of the meat spoken for around February so we don't raise many extras. We usually have one or two extras, and if we don't get them sold we either keep the meat ourselves or sell it at the sale barn.
12. We get about 68% of the live weight as hanging weight. Don't know how much packaged meat that translates to.

 

[Jovid]

I've enjoyed the posts on the topic "how do you make a profit in this market". I didn't want to hijack that thread, but I think a lot of us are interested in selling direct (freezer beef) and some of you are already doing it successfully. I'd sure like to see a good discussion of the ins and outs - the details of exactly how you do it - from weaning to delivering the finished product to the customer. Grannyso was very kind to spell this out in a PM to me last night (Thanks GS!). Are there others that would share the details of their program? Here's the questions that I asked GS:

1. What do you feed and how much do you feed during the finishing process? A modified intake feed that limits them to about 2-3 % of their body weight.
2. How long does it take to finish them after weaning? 7 to 8 months
3. What weight are you trying to obtain? 1,200 lb
4. What is the going price for freezer beef in your area? $2.00 lb hanging weight
5. When do you get paid? Before and/or after they pick up the meat
6. How do you advertise? Word of mouth
7. Do you sell halfs or do you sell quarters as the smallest size? Both
8. Do you have your customers work with the processor to order the cuts they want or do you take the cutting orders? Customer works with processor on cuts
9. Do you deliver to the customer or do you require them to pick it up from the processor? Both
10. What kind of vaccinations or other special health protocals are you doing during the finishing process, if any? none
11. Do you finish just your steers or are you finishing your heifers as well? Both
12. If you take a 1000 lb steer in for processing, about how many pounds of freezer beef are you getting from that steer? Depends

There may be other questions. I know this will take some effort, but I think a lot of us will benefit from seeing exactly what others are doing.

Thanks.

 

[skyline]

Found this on the web. http://cpa.utk.edu/pptpresentations/Why ... eef-az.pdf

 

[backhoeboogie]

I'm real close to J.K. Wilson's methods except no quarters. The processor does not do cut orders for anything under a half anyway. The processing cost and cut orders are up to the client.

I don't finish during the summer here and you can understand that skyline. So the time frame differs. You wouldn't want to finish in the heat either.

While picking up my order, I don't mind picking up other folk"s orders but don't deliver. Many clients live in Fort Worth and the processor is in the opposite direction. If they want to come here and save miles, no problem.

Most clients are repeat clients. Some are every other year or similar.

One client has had heart problems and wants LH now. He wants me to buy one and finish it for him but doesn't have room for the whole thing. I told him to find someone to take the other half and I'd do it.

 

[Jogeephus]

He wants me to buy one and finish it for him but doesn't have room for the whole thing. I told him to find someone to take the other half and I'd do it.

This is what I do too. I tell them the same when I have a loose half. I don't take on the problem but lay it in their lap and they normally turn out to be a wonderful nonparolled sales person.

 

[terra8186]

I put together a Calf Report for 2007 to 2008. You and others may find this interesting.

2008 Calf Report

Previous Payments for Meat
4/4/07 ¼ side
Slaughtering $5
Processing 187lb @.40/lb $74.80
Producer 187 @$1.50/lb $280.50
Yielded 130 pounds

9/25/07 Half of a side
Slaughtering $10
Processing 428lb @.40/lb $171.20
Patties @ $0.20/lb
Producer 428 @$1.50/lb $663.40

Holding Time of Calves
September 20, 2007 Purchased 2 calves for $350/calf. (approx 400 lbs each)
June 19, 2008 Took 2 calves in for processing (approx 1100lbs each)
Held the Calves for nine months and gained 700lbs each

Hay Feed
Grasses Timetable
9-20 to 11-15 Ate pasture down (approximately 16" high)
11-15 to 12-14 Harvested Hay (Harvested 3 trailer loads of hay on 11-6)
12-14 to 4-1 (33 bales of purchased hay and ¼ acre of corn stalks)
4-1 to 4-15 (3 bales of purchased hay (Jeremy))
4-15 to 5-5 (2 truck loads of hay and sorgum from our field)
5-5 to 6-19 (2 bales of Jeremy Hay, Pasteur)
Purchased hay and Straw
Straw 20 @ $2.20 – Auction Nov
Hay 10 @ $3 – Auction Nov
Hay 11 @ $3 – Auction Nov
Hay 12 @ 3.40 – Auction Nov
Straw 10 @ $2.00 -Neighbor April
Hay 5 @ $2.50 – Jeremy - March
Total Hay = 121.20
Total Straw = $64

Grain Feed
Example of a Feed the from Co-Op made
2/19/08 500 lbs of Calf Feed
Corn 4CWT 7.14 Bu @ 5.00/Bu 35.71
Oats . 5CWT 1.56 Bu @ 3.8/Bu 5.94
KA 38% 50lb .5CWT @ $26.2 13.10
Molasses 20 lbs 20lbs @ .16/lb 3.20

Grain Feed Schedule
Start ½ bucket/day
Sept 20 – 100 lbs of pig feed
Sept 20 - 600 lbs of calf feed
Nov 1 – 500 lbs of corn from Jason (had ground into feed)
Nov 23 – 800 lbs of Feed $0.111/lb
Feb 20 – 500 lbs $0.116/lb
Mar 20 – 800 lbs - $0.08/lb – Possible mistake on billing
Apr 15 – 500 lbs (had 200 left) - $0.126/lb
Unlimited Feed
April 26 – 700 lbs (had 400 left) - $0.111/lb
May 20 – 1200 lbs (had 0 left) -

Grain Feed Rates (should be 2% bodyweight/day)
Sept 20 – Feb 21 = 6.5lb/day/calf
Feb 21 – Mar 20 = 8 lb/day/calf
Mar 20 – Apr 15 = 9 lb/day/calf
Apr 15 – Apr 26 = 15 lb/day/calf
Apr 26 – May 20 = 22 lb/day/calf
May 20 – June 19 = 20 lb/day/calf

Total Grain Consumption
Ate 5700 lbs of Feed Corn over 9 months
= 101 bushel for 2 calfs @ 56lb/bushel

Approximate Corn Costs
Paid approximately $0.12/lb of feed. Bought 5,200 lbs of feed.
Total cost of $624

Useful Constants or Conversions
= 56 lbs of corn = 1 bushel of corn
Hanging Weight compared to Live Weight = 60% or 1200lb calve
= 700 lb hanging
Estimate Calves go 1050lbs = 630 hanging @$1.60/lb = 1008 lbs * 2 = $2,000

Input Costs
Calfs $700
Grain $624
Hay $121
Straw $ 64
Total $1,509

Processing
Slaughter House
Processing is $0.38/lb and $40/kill
Going Rate is $1.65/lb
Sold to friends @ 10% of $1.65 = $1.48/lb

Number 11 – Steer 1
Friend 1 – 321 lbs & Friend 2 – 321 lbs
Processing @ $40/kill & $0.38/lb = $142/half
Meat is $475.08
Total per half is = $617

Number 39 – Steer 2
Mine – 300 lbs & Friend 3 -300 lbs
Processing @ $40/kill & $0.38/lb = $134/half
Meat is $444
Total per half is = $578

My Processed Half – (lbs are estimated) (with local Meat prices at the end)
206 lbs of processed meat from 300 lbs hanging weight
Lbs Description Packages Local Meat Market $
70 Hamburger 54 3.99 $280
24 Soup Bone 9 1.69 $ 41
13 T-Bone Steak 8 (2 per package) 6.99 $ 91
14 Sirloin Steak 4 (1 per package) 5.99 $ 84
5 Rib Steaks 4 (1 per package) 10 $ 50
10 Short Ribs 6 2.99 $ 30
15 Round Steaks 5 3.59 $ 54
5 Sirloin Tips 3 3.69 $ 18
4 Cube Steaks 4 3.99 $ 16
5 Rump Roast 2 3.69 $ 18
18 Chuck Roast 7 3.69 $ 66
10 Arm Roast 4 3.69 $ 37
6 Rib Roast 2 3.69 $ 22
3 Liver 3
1 ox-tail 1 1.00 $ 1
3 Rounding Off 0 3.00 $ 9
206 Total $3.97 $817
Italics indicates a price estimate.
Purchased at meat market $817 from me $578

Profit or Loss
Inputs $1,509
Sold $1,838
Profit $329
Or Paid $115+ processing for Meat

 

[terra8186]

1. What do you feed and how much do you feed during the finishing process? 3% body weight of grain/day
2. How long does it take to finish them after weaning? It took me 400 lbs to 1100 lbs in 9 months
3. What weight are you trying to obtain? 1100 lbs
4. What is the going price for freezer beef in your area? $1.65 to $1.85 /lb hanging weight to the producer. Processing $0.40/lb
5. When do you get paid? When I deliver the meat
6. How do you advertise? Word of mouth through friends
7. Do you sell halfs or do you sell quarters as the smallest size? I sell to friends so I do 1/4's or 1/2's
8. Do you have your customers work with the processor to order the cuts they want or do you take the cutting orders? I do this through with friends and I enjoy it. I only did 2 calves last year. This year I have five so I work with the customers and get the paperwork ready for the processor.
9. Do you deliver to the customer or do you require them to pick it up from the processor? I do it
10. What kind of vaccinations or other special health protocals are you doing during the finishing process, if any? None so far
11. Do you finish just your steers or are you finishing your heifers as well? I finish heifers too
12. If you take a 1000 lb steer in for processing, about how many pounds of freezer beef are you getting from that steer? They hang at 600lbs and you get 400lbs of actual meat. See my previous post

 

[skyline]

This is great information. Thanks to everyone that has responded. Terra, I'm very impressed with your records!

 

[skyline]

Trying to figure out who the potential customers for a freezer beef program are. Here are some of my first thoughts on the subject... Right now, I'm thinking the average customer would buy freezer beef for one or more of the following reasons:

1. Has the cash to buy beef in quantity.
2. Is looking to save money by buying in bulk.
3. Likes the idea of supporting a local farm.
4. Wants to purchase "better" beef than they can get at the supermarket.
5. Has a freezer with capacity to hold the beef.
6. May want "grassfed" or "organic" beef for one reason or another.
7. May be concerned about the use of drugs or hormones in the beef at the supermarket.

Trying to figure out where to target my product to the customer and where to advertise to reach that customer.

As I wrote this, I just realized that if we take credit cards, we might open up our customer base to those folks that may not have instant cash to purchase a whole or a half.

From your discussions with your customers, what motivates them to buy your product? Most of the folks that have responded have said that they sell by word of mouth and that you sell all that you produce. That tells me that there may be a pretty good demand for freezer beef out there.

 

[Jogeephus]

Quality is what has built my customer base. But I do have one "greenie" that buys my meat cause I don't pump them full of growth hormones and stuff.

With quality, you have to be consistant cause one bad one will hurt you. I stand behind what I sell and will buy it back if its a dark cutter or they do not like it. Never had that happen but did get a dark cutter once and offered to buy it back but the people still liked the meat. Its amazing how many people can network for you if you got the quality. It takes a little time but it will happen.

I think for quick expansion you have better opportunities selling grass fed beef or possibly organic. This market is relatively new and I think there is a lot of room for expansion with all these people thinking lean and green.

 

[donnaIL]

1. What do you feed and how much do you feed during the finishing process? corn with cattle grower mix, 12%. We start feeding them as soon as they will eat and work them up to 2% of body weight
2. How long does it take to finish them after weaning?occasionally they finish at 15 months, but usually 18 months
3. What weight are you trying to obtain?1200lbs, we usually get close last ones I estimate were 1100
4. What is the going price for freezer beef in your area?$1 lb on the hoof, see some advertised at $2. The local processor sells sides of beef for $2.10 lb and that includes the processing (which is $.40 hanging lbs and $25 kill fee per animal). I look up the market prices on hanging beef and use those figures, our price it usually real close to the processors price.
5. When do you get paid?we work with customers, usually before they pick up beef
6. How do you advertise?word of mouth
7. Do you sell halfs or do you sell quarters as the smallest size?we sell whole, half or quarter..our processor will divide the halves so that each customer that gets a quarter gets meat from the hind quarters and the chuck
8. Do you have your customers work with the processor to order the cuts they want or do you take the cutting orders?I usually give first time buyers the list of cuts, and some suggestions.
9. Do you deliver to the customer or do you require them to pick it up from the processor?done both, but 90% of time the customer wants to pick it up, also they pay the processor directly
10. What kind of vaccinations or other special health protocals are you doing during the finishing process, if any? we worm in fall and spring, give a tetanus when we band and treat illness as needed. Our customers want natural beef with no hormones or antibiotics, our small herd is closed and we raise our own calves to feed out.
11. Do you finish just your steers or are you finishing your heifers as well? We have been retaining hefiers, but am feeding one out this year, ate a heifer a couple years ago and was very good. Next year we will feed out or sell all calves.
12. If you take a 1000 lb steer in for processing, about how many pounds of freezer beef are you getting from that steer? Ours are usually a bit bigger, usually 225 to 250 lbs per side, the hanging weights are usually between 340-400lbs per side

Trying to figure out who the potential customers for a freezer beef program are. Here are some of my first thoughts on the subject... Right now, I'm thinking the average customer would buy freezer beef for one or more of the following reasons:

1. Has the cash to buy beef in quantity.
2. Is looking to save money by buying in bulk.
3. Likes the idea of supporting a local farm.
4. Wants to purchase "better" beef than they can get at the supermarket.
5. Has a freezer with capacity to hold the beef.
6. May want "grassfed" or "organic" beef for one reason or another.
7. May be concerned about the use of drugs or hormones in the beef at the supermarket

We find that 1,2,4,and 7 are the most important...everyone that we have sold beef to had to purchase a freezer the first time and they didn't mind. They also want to eat TBones and Sirloins and don't want to pay grocery prices. We don't advertise and usually when friends hear that we have dropped off a couple to be processed we have more people inquire than we have available. Also we have regular yearly customers--once you have fresh beef it is really hard to go back to supermarket beef.

 

[MO_cows]

This is a great thread, lots to learn and think about. Thanks to everyone who has shared their information. Great suggestion about the credit card. Or a Paypal account might work, too. This is something that has been on my mind for the future, probably everyone has thought about it at some point.

The "grassfed" market seems to be building, apparently the lineolic acids and fats are healthier. This seems like an area where the individual producer could trump Corporate Ag and retain all the profits. We've already got the grass - they don't.

We butchered our first steer of our own this year, a Tarentaise. He was "grassfed" in that he was out on pasture his whole life with a daily offering of grain, a basic 12% sweet feed. Probably never ate more than 3 pounds of it a day. He was 18 mos. old, weighed 1060 live and yielded 625 pounds of meat (59%). The meat is lean, I would call it select grade. The flavor is excellent, tenderness is also good.

 

[jkwilson]

Usually first time customers balk when we tell them how much a side costs, since they never see it lumped together like that all at once. Then they compare the price at the grocery store and ask around and decide they'll try a quarter. A few months later, they are out of beef and the kids complain about the stuff from the store. When I tell them we are months from having anything ready, they are disappointed, but I can usually count on them to buy a half or more when the calves are ready.

One of our regulars says all his friends think he's a master griller because the steaks always taste better at his house. When he told his brother where he got the meat, his brother bought a side for himself and each of his three kids.

Our processor is a big help working with new buyers. They'll explain the cuts on the phone and help people decide what they want and how they want it packaged. Many at first seem to think you can just decide what you want with no concern about what else you choose. He sells quite a bit of meat right in his shop, and many of our customers buy beef from him to tide them over, and he sells a lot of pork, chicken and seafood. Once we send somebody there, they almost always buy more meat from him while buying their beef from us.

 

[terra8186]

DonnaIL, I couldn't have said this better myself.

We find that 1,2,4,and 7 are the most important...everyone that we have sold beef to had to purchase a freezer the first time and they didn't mind. They also want to eat TBones and Sirloins and don't want to pay grocery prices. We don't advertise and usually when friends hear that we have dropped off a couple to be processed we have more people inquire than we have available. Also we have regular yearly customers--once you have fresh beef it is really hard to go back to supermarket beef.

I have also done pigs for the last 2 years. I buy 10 of them and I split the costs 8 ways between my friends and I. The other 2 I do a pig roast. The taste is a lot better on the pigs than you can find in the store. The cost usually ends up at $2/lb and the grocery store average is $3/lb.

 

[Running Arrow Bill]

We are running a natural grass fed beef program. 10 to 14% CP bermuda and alfalfa for extra protein boost as needed. No hormones, steroids, antibiotics, or other foreign matter...

In our location in Texas Panhandle, the "commercial" cattle people rule. Local grocery stores rarely have any "premium" beef...might be different in Amarillo and Lubbock areas. Most of "local type" store customers are middle to low income + fairly large hispanic population. However, are probably a few customers who want our type of beef...but no inquiries to date. Others, go to Wally World or Sam's Club for their bulk purchases (we buy a lot of non-meat stuff from Sam's).

We do supply LH's to the Texas Longhorn Cooperative in Rice, TX. for their (in-progress) marketing program to Central Market and their stores (e.g., HEB). Will be more (hopefully) markets for the Farmer's Markets, Restaurants that the Cooperative is busy soliciting their business. As such, we don't expect this program to really take off until mid to late spring, 2009.

Our local processor is a non-USDA processor and stuff can't be legally sold that's processed by them. They also do a large Deer processing trade.

With all the "meat scares" in the USA (e.g., e-coli), it is very dangerous to sell any meat product as "packaged cuts" unless one has good product liability insurance and/or one's business incorporated to hopefully protect the principals in the business. Always the issue of "chain of custody" between the processor and retail consumer for product safety issues.

 

[forageconverter]

I put together a Calf Report for 2007 to 2008. You and others may find this interesting.

2008 Calf Report

September 20, 2007 Purchased 2 calves for $350/calf. (approx 400 lbs each)


Going Rate is $1.65/lb
Sold to friends @ 10% of $1.65 = $1.48/lb

Number 11 – Steer 1
Friend 1 – 321 lbs & Friend 2 – 321 lbs
Processing @ $40/kill & $0.38/lb = $142/half
Meat is $475.08
Total per half is = $617


Profit or Loss
Inputs $1,509
Sold $1,838
Profit $329
Or Paid $115+ processing for Meat

A lot of good information in your post. But it seems all your profit was made in the purchase of the calves. $329 profit for two calves is $164.50 per calf.

Assuming it cost 1.40 a day to keep a cow, and assuming a cow raises only one calf a year, those 400lb calves cost $511 to raise. Where you were able to buy them for $350 you saved yourself $161, which is about equal to your entire profit.

If one had raised these calves themselves, to make the same profit of $164.50, one would have to charge $80.50 more per half, or $0.25 more per lb hanging weight, which raises the total to price to $1.73 per lb hanging weight for the ten percent discount price.

To make the extra ten percent for the regular customers, one would need to charge close to $1.90 per lb in a $1.65 market. Can this be done? Or would we be right back where we started at the sale barn where it's impossible to sell your calves for much more than the next guy who has no idea what he actually has in them and just takes whatever he gets?

 

[terra8186]

A lot of good information in your post. But it seems all your profit was made in the purchase of the calves. $329 profit for two calves is $164.50 per calf.

Assuming it cost 1.40 a day to keep a cow, and assuming a cow raises only one calf a year, those 400lb calves cost $511 to raise. Where you were able to buy them for $350 you saved yourself $161, which is about equal to your entire profit.

If one had raised these calves themselves, to make the same profit of $164.50, one would have to charge $80.50 more per half, or $0.25 more per lb hanging weight, which raises the total to price to $1.73 per lb hanging weight for the ten percent discount price.

To make the extra ten percent for the regular customers, one would need to charge close to $1.90 per lb in a $1.65 market. Can this be done? Or would we be right back where we started at the sale barn where it's impossible to sell your calves for much more than the next guy who has no idea what he actually has in them and just takes whatever he gets?

The information was a lot better when it is indented in columns. The website pushed it all together and made it hard to read.

I want to start off by saying I have limited knowledge about this subject. I raised these calves hopping that I made some profit. At the end I figured out how I did. You may be right about the fact that I made the profit in the calves but I don't think I did. Calves usually go for $1/lb around here. I bought these thinking they were 350 lbs. They were probably 400 lbs when the guy delivered them. I bought these calves from a guy that his kids and him use them to practices roping. I probably have almost $1/lb getting them to 500-600 lbs that most people sell them.

I don't know the reason why these are weened by 200lbs and others are weened at 500lbs.

 

[Howdyjabo]

We are starting "Freezer Beef" this year--
check out my website--
feel free to comment - so I can improve it.

Hart Farm Freezer Beef
http://hart.stockdogjournal.com/

As an aside I had a lady make my web page- I thought she was real good and not expensive if anyone is looking to get a web page set up.

 

[skyline]

We are starting "Freezer Beef" this year--
check out my website--
feel free to comment - so I can improve it.

http://hart.stockdogjournal.com/

As an aside I had a lady make my web page- I thought she was real good and not expensive if anyone is looking to get a web page set up.

That is a very nice and informative website. Just curious, do you get many customers that have found you on the web? If so, about what percentage of your total customers?