Fed Up - Going Direct - Freezer Beef

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twabscs

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Hi all,

I've been at this three years now and continue to learn and grow my herd. However, yesterday I sold three calves (Angus) that I didn't catch with a larger load from about six weeks ago. Three steers, one BLACK 900 lbs sold for .40, yep, he lost most of his ears to frost bite, guess the meats bad :-(. Another BLACK 700 lbs, sold for .85, and the one that really burns me was the 600 lb RED angus sold for just .60, because he's red. I know the markets are bad right now, but what a very nice, weaned, two rounds of shots, calf that sold for .60/lb.

Anyway, I've decided to get serious about marketing my beef product for 2009. I would like to look into direct marketing freezer beef and/or maybe maintaing ownership and sending them to a feedlot. My calves are from good registered Black and Red Angus bulls, mostly on R/BA cows.

Some questions:

1) I've read through the archives here and found some good info, but I've looked all over for anything specific to Missouri and its laws on directly marketed beef. Anyone in MO doing this? I've read somewhere that sales tax isn't required when selling halves and fulls, but I can't verify it. I understand the general idea of selling on the hoof by lb and then deliverying to a good processor, etc. Seems the Extension sites would have lots of info on this but I can't find any.

2) Any good feedyards in NW MO area that would take 20-25 steers at a time? Is that a viable option.

I'm really leaning toward the freezer beef approach as I live in the Kansas City area.

Any other thoughts would be welcome.

Thanks,

Tom
 

ddg1263

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one BLACK 900 lbs sold for .40,

That is sad. I really hope I never am faced with something like this. 360 dollars for a 900 lbs black steer. Unreal. I might just feed out my steers too. There is just to much work in raising a steer to 900 lbs just to sell him for 360 dollars.
 

SRBeef

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Sorry to hear of the low prices you received but that is the result of a "free" market system.

What the "free" market that you went to is telling you right now is that the "free" market doesn't have much demand for your steers, however good they are, right now.

Don't take it personally, that is just the market right now. A couple days after Christmas, a couple days ahead of New Year's that low level of interest may also be somewhat understandable.

If you were selling those same 900 lb steers in April when the grass is greening up I bet there would be a lot more interest. 900 lb steers are light to butcher so they need to go to someone who is going to feed them out a bit more.

Freezer beef may sound like the answer but that is also not an easy, automatic way to make more money for your animals. It can also be a lot of work which you may or may not enjoy.

I think that you maybe could have said "no thanks" to those prices, unless circumstances required you to sell them now.

Don't mean to sound unsympathetic but no one said this is going to be easy. Freezer beef is not easy either.

Good luck to you in whatever way you go. Thanks for the thought-provoking post.
 

dun

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You might check wit hthe MO Dept. of AG. As to the feedlots, with the law that was passed last year about getting a tax break for finishing cattle in MO I would think there will be any number of them popping up.
 

Angus Cowman

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yes there are a few feedlots along the kansas Mo line around rich hill and eldorado springs are and maybe a lil further north

a little advice Never sell cattle 2 weeks before christmas and then wait at least a week after new yrs
december cattle never do well especially between christmas and new yrs that is why most sale barns close the week of christmas and don't open until after New yrs
and if you are selling beef buy the half or the whole you don't have to charge tax but if you package it and sell a finished product you have to collect taxes

No matter how ya sell it you are supposed to send in the beef checkoff $
 

cypressfarms

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This past year I started selling calves on the hoof to people. I sell 1/2 calf for $600, and a whole calf for $1000. I keep them, feed them out, and guarantee a whole calf yields them 500 pounds of beef, 1/2 yields them 250 pounds od beef. If you work it out that's $2.00/pound for a whole calf. This includes everything from steaks to ground meat to the ears if they want it ;-) . I had to find a local supermarket that butchered cattle - he charges me .20 cents per pound (plus $50) to butcher, cut and wrap the meat. End result is that the customer gets a freezer full of beef for cheap money compared to grocery store prices.

Only bad thing is that I haven't gotten big time with it yet, only a few each year. I take several steers and grow them on pasture, and the last several months on grain. Keep them for about 12 months. If the carcass doesn't yield 500 pounds, then I cut the price by $2/pound each pound below 500. I require a $500 deposit in August and in February when we butcher, I collect the rest. Usually cost me about $200 in feed per calf to feed out. After I deduct all expenses, I still make $700 a calf, much better than making $400 to $500 at the stockyard.

Ofcourse, the guy that owns the supermarket is a friend. He probably wouldn't want me running 40 or 50 calves through there...
 

grannysoo

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Don't know about your area, but it works good for me in GA. We make money doing freezer beef and the price is consistant.
 

Nesikep

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we do a little bit of freezer beef marketing... the big problem we find with it is that no one has a freezer that can handle a half... they always say "if I had a freezer"

we're nearly tempted to go to costco and buy freezers (a 4 cu ft will do for a 1/4) and then sell it beef, freezer and everything
 
OP
T

twabscs

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Thanks all for the comments so far. As I said, I'm still learning, and it isn't really the money, but the principal. I'm very thankful that I sold 40 steers back in October before the market really dropped so the prices on these three steers are mostly a lesson learned. I kept my heifers as well, but I was thinking about sending 10 or so in with the steers. Good thing I didn't.

Anyway, I'm located in a metro area and am constantly being asked about selling 1/2 a beef so I guess it's time to learn some more about direct beef marketing. I know it isn't easy and it shouldn't be as it will allow for a consistent profit for the operation over time. If someone has a direct link describing the "no tax" on direct halfs in MO, it would be appreciated.

Tom
 

HerefordSire

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Nesikep":gpaszs5w said:
we do a little bit of freezer beef marketing... the big problem we find with it is that no one has a freezer that can handle a half... they always say "if I had a freezer"

we're nearly tempted to go to costco and buy freezers (a 4 cu ft will do for a 1/4) and then sell it beef, freezer and everything

That is a great idea. However, what about buying direct from a manufacuturer on a floor plan or have them dropped shipped to your place or the consumer. Blow out the freezer and mark-up the beef to $4.00 per pound. If the freezer was smaller in size, you could advertise...."no additional charge for the freezer" but keep the beef price the same.
 

KMacGinley

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cypressfarms":nueg7ccl said:
This past year I started selling calves on the hoof to people. I sell 1/2 calf for $600, and a whole calf for $1000. I keep them, feed them out, and guarantee a whole calf yields them 500 pounds of beef, 1/2 yields them 250 pounds od beef. If you work it out that's $2.00/pound for a whole calf. This includes everything from steaks to ground meat to the ears if they want it ;-) . I had to find a local supermarket that butchered cattle - he charges me .20 cents per pound (plus $50) to butcher, cut and wrap the meat. End result is that the customer gets a freezer full of beef for cheap money compared to grocery store prices.

Only bad thing is that I haven't gotten big time with it yet, only a few each year. I take several steers and grow them on pasture, and the last several months on grain. Keep them for about 12 months. If the carcass doesn't yield 500 pounds, then I cut the price by $2/pound each pound below 500. I require a $500 deposit in August and in February when we butcher, I collect the rest. Usually cost me about $200 in feed per calf to feed out. After I deduct all expenses, I still make $700 a calf, much better than making $400 to $500 at the stockyard.

Ofcourse, the guy that owns the supermarket is a friend. He probably wouldn't want me running 40 or 50 calves through there...


Who pays the processing cypress? I charge $1.75/lb hanging wt. and they pay the processing.
 

buckmaster33

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cypressfarms":54uecwfi said:
This past year I started selling calves on the hoof to people. I sell 1/2 calf for $600, and a whole calf for $1000. I keep them, feed them out, and guarantee a whole calf yields them 500 pounds of beef, 1/2 yields them 250 pounds od beef. If you work it out that's $2.00/pound for a whole calf. This includes everything from steaks to ground meat to the ears if they want it ;-) . I had to find a local supermarket that butchered cattle - he charges me .20 cents per pound (plus $50) to butcher, cut and wrap the meat. End result is that the customer gets a freezer full of beef for cheap money compared to grocery store prices.

Only bad thing is that I haven't gotten big time with it yet, only a few each year. I take several steers and grow them on pasture, and the last several months on grain. Keep them for about 12 months. If the carcass doesn't yield 500 pounds, then I cut the price by $2/pound each pound below 500. I require a $500 deposit in August and in February when we butcher, I collect the rest. Usually cost me about $200 in feed per calf to feed out. After I deduct all expenses, I still make $700 a calf, much better than making $400 to $500 at the stockyard.

Ofcourse, the guy that owns the supermarket is a friend. He probably wouldn't want me running 40 or 50 calves through there...

Yeah, you're getting a good deal on that processing...average around here is .38/lb.
 

angie1

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I think direct sale is the very best way to go. Everybody who said you took part of the hit due to time of year is correct, and the steers you mention will have additional finish needs before butcher and for sure you could have gotten more selling in say March.

You could for sure consider "grass fed" or "natural". I have never sold grass fed because I wouldn't sell something that I wouldn't want to eat, but plenty of people are really looking for that. I do advertise "natural" (not to be confused with organic), and that is natural by my definition. This does not bring more money per customer, but it brings more customers. Grass fed I believe brings in a mark up ~ but it takes them longer to finish. You could do half and half ~ finish some grass, finish some on feed.

Some people suggest you don't sell less than half, but I will sell it however they want it (quarter is half of a half ~ not a true "quarter", explain this to people, most don't get that). The locker custom cuts, the customer calls them and they walk the customer through the process. If the customer wants a locker different from the one you use thats fine ~ but there is an extra charge (accomodate!!).Charge extra to deliver the meat to their house. Some people sell meat from their house, but I believe that there are restrictions placed on this.

You will build a customer base, and you want to take care of those people. Guarantee the meat ~ the customers satisfaction. Get the money before they get the beef!!!! Good luck!
 

KMacGinley

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cypressfarms":4yqbv84w said:
KMacGinley":4yqbv84w said:
Who pays the processing cypress? I charge $1.75/lb hanging wt. and they pay the processing.


I pay it.
\

How are you Making $700? It doesn't sound like too good of a deal to me. And what weight do you feed them to, to only get a 500lb carcass?
 

Angus Cowman

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twabscs":16d7hy5n said:
Thanks all for the comments so far. As I said, I'm still learning, and it isn't really the money, but the principal. I'm very thankful that I sold 40 steers back in October before the market really dropped so the prices on these three steers are mostly a lesson learned. I kept my heifers as well, but I was thinking about sending 10 or so in with the steers. Good thing I didn't.

Anyway, I'm located in a metro area and am constantly being asked about selling 1/2 a beef so I guess it's time to learn some more about direct beef marketing. I know it isn't easy and it shouldn't be as it will allow for a consistent profit for the operation over time. If someone has a direct link describing the "no tax" on direct halfs in MO, it would be appreciated.

Tom
if you are selling beef off of your farm you don't have to collect sales tax you do have to claim it as income where this gets sticky is if you pay for the processing and sell a finished product then you have to
ex I sell a 1200lb beef for $1.20pr lb live weight I sell 1/2 to 1 person and 1/2 to another I haul it to the processor and they pay me, then when they pick up the beef they pay the proccessing this is the same as me selling you a cow or taking them to the sale barn because I am selling a live beef not a packaged one the tax come into play when you sell a finished product

Talk to a good farm accountant they can give you this same info
 
OP
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twabscs

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Thanks cowman, that's the detail I needed. It makes sense the way you describe it so I'll need to focus on selling "on the hoof" and let the customer pay for the processing. I'm only selling halfs or fulls so I'll just have one or two checks as income for my finished steer. Since I'm not selling at the sale barn I'll save the insurance, inspection, commision, yardage, and trucking fees as well.
 

Stocker Steve

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Angus Cowman":2nupsw04 said:
a little advice Never sell cattle 2 weeks before christmas and then wait at least a week after new yrs
december cattle never do well especially between christmas and new yrs that is why most sale barns close the week of christmas and don't open until after New yrs

Good advice in general. Who want to ship, work, and start calves on a holiday?

Kill cows can be an exception. The local plants are often looking for hamburger and there is a smaller cattle run. Our kill market jumped 7 cents before Christmas.
 

cypressfarms

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KMacGinley":38iy1qke said:
cypressfarms":38iy1qke said:
KMacGinley":38iy1qke said:
Who pays the processing cypress? I charge $1.75/lb hanging wt. and they pay the processing.


I pay it.
\

How are you Making $700? It doesn't sound like too good of a deal to me. And what weight do you feed them to, to only get a 500lb carcass?

Sorry K Mac, my post was confusing.

On a normal calf that I bring to the stockyard I make gross $400 to $600. Take out $350 cost of moma and you have a $50 to $250 profit per cow.

If I sell the calf as a yearling to butcher, I get $1000 to $1200 (dependant upon whether someone buys a half calf or full calf). Deduct the same $350 for moma, $200 in feed, and $150 to butcher. Profit is $300 to $500 per calf.

I don't have a certain weight that I feed them to, I pasture raise them until the last couple of months and grain/feed them. Normally butcher around 12 months old, or whenever I think they are slightly above 1000 pounds.
 

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