First goes the butcher, then the small sale barn?

[HDRider]

CB got me to wondering if the local sale barn is going to go the way of the local slaughter house.

I wonder if he he might be correct predicting a consolidation with beef like we saw in dairy, chicken and pork.


According to the United States Department of Agriculture, the number of slaughterhouses nationwide declined to 809 in 2008 from 1,211 in 1992, while the number of small farmers has increased by 108,000 in the past five years.

Why so few slaughterhouses? The "processing, marketing and distribution networks that once made small farming viable... disintegrated in the last 30 years as U.S. agriculture went through a dramatic consolidation," reported the Washington Post in 2010.

"The decline of small-scale USDA-inspected slaughterhouses comes as the demand for pasture-raised niche meats is soaring," noted USA Today in a 2010 article.

In other words, the increased demand for niche meats is being suppressed by a dearth of slaughterhouses.
http://www.ers.usda.gov/media/820188/ldpm216-01.pdf

 

[Craig Miller]

Ours stays fully booked. You have to make an appointment a monyh or so in advance. We have one for september for my hogs and i think already have one for the beef sometime next spring.

 

[Rafter S]

The slaughterhouse I'd used for years just closed a few months ago. It was a family-owned business, and they would have needed to spend a considerable amount of money to upgrade to meet current regulations. The younger generation wasn't interested in it, so they made the decision to close instead of spend the money.

There are probably at least 6 - 8 active sale barns within an hour's drive of my house, and 2 within 15 minutes (both in Grimes county, 2 or 3 miles apart on the same road). The only ones I can think of off the top of my head that have closed in the last number of years are the ones in Hockley and Sealy. I believe increasing urbanization, which of course reduced the number of cattle in the area, was the reason for both of them closing.

 

[K5PWB]

Rafter S

That wasn't K&C in navasota that closed, was it? We have used them for a few years and always have been happy.

 

[Rafter S]

Rafter S

That wasn't K&C in navasota that closed, was it? We have used them for a few years and always have been happy.

No. It was Anderson Processing between Anderson and Roans Prairie. Since they closed I took a calf to K&C in January, and I was also happy with them.

 

[HDRider]

About 35 million cattle are slaughtered in the U.S. annually by 60 major beef-packing operations processing around 26 billion pounds of beef. Four firms control over 80 percent of all the beef slaughtered.

****

Tyson Foods Springdale, Ark.

Daily slaughter capacity 28,700

U.S. market share 25 percent

Beef sales $12.7 billion

Company overview
Tyson bought the world's largest supplier of premium beef and pork products, IBP Inc., in 2001. It's the second-largest pork and chicken packer in the U.S. and sells its products in 90 countries.

****

Cargill Meat Solutions Corp. Wichita, Kan.

Daily slaughter capacity 29,000

U.S. market share 21 percent

Beef sales Cargill Meat Solutions would not release this data. Its parent company, Cargill Inc., reported $88.3 billion in sales in 2009.

Company overview
Cargill Meat Solutions is one of 75 businesses under Cargill Inc., the largest privately-held corporation in the United States. Cargill runs the biggest flour-milling company in the world, is a leading corn syrup and soybean processor, and has cocoa and chocolate operations on four continents. It employs 131,000 people in 66 countries, including Canada, Mexico and China.

****

JBS USA Greeley, Colo.

Daily slaughter capacity 28,600

U.S. market share 18.5 percent

Beef sales $9.2 billion

Company overview
JBS USA bought Swift (the-third largest packer) in 2007, then bought Smithfield (the fifth-largest packer and largest U.S. feedlot owner) in 2008, then bought Pilgrim's Pride, the largest chicken processor, in 2009. The company tried to buy National Beef Packing Co. in 2008, but the U.S. Department of Justice opposed the acquisition. The parent company, Brazil-based JBS S.A., is the largest beef packer in the world, with 54 processing plants on four continents.

****

National Beef Packing Co., LLC Kansas City, Mo.

Daily slaughter capacity 14,000

U.S. market share 10.5 percent

Beef sales $5.4 billion

Company overview
National Beef started as a single plant in Kansas in 1992. Its other main product is leather.

https://www.hcn.org/issues/43.5/cattlem ... tpackers-1

 

[HDRider]

The perceived need for more government regulation, especially at the federal level, and consumer pressure, that is how it starts.....


From: http://beefmagazine.com/blog/sale-barns ... rability-0

One of the areas in which the industry is most vulnerable is the sale barn, which is completely accessible to the public and often employs workers who might not be as well trained and supervised in proper animal handling techniques as we'd like.

Perhaps,the sale barn is a good place to concentrate on in the beef industry. While certainly most employees are there because they love working with cattle, I think too often there are folks who don't have much interest or stock in the beef industry. We need to ensure these individuals are well trained on the best animal handling practices, and the use of low-stress methods.

 

[mwj]

Run a pencil on the cost of a good steer and the processing to put it in the freezer! :shock: That could be shorting some lockers of business. People used to budget for a 1/2 of a beef and maybe a hog to go in the freezer. That supplied the family with good meat for the year. Now they can not even agree on which fast food to eat, let alone buying something that requires cooking. :yuck:

 

[Rafter S]

Run a pencil on the cost of a good steer and the processing to put it in the freezer! :shock: That could be shorting some lockers of business.

I've heard some people say it's cheaper to sell your calves and buy beef, and I wouldn't argue with them, but there is one thing I think they forget about. If I sell that calf instead of having it butchered I have to declare that income, then turn around and take money out of the bank, that I paid income tax on, and buy the beef. If I have a calf butchered it cuts the IRS out of the equation on both ends.

 

[bbirder]

Run a pencil on the cost of a good steer and the processing to put it in the freezer! :shock: That could be shorting some lockers of business.

I've heard some people say it's cheaper to sell your calves and buy beef, and I wouldn't argue with them, but there is one thing I think they forget about. If I sell that calf instead of having it butchered I have to declare that income, then turn around and take money out of the bank, that I paid income tax on, and buy the beef. If I have a calf butchered it cuts the IRS out of the equation on both ends.

Rafter, here is my equation.
Tax be damned! I stopped slaughtering my calves when they were bringing $500. If I slaughtered one, I lost $500, plus a coupla hundred to finish him, and another coupla hundred to have him cut and wrapped. (These are all round numbers, but I think they are conservative). I now am out of pocket $900. Get him in the freezer and the kids come over and after the wife offers they leave with all the meat except maybe a few hocks and a coupla packs of ground meat. Reminds me of the old TV ad "Where's the Beef". I now sell the calf , put the money in my pocket (after taxes) and buy a ribeye when I want one. I think I am way ahead of the game. :banana:

 

[greybeard]

CB got me to wondering if the local sale barn is going to go the way of the local slaughter house.

It's nothing new--been going on for many decades from the smallest town to the biggest feedlots in the world.
Ever wonder why Ft Worth Stockyards is a tourist attraction and the only cattle you see there are the longhorns they parade down the street for the benefit of the city folks? Why did Chicago cease to be "hog butcherer for the world" and the huge Union Stockyards close down in the 70s?
Why did the sale barn in my nearest town close down many years ago and it's pens are now flea market booths selling Chinese and Mexican trinkets?
Because they were no longer needed. Salebarns didn't leave the farmer and cattlemen--the cattlmen and ranchers and farmers left the salebarn.
Not just agriculture either--it's happened in every segment of industry and capitalism and will continue to happen.

Lots has been said about so many families getting out of cattle and other livestock, which makes the salebarns and feedlots close or move off, which is going to add to transport cost to both the producer and the buyers. That means less profit for the producer, because the feedlots and everyone else will give less money at the sale barn. Sale barns don't close for zero reasons--they close because they don't have enough suppliers--not enough people in the area raising livestock anymore. It's been happeneing for decades. And, Americans got lazy and traded selling calves and steers a couple times a year for a steady and good wage paycheck welding heat exchangers in Houston or running cracking processes in one of the refineries and to be honest, in many places, land just got too valuable to be used for cattle production. And it's going to get worse.
The other side of the coin........
We all like the high prices we get since drought decimated the national cattle herd and that misfortune has turned into good fortune for people that already had herds and land, but w hat would things be like today, if the weather had played nice, and every family that used to raise cattle still did? Or, even as many as were 10 years ago?
There would be a lot more cattle available and prices/HW would be a lot less than they are now due to steady demand but increased supply. We wouldn't have to travel far to sell, very few salebarns would close, but the prices wouldn't be what they are today.

You can't blame salebarns for closing when they don't have enough stock to run thru the ring every week to be profitable. That's what happened to ours--it closed when Houston started expanding out this way and land became a hot commodity for suburbanites and farmers opted to sell rather than fight the forests 24/7 for every sq inch of land they had cleared decades before.

 

[1982vett]

Run a pencil on the cost of a good steer and the processing to put it in the freezer! :shock: That could be shorting some lockers of business.

I've heard some people say it's cheaper to sell your calves and buy beef, and I wouldn't argue with them, but there is one thing I think they forget about. If I sell that calf instead of having it butchered I have to declare that income, then turn around and take money out of the bank, that I paid income tax on, and buy the beef. If I have a calf butchered it cuts the IRS out of the equation on both ends.

Rafter, here is my equation.
Tax be damned! I stopped slaughtering my calves when they were bringing $500. If I slaughtered one, I lost $500, plus a coupla hundred to finish him, and another coupla hundred to have him cut and wrapped. (These are all round numbers, but I think they are conservative). I now am out of pocket $900. Get him in the freezer and the kids come over and after the wife offers they leave with all the meat except maybe a few hocks and a coupla packs of ground meat. Reminds me of the old TV ad "Where's the Beef". I now sell the calf , put the money in my pocket (after taxes) and buy a ribeye when I want one. I think I am way ahead of the game. :banana:

Was a sad day when I ate the last round steak and package of hamburger Mom and Dad had in the freezer when they died....I've been asked many times why I don't eat my own calves......I say it's the liver, heart, soup bone, tail bone, rib bones and so forth. Then since Mom and Dad never "finished" one out, the T-Bone, Rib Eyes and such were not matured so I could buy better in the store. But dang, you can't buy hamburger and round steak that tastes like what came off those 850 lb calves they butchered.

 

[bbirder]

I have to agree with you on the quality. Nothing I buy is as good as what I raised. A person just has to decide for themselves what that is worth to them.

 

[mwj]

I agree that quality is very good when you take one to the local locker. The sad thing is it is still to expensive, if you do not like all of the cuts of your beef. Always remember that liver,heart,tongue,boiling beef and soup bones all cost the same as rib-eye steak! :shock:

 

[greybeard]

The dogs and the catfish gotta eat to tho.

 

[Tim/South]

There are not nearly as many buyers at the cattle sales now days. Ten years ago there were a dozen order buyers at our local sale. Now there are 3, with another guy who just buys bulls and cull cows. There is less competition since so many of the cattle companies went under.
I was talking to an older order buyer last year and he predicted cattle auctions would one day be a thing of the past. He believes that one day we will deliver our calves to a facility and they will be graded, weighed and priced at the current market rate.

 

[Ojp6]

There are already a quite a few places that do the grading and pricing thing without any auction but several of them have shut down or started buying cattle out of the sale barn to fill there orders so they can buy stuff in pot loads instead of a few at a time. I think sale barns will have a place as long as there are a lot of backgrounders around but if everybody starts taking all there calves to 750 plus there won't be as good of a reason. I think the people who raise top end cattle that bring a premium over other number 1 type cattle would not like this system. JMO though. Anything can happen. Some of the smaller barns by us stay open by making making money on commission and they do some trading. There is a lot of crop land around me so in order to get enough cattle for the little feedyards around them they trade some through and make enough money to keep running on just 100-300 a week.