I sell freezer beef :clap: .
There is no sense in doing this if you can not make a profit. There is a lot of work if your doing it correctly. Mine are grain fed and raised on pasture. We sell a minimum 1/4 share in a live animal, which gets them the meat from a 1/4 carcass, but actually they provide the customer with meat from a split half which is meat from both front and hind quarters so it is more equitable for the buyers of two quarters on a single side.
We are in GA.
First, I took a look at all of my expenses, including depretiation, taxes on the farm, cost of getting a calf to weaning, my labor, medications, feed, etc. etc. and then came up with the total cost and then decided how much I wanted to make on the deal and charge that. I sell only animals that are born on the farm, this is because I want carcass data and I want it to be a very good experience for the customer. We aim for mid choice or better meat.
Once I have the amount, I assume the animal will be around 1200 lb live wt, so divide it out and come up with a price per pound. You can do the math on the projected cost of slaughter which is based on a hanging wt. of 60% of live wt. Then you can calculate how much meat will result in the end, which is around 30% less than the hanging wt. and then derive an approximate idea of the cost per pount of the beef cuts.
I worked with the meat lab at our University and developed what cuts would result, how many different cuts, what type and how many pounds of each would result from a live animal of around 1200 lb....I use the meat cuts breakdown when I do my store surveys for comparison pricing for a quarter carcass. The meat from an split half of an animal gives about 126 lb of retail product and is going to cost around $3.76 /lb. I make it very clear this amount of meat will vary widely so the costs will vary per pound of product also.
Once you get this cost, you can see if you are in the ball park and competitive. Since beef prices are higher this year that is why our price per pound this year is less than in a store.
Last year we charged $1.39/lb live wt which put the retail product derived from the beast in the middle between Wally World and other local supermarkets. This year we are charging $1.50/lb live w t, and our survey at two supers put us about $1 less than them. Maybe I should charge more, but I am not greedy, just want a good return. There also needs to be a hedge in your formula for increasing grain costs that might occur during the feeding cycle.
There are all kinds of regulations, once you have what you feel is a comfortable plan for you, talk with you state AG people, they will be very helpful so as not to get your self in a bind. Also see the book, A Legal Guide to Direct Farm Marketing, by Neal Hamilton which can be purchased from Acres website.
We sell the live animal. Because I do not have a cattle hauling license, and don't want one either, I deliver the animal to a USDA slaughter plant, at the moment they hit the ground and are weighed the purchaser owns the animal. I send them a bill on the live wt and tell them the haning wt. and what the costs for processing will be at the time they pick up the beef. After aging and wrapping, they pick up the meat and pay for the slaughter services. I DO NOT SELL OR TOUCH the meat, I do not sell beef, I sell animals. I do not store meat and then give it out for sale. That is a whole other venture that I am not into.
I guarantee delivery of a live animal. You must charge tax on the animal, not the procesing, since you are not selling the beast to someone practicing animal husbandry it is taxed, whereas if you sell the beast to a fellow cattlemen for inclusion in his herd, there is no tax. The tax is based on the point of sale, which in my case is the slaughter house location. You must also pay the $1 beef check off (actually the buyer is supposed to do this, but I do it to make it easy and be sure it is done). Not paying the check off could result in you suffering a $5000 fine for each infraction.
Good Luck. :cboy:
Have fun,
Bill
