Had a nice thing happen the other day...

[chippie]

options,
Where are you located? There have been other threads where people argue cost and do not consider the variations across the county.

 

[options]

dakota city

 

[SRBeef]

dakota city

Now things are a bit clearer. I bet there are a number of people in your area who think 85 cents is a VERY fair price for good beef cattle.

Have a good Thanksgiving Holiday Mr Options.

Jim

 

[options]

$85 is the current value of live fed slaughter cattle. I treat selling slaughter cattle to local people as arm's length transactions. That is the honest way.

 

[Red Bull Breeder]

Options if i have something to sell and put a price on it, some one buys it for that price that is a honest transaction. If they are happy with what they bought who are you to tell me i priced it to high. You did not buy it, it cost you nothing. Whats your problem??

 

[options]

red bull I believe in selling slaughter cattle as arms length transactions do you show your customers the national dressed beef daily price when you are negotiating price are they even aware of what any of the individual costs are. I have never had a single customer who knew the actual value of dressed beef for the day we negotiated price. I have made the honest choice to provide them that figure. I want my customers to be informed. If people feel it is necessary to price their animals 65% more than the actual value fine by me. Why do they feel the need to overcharge the customer I will never understand greed would be my guess. I perfer fairness and honesty, selling at or near market value.

 

[plumber_greg]

I think everyone is missing an important aspect of business on this thread. What someone else charges, whether a competitor or the Chicago Board of Trade, should have no bearing on what your business charges. If, for example, if S&R couldn't sell his beef because his cost of business is pricing him out of the market, then he needs to look at his costs and lower them. Many times thuough the years, I have gotten calls from someone wanting to start a business like mine andasking me what I charge per hour or job. My response is always that it doesn't matter what I charge, what is the cost of your business. That determines what they need to charge. Many of them have no ides what it cost them to go to work that day. If you sell a product and don't know what it costs to produce that product, but only sell it according to what the guy down the street is selling it for, you are heading out of business. I have offered extras that don't cost me much that my competitors can't offer to secure some contracts, much like S&R is doing. I may still be higher, but get the jobs because of the services I can provide. Don't look at anyone else's prices and just your cost of business, and you will still be selling beef long after others have quit. gs

 

[options]

I agree greg if a person needs to inflate his or her price by 65% above market value in order to make ends meet something is wrong.

 

[forageconverter]

if a person needs to inflate his or her price by 65% above market value in order to make ends meet something is wrong.

Something is wrong. Something has been very wrong for a long time now.

And what's wrong is the market value is too low to be a fair price to the producer.

Market value should support all operation costs and pay the producer/operator a descent enough salary to raise a family.

Market value is 'allowed' to be so low because off farm income subsidizes operations costs and living costs. Therefore, market value's only real determining factor is whatever the buyer feels like paying.

As has been stated on these boards before, many people are willing to produce beef for free or even pay to do it. As such, 'market value' in no way, shape, or form aspires to reflect a fair price for the producer who is actually trying to pay production costs with proceeds from the product.

 

[options]

forageconverter the problem is not the market. I have no problem making a very good living with the current markets. Can a person make a living feeding 10 head its doubtfull. That is not the markets fault that is a product of scale. Very few things are profitable on a small scale. The money is in volume. Blaming the market for a persons inabbilty to understand how to be profitable is nonsense.

 

[Sean M]

forageconverter the problem is not the market. I have no problem making a very good living with the current markets. Can a person make a living feedinf 10 head its doubtfull. That is not the markets fault that is a product of scale. Very few things are profitable on a small scale. The money is in volume. Blaming the market for a persons inabbilty to understand how to be profitable is nonsense.

I agree that you'd need a larger volume than ten to make a reasonable profit, but there is also value in quality. SRBeef gets his beef graded so he knows it's good quality.
You're also making a lot of mathematical errors. He is getting a 65% increase on his margin. He isn't charging 65% over the average retail price. The ave retail price is close to what he is charging and that is the ave price that includes old cows and bulls. His increase in margin is basically the margins that will be going to the retailer and/or wholesaler. He's doing their job by selling direct retail so he gets that cut.

At the end if his customers say they are happy with the price and product he's selling at the right price. The ultimate test will be if he can keep a high level of repeat customers, they won't buy from him again if they think it's a ripoff.

 

[options]

Sean srbeef is charging $1.30 live for the animal alone that is a 65% increase above market value. In addition to that he is also charging for the slaughter and proccessing. Do his customers know the actual price of dressed beef for the day that they pay? My guess is no they do not. Why does a person feel it is neccassary to charge 65% more than a product is worth that is my question.

 

[options]

I agree that you'd need a larger volume than ten to make a reasonable profit, but there is also value in quality. SRBeef gets his beef graded so he knows it's good quality.

Who is grading his beef?

 

[Cowdirt]

A deal consists of: 1) an offer 2) an acceptance 3) consideration changes hands. If either party is unhappy they will not do business with the other again. It's that simple; what's with all this chatter?

 

[options]

A deal consists of: 1) an offer 2) an acceptance 3) consideration changes hands. If either party is unhappy they will not do business with the other again. It's that simple; what's with all this chatter?

What the customer doesn't know won't hurt them right? I perfer arms length transactions I make sure my customers understand how the price is calculated using market values. Honesty is an uncommon trait here at CT.

 

[options]

Congratulations!

Our butcher doing our cut and wrap advised us that the beef graded "prime" this year! Yeah :cowboy:

Custom butcher advised you of this?

 

[Cowdirt]

A deal consists of: 1) an offer 2) an acceptance 3) consideration changes hands. If either party is unhappy they will not do business with the other again. It's that simple; what's with all this chatter?

What the customer doesn't know won't hurt them right? I perfer arms length transactions I make sure my customers understand how the price is calculated using market values. Honesty is an uncommon trait here at CT.

I don't feel that way about most posters on CT. My experience has been that those who speak most about honesty do not necessarily have a greater amount.

 

[SRBeef]

My wife and I went to the local supermarket yesterday to find a few more things for Thanksgiving dinner. While she was going around I took a look at the meat counter.

My selling price of 3.90/lb for all cuts which includes, ribeyes, porterhouses, T-bones, lots of boneless and bone-in roasts and lots of very lean hamburger. All "source-verified." Their leaner hamburger alone was close to $3.90.

This supermarket also had two different grades of beef in the case, their regular beef and another grade which I believe was called "Stockman's Angus" and from a packer by the name DakotaBeef or something like that.

I was glad to see this Stockman's grade there since this looked visibly much better than the regular, cheaper beef from who knows where and provided folks an alternative.

My $3.90 looked VERY attractive compared to either grade but especially the higher grade of beef.

I'm sure this will make no difference to Mr Options from Dakota City who likes 85 cent fats, and who is sure I am ripping people off at $3.90 retail.

However, in my opinion, this whole thing makes sense. And as CD says, the customer will be the ultimate judge.

I hope everyone has had a nice Thanksgiving day. Jim

 

[options]

Jim it is one thing when the retailers charge x amount of dollars for beef to pay expenses getting it to the shelf.You on the otherhand do not have these expenses. You have even suggested you charge extra ontop of already over charging for the live animal to deliver the boxed beef. People think packers are crooked with the prices they charge for retail beef yet some people here don't mind charging the same even without needing to pay all the expenses the packers and retailers do.

 

[ArmyDoc]

Jim it is one thing when the retailers charge x amount of dollars for beef to pay expenses getting it to the shelf.You on the otherhand do not have these expenses. You have even suggested you charge extra ontop of already over charging for the live animal to deliver the boxed beef. People think packers are crooked with the prices they charge for retail beef yet some people here don't mind charging the same even without needing to pay all the expenses the packers and retailers do.

Sell a car that is the same or better for a price that is cheaper than the competition, and people are going to buy it. I'd say it's pretty much the same for beef or any other comodity. People don't care what your production costs are. They care what price they can get it at down the street. What determines price is the market - i.e. what does it cost on the market.

If your production costs are more than market price, they aren't going to offer you more. If you production costs are lower than average, you still sell at market, but you make more money.

If you are selling processed beef, you compare your prices to other people selling processed beef. If you cut out the middle man, by doing the middleman's work, why shouldn't you get the middle mans cut? So long as your product is sold at a fair price - ie the same or less than what that product would cost elsewhere, you're not doing anything wrong.

You mentioned economies of scale - that's one way to turn a profit. Another is to own the entire supply chain from birth to the table. SRBeef's chose the latter - nothing wrong with that.