Had a nice thing happen the other day...

[novatech]

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.

A fair price is anything the consumer is willing to pay for the product. Why is it so important to limit your profit, your income? If you produce a better product and market it better, then the higher price is justified. If you can cut your costs on production it is fair to make the extra profit.
It is just as much the competion that sets the price as the market. More so it is the effort, or the lack of, in marketing that determines what you take to the bank, or do not take to the bank.

 

[ANAZAZI]

A fair price is anything the consumer is willing to pay for the product. Why is it so important to limit your profit, your income? If you produce a better product and market it better, then the higher price is justified. If you can cut your costs on production it is fair to make the extra profit.
It is just as much the competion that sets the price as the market. More so it is the effort, or the lack of, in marketing that determines what you take to the bank, or do not take to the bank.

Hear Hear!

 

[plumber_greg]

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.

You say that the market determines the price, and people don't care about your production costs, that they care what price they can get it down the street. What in the world do you think the market price is based on? It is based on production costs and competition no matter what you're selling. If your production costs are less that the competition, you don't sell at market , you sell at less than current market to make more money selling more product. Otherwise inflation is out of control, and it takes a wheelbarrow of money to buy a cup of coffee. Your production costs, plus a profit you need, plus the ability to sell your product, with no regard to someone's else's costs or market, is how you're able to stay in business. What good is selling below production costs, no profit, but still at market price, doing for your business? gs

 

[options]

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 cut out the middle man alright you never incurred any of the expenses the middle man pays, you never had to pay transportation of the raw product 300 miles to the slaughtering plants, you never had to pay the health insurance on the workers and their families. You never paid the federal government to grade your product. You never had to pay for the transportation of the finished product to the shelf on average 921 miles away. You never paid for shelf space at the retail store.

But yet you feel the need to have the customer pay you the same as the packer sells for because you can. It seems that those dishonest overcharging packers are a bit more honest than some that complain about them. Atleast the packer can show expenses to the customer of why they charge the prices they do. You load your live animal drive a couple miles to the butcher shop, 14 days later they call you tell you meat is done then you drive a couple miles and deliver it. Your only out of pocket expenses are paying the slaughter and process bill, then hauling a couple 60 pound boxes to the customer a couple miles. Why do you feel the need to overcharge for the animal other than greed?

 

[iowa hawkeyes]

my mistake I was using regional pricing when figuring slaughter and processing costs here you will never get a slaughter steer slaughtered and processed in a usda facility for $400 it will cost around $700

Depends how you process it. My USDA processor charges around $400 for a whole beef, but it is regular packaging, not vacuum packed, that costs way more.(he doesn't do it)

 

[gberry]

Options, I've reread these posts and tried to give you the benefit of the doubt, but much like everyone else on here, I find you to be way off base. You're comparing 2 different products, live slaughter cattle sold into the commodities market and source verified hormone and drug free retail beef. If you feel it's wrong to price a product competitively with the chain stores because you have lower expenses, then by all means continue to sell your fat cattle for $.85.

If it was easier to sell cattle the way SRBeef does, wouldn't everyone do it and the subsequent competition drive the price down? If it is so simple, in fact, you should never have to sell to the packers but rather pass these enormous savings right to your neighbors. I mean if SRBeef is selling at 65% above the market, you should be able to supply your whole community with beef at the bargain price of $2.67 per pound cut, wrapped and delivered.

It's not SRBeefs responsibility to keep the middle men in business, nor is it his duty to sell his beef for less than the stores. Should the slaughter plant pay more for his beef because he couldn't get the same price on grain as the large feedlots?

 

[KW4071]

I just read this post and shake my head. I can't help but think this post shows what is causing a lot of the problems in the country. If SRBeef can find buyers at $10 a pound, why should options or anybody else care. This country was built on free enterprise and the free market. When people won't pay SRBeefs price or somebody else thinks they can make a profit and charge less the market will change. For someone to say one should sell at a lower price than the consumer is willing to pay is ridiculous. It sounds as if SRbeef has created "value" which is what we all need to do to survive.

 

[LimiMan]

Some people will never get it. :dunce:

 

[options]

Some people will never get it. :dunce:

I'll second that. The more posts I read the more I shake my head in disgust. How can cattle men and women be so greedy. Then I remind myself who I am having discussions with.

Hobby boys. They are not concerned with the long term health of the cattle industry they are in in for a quick buck. I suppose this is where I will just agree to disagree. It just sickens me to know how crooked some cattle men and women can be. 19 months ago a fella admits he is new to cattle, now he tells us how to raise top notch quality fed cattle and market fed cattle. I can't imagine how anyone could sleep after charging 65% above the market value for an animal. Even worse when a person considers they are weighed with gut fill. Whatever it isn't my money wasted, so I will leave it at that. I will continue to sell fed cattle as arm's length transactions you all can screw whomever you like. Just a heads up I've seen alot of greedy cattle men and women come and go. Greed and cattle don't seem to go well together.

 

[ArmyDoc]

You say that the market determines the price, and people don't care about your production costs, that they care what price they can get it down the street. What in the world do you think the market price is based on? It is based on production costs and competition no matter what you're selling.

It's based on what people will pay - which is as little as they can. That's where competition comes into it. Production costs only matter to the degree that they limit your ability to sell your product at a profit. If you can't lower your production costs to the point where you are able to make a profit, you go under. But once you can sell your product, any further reduction in production costs is profit.

If your production costs are less that the competition, you don't sell at market , you sell at less than current market to make more money selling more product.

That strategy only works if you can sell more product. If you are limited in what you can produce, that strategy won't work. Also, no one undercuts their competition any more than they have to. One person lowers their price, the other one matches, or goes a bit further. If they first person stands pat, the second person doesn't lower it even further just because they could.

Your production costs, plus a profit you need, plus the ability to sell your product, with no regard to someone's else's costs or market, is how you're able to stay in business.

a profit you need... Who gets to determine the profit I need - you? Are you going to define it on a per cow basis, or an anual income basis? Do you know how much land I have, how many cattle I can run, how many kids I have to feed etc? Options seems to be objecting to SRBeef Selling his processed beef at the same rate as the supermarket, just because he's figured out how to keep his costs down. Mind you, he's not selling at more than the supermarket. Infact, his hamberger is at the same, his premium cuts are less. I just can't see how this is takeing advantage of anyone.

What good is selling below production costs, no profit, but still at market price, doing for your business? gs

My point was that the market is not determined by your production costs, the market is determined by what the customer is willing to pay. You can't expect them to pay you more just because your production costs are higher. The flip side is that you don't have to lower your prices just because your production costs are lower. Sale price is determined by what the customer is willing to pay, and by what your competition is charging, not by what your production costs are

 

[novatech]

Some people will never get it. :dunce:

I'll second that. The more posts I read the more I shake my head in disgust. How can cattle men and women be so greedy. Then I remind myself who I am having discussions with.

Hobby boys. They are not concerned with the long term health of the cattle industry they are in in for a quick buck. I suppose this is where I will just agree to disagree. It just sickens me to know how crooked some cattle men and women can be. 19 months ago a fella admits he is new to cattle, now he tells us how to raise top notch quality fed cattle and market fed cattle. I can't imagine how anyone could sleep after charging 65% above the market value for an animal. Even worse when a person considers they are weighed with gut fill. Whatever it isn't my money wasted, so I will leave it at that. I will continue to sell fed cattle as arm's length transactions you all can screw whomever you like. Just a heads up I've seen alot of greedy cattle men and women come and go. Greed and cattle don't seem to go well together.

So you think that if people are willing to pay 65% over what the market value is it is the cattleman's responsibility to limit their profit. I am willing to bet that if you took your cattle to a sale barn and 2 guys got to fighting over them so you made an extra 65% you would not send them a refund. I have seen it happen more than once and it is usually with other people's money.
The farmer mentality; the willingness to take what people will give.
The business mentality; setting a price and market the product in order to acquire it.
The consumer mentality; if I pay more it must be better.
I know a breeder that has two bull sales a year. He sets the price on the bulls. Any bulls that do not sell go to sale barn. They are sold as slaughter only. No one can buy his genetics unless they are willing to pay his price. Is this greed? No. It is good business. It is honoring the efforts of his family for breeding the best for many generations. I have exactly the same genetics. Can I expect to get the same price? Not by sitting on my haunches and letting the buyer tell me what they will pay. I will only get the price if I market them accordingly.
Drug companies have up to a 3000% mark up on their products. They can because they provide people with what they need to sustain life. Seems as though we, as cattlemen, do the same but have always just taken what people want to hand out.

 

[plumber_greg]

Army D, I think we actually agree, we can't just get it written down so it sounds like it. Market price is based on what people will pay, but production costs have to also tell them what they can pay. Otherwise, everyone is broke. The part about selling more for less is based on the assumption that all business must expand in order not to go backwards. You, yourself, should determine how much profit you need to sell a product. It is no one else's business or concern. I believe that production costs, from the as far down the pipeline as you can go, determines what that market price will be. If the first company in the chain goes broke selling below his costs, the following suppliers can't produce their product to sell. We forget that this thread started because Jim did a good job of marketing his product, and was justifed in being proud of it. There is nothing wrong with selling a product or service at a profit. gs

 

[options]

So you think that if people are willing to pay 65% over what the market value is it is the cattleman's responsibility to limit their profit. I am willing to bet that if you took your cattle to a sale barn and 2 guys got to fighting over them so you made an extra 65% you would not send them a refund. I have seen it happen more than once and it is usually with other people's money.

Both of those fellas at the salebarn know the market value, both are willing to spend more than the market, it is called an auction!

Tell me how this is the same as a sale between a single informed seller who is aware of market value and a uninformed buyer who doesn't?


Three words fellas arm's length transactions.

 

[options]

We forget that this thread started because Jim did a good job of marketing his product, and was justifed in being proud of it. There is nothing wrong with selling a product or service at a profit. gs

There was alot of profit at $85, the rest of the profit was a product of greed. The retailers charge it so he will too. The packers and retailers have alot of expenses he does not. The packers and retailers price their products to cover expenses and make a little profit, he prices his product to cover expenses and make alot of profit. The next time you all want to complain about the packers and their gouging prices, there are several people right here at CT that are alot more crooked than the packer.

 

[plumber_greg]

We forget that this thread started because Jim did a good job of marketing his product, and was justifed in being proud of it. There is nothing wrong with selling a product or service at a profit. gs

There was alot of profit at $85, the rest of the profit was a product of greed. The retailers charge it so he will too. The packers and retailers have alot of expenses he does not. The packers and retailers price their products to cover expenses and make a little profit, he prices his product to cover expenses and make alot of profit. The next time you all want to complain about the packers and their gouging prices, there are several people right here at CT that are alot more crooked than the packer.

But you don't know that he made alot of profit, you don't know the expenses he had. He basically said,"Here is my product, here is the price I need to continue to sell this product. If no one wants to pay this price for my product, then I can no longer produce this product." gs

 

[options]

We forget that this thread started because Jim did a good job of marketing his product, and was justifed in being proud of it. There is nothing wrong with selling a product or service at a profit. gs

There was alot of profit at $85, the rest of the profit was a product of greed. The retailers charge it so he will too. The packers and retailers have alot of expenses he does not. The packers and retailers price their products to cover expenses and make a little profit, he prices his product to cover expenses and make alot of profit. The next time you all want to complain about the packers and their gouging prices, there are several people right here at CT that are alot more crooked than the packer.

But you don't know that he made alot of profit, you don't know the expenses he had. He basically said,"Here is my product, here is the price I need to continue to sell this product. If no one wants to pay this price for my product, then I can no longer produce this product." gs

If he could not profit at $85 he should no longer be in the cattle business, using uninformed consumers as a crutch to keep his business going is a black eye for the rest of the industry.

 

[Frankie]

This is ridiculous. SRBeef is willing to stand behind his product. He deals with the customers one on one. Neither the packer nor "options" does that. Yes, he gets more for his product and good for him for producing a superior product that the consumer is willing to pay more for. I don't care if his cost of production is zero, if he can sell it for more, go for it. And don't apologize to anyone for making money. To suggest he's hurting the beef business by taking advantage of uninformed consumers is mind boggling. There are supermarkets all over the place. All they have to do is go there and buy their beef, as the majority of beef consumers do. If they CHOOSE to buy from SRBeef, that's their decision.

 

[options]

This is ridiculous. SRBeef is willing to stand behind his product. He deals with the customers one on one. Neither the packer nor "options" does that. Yes, he gets more for his product and good for him for producing a superior product that the consumer is willing to pay more for. I don't care if his cost of production is zero, if he can sell it for more, go for it. And don't apologize to anyone for making money. To suggest he's hurting the beef business by taking advantage of uninformed consumers is mind boggling. There are supermarkets all over the place. All they have to do is go there and buy their beef, as the majority of beef consumers do. If they CHOOSE to buy from SRBeef, that's their decision.

Frankie don't shoot your mouth off about how I don't stand behind my product I sell over 300 hd a year to individuals thru a custom butcher shop. I stand behind my product. In addition to that I provide all the beef that the local butcher shop sells across their retail counter approx 400 hd per year. I know what it takes to make a profit, I also know when someone is being greedy. Arm's length transactions. Not greed.

 

[Frankie]

This is ridiculous. SRBeef is willing to stand behind his product. He deals with the customers one on one. Neither the packer nor "options" does that. Yes, he gets more for his product and good for him for producing a superior product that the consumer is willing to pay more for. I don't care if his cost of production is zero, if he can sell it for more, go for it. And don't apologize to anyone for making money. To suggest he's hurting the beef business by taking advantage of uninformed consumers is mind boggling. There are supermarkets all over the place. All they have to do is go there and buy their beef, as the majority of beef consumers do. If they CHOOSE to buy from SRBeef, that's their decision.

Frankie don't shoot your mouth off about how I don't stand behind my product I sell over 300 hd a year to individuals thru a custom butcher shop. I stand behind my product. In addition to that I provide all the beef that the local butcher shop sells across their retail counter approx 400 hd per year. I know what it takes to make a profit, I also know when someone is being greedy. Arm's length transactions. Not greed.

As long as you do "arm's length transactions", you're not dealing directly with the consumer. You've found your niche and good for you, but bashing another producer because he's charging more than you, (and has people turn up in his driveway looking for more) is ridiculous.

 

[options]

This is ridiculous. SRBeef is willing to stand behind his product. He deals with the customers one on one. Neither the packer nor "options" does that. Yes, he gets more for his product and good for him for producing a superior product that the consumer is willing to pay more for. I don't care if his cost of production is zero, if he can sell it for more, go for it. And don't apologize to anyone for making money. To suggest he's hurting the beef business by taking advantage of uninformed consumers is mind boggling. There are supermarkets all over the place. All they have to do is go there and buy their beef, as the majority of beef consumers do. If they CHOOSE to buy from SRBeef, that's their decision.

Frankie don't shoot your mouth off about how I don't stand behind my product I sell over 300 hd a year to individuals thru a custom butcher shop. I stand behind my product. In addition to that I provide all the beef that the local butcher shop sells across their retail counter approx 400 hd per year. I know what it takes to make a profit, I also know when someone is being greedy. Arm's length transactions. Not greed.

As long as you do "arm's length transactions", you're not dealing directly with the consumer. You've found your niche and good for you, but bashing another producer because he's charging more than you, (and has people turn up in his driveway looking for more) is ridiculous.

I think you better look up the definition of a arm's length transaction.