Is there any way to make money in the cattle business?

[Nesikep]

O we dont eat those. I thought u wanted to sell em, not eat em.
We let someone else make em bigger.
Are u the someone else?

I do see your point tho. When we feed one out to butcher, it costs quite a bit as we have to buy feed.
Idk how anyone can afford to make em bigger and then sell em and still make money. Not the way practices and prices are now.

Where does one find feed cheap enough to make em that big at a big scale? Ya got me..

You can't make a profit the way most of us go to market. I want to take out the backgrounder, feedlot, distributor and the retailer with minimal processing cost. I'm thinking if I take their profit margins and make them my profit margins, even at a small scale, I can make a profit.

The butcher will take a good chunk of your profit! Last steer I did cost me $1050, or my price on 1/4 of the beef cut and wrapped.. so I do 2 years of work and the butcher takes 1/4 of it in a few days work..

 

[sstterry]

O we dont eat those. I thought u wanted to sell em, not eat em.
We let someone else make em bigger.
Are u the someone else?

I do see your point tho. When we feed one out to butcher, it costs quite a bit as we have to buy feed.
Idk how anyone can afford to make em bigger and then sell em and still make money. Not the way practices and prices are now.

Where does one find feed cheap enough to make em that big at a big scale? Ya got me..

You can't make a profit the way most of us go to market. I want to take out the backgrounder, feedlot, distributor and the retailer with minimal processing cost. I'm thinking if I take their profit margins and make them my profit margins, even at a small scale, I can make a profit.

The butcher will take a good chunk of your profit! Last steer I did cost me $1050, or my price on 1/4 of the beef cut and wrapped.. so I do 2 years of work and the butcher takes 1/4 of it in a few days work..

Is that Canadian? It seems high. I sent one Sunday. He was 675 hanging weight, so my butcher bill will be just a little shy of $400.

(By the way, I am pretty excited to see how he tastes I have had him on corn since Oct. and he finished out nicely)

 

[Aaron]

You can't make a profit the way most of us go to market. I want to take out the backgrounder, feedlot, distributor and the retailer with minimal processing cost. I'm thinking if I take their profit margins and make them my profit margins, even at a small scale, I can make a profit.

The butcher will take a good chunk of your profit! Last steer I did cost me $1050, or my price on 1/4 of the beef cut and wrapped.. so I do 2 years of work and the butcher takes 1/4 of it in a few days work..

Is that Canadian? It seems high. I sent one Sunday. He was 675 hanging weight, so my butcher bill will be just a little shy of $400.

(By the way, I am pretty excited to see how he tastes I have had him on corn since Oct. and he finished out nicely)

Costs $200 / $140 US to kill here and then another $600-800 / $430-570 US to cut and wrap, depending on carcass size.

I only kill for myself and siblings. And that is only until they balk at the price too much, then I will just say to heck with it. I do just as well at sales barn without all the extra hassle and expense.

Customers are the worst people to deal with. If you can deal with them, than you are 100x better person than I am. I produce cattle, not beef.

 

[kenny thomas]

$60 to kill then .53 a lb hanging weight to process.

 

[HDRider]

O we dont eat those. I thought u wanted to sell em, not eat em.
We let someone else make em bigger.
Are u the someone else?

I do see your point tho. When we feed one out to butcher, it costs quite a bit as we have to buy feed.
Idk how anyone can afford to make em bigger and then sell em and still make money. Not the way practices and prices are now.

Where does one find feed cheap enough to make em that big at a big scale? Ya got me..

You can't make a profit the way most of us go to market. I want to take out the backgrounder, feedlot, distributor and the retailer with minimal processing cost. I'm thinking if I take their profit margins and make them my profit margins, even at a small scale, I can make a profit.

The butcher will take a good chunk of your profit! Last steer I did cost me $1050, or my price on 1/4 of the beef cut and wrapped.. so I do 2 years of work and the butcher takes 1/4 of it in a few days work..

It is not near that bad here.

Vacuum Sealed - $0.50 per pound hanging weight - $35 Kill Fee
USDA -$0.60 per pound hanging weight - $50 Kill Fee

A 1,000 steer would cost about $300+/-

That let's me turn $850 steer into a $2,500 steer

 

[sstterry]

It is not near that bad here.

Vacuum Sealed - $0.50 per pound hanging weight - $35 Kill Fee
USDA -$0.60 per pound hanging weight - $50 Kill Fee

A 1,000 steer would cost about $300+/-

That let's me turn $850 steer into a $2,500 steer

It is essentially the same here. $50 kill fee and .50/lb hanging weight to process.

 

[WFfarm]

$60 to kill then .53 a lb hanging weight to process.

About the same in our area. If you can get a slot now in the next 4-6 months.

 

[Redgully]

I had local abattoir kill and cut up an 800 pound steer a few weeks back which included 50 pounds of sausages. $525 all up which i thought was pretty good. That also includes inspection and health certificate. They are inspected before and after killing. That means if i wish i can sell the meat.

I think a big part of making money in cattle is a fertile healthy breed with good efficiency of production. As soon as an animal needs a special diet to get the best out of it, or vet care, making money becomes a real challenge. Before when i had a mixed herd it was easy, we never fed them, bred year round as our climate allows that. Never vaccinated or wormed or even fed minerals but we had a pretty good fertilser regime and did soil samples so corrected deficiencies. Rarely if ever had calving or health issues. Would just round up calves a few times a year and of to vealer sales. Bred our own replacements and brought in a new bull every few years. We bought bulls young and developed them ourselves.

We eventually got out of them to go to stud cattle to be more involved and enjoy them, just as a hobby and only have a few cows. Pretty much just breaking even and only because i got real lucky and sold a few bulls for decent coin. It was a stupid decision but as long as i remind myself it is a hobby everything is ok.

 

[Dave]

I bought a fat 1,135# heifer a few weeks ago for $635 ($0.56) (same day I sold cull cows cheap). They killed her two days later. Picked up the meat last Friday. I didn't look at the particulars in the bill. I just wrote the check, $633. Only $2 less than what I paid for her. And a big rancher down south in the high desert took an absolute beating on a heifer who didn't breed.

 

[shaz]

So u want to be farm to fork as they say? But without processing them yourself?

I cant imagine the investment required to make such a venture work. All the land for breeding animals. Land for stockers etc. A usda approved processing facility.
What's a guy do with all the leftovers? That's a huge venture.
Doesnt Braums have such a setup? They have a pretty big operation dont they?

I raise calves. I raise sheep. I have a partner that will feed them out. I have sourced a USDA processor 140 miles round trip. I will get a trailer with a freezer. I will sell two different days in two different towns and one day at the farmer's market. I will sell my beef, my lamb, and sourced pork. If it goes well, and I deem the risk reasonable, I will open a meat store.

You're describing exactly what I did 15yrs ago. Can I talk you out of a meat store?

 

[HDRider]

So u want to be farm to fork as they say? But without processing them yourself?

I cant imagine the investment required to make such a venture work. All the land for breeding animals. Land for stockers etc. A usda approved processing facility.
What's a guy do with all the leftovers? That's a huge venture.
Doesnt Braums have such a setup? They have a pretty big operation dont they?

I raise calves. I raise sheep. I have a partner that will feed them out. I have sourced a USDA processor 140 miles round trip. I will get a trailer with a freezer. I will sell two different days in two different towns and one day at the farmer's market. I will sell my beef, my lamb, and sourced pork. If it goes well, and I deem the risk reasonable, I will open a meat store.

You're describing exactly what I did 15yrs ago. Can I talk you out of a meat store?

Shaz, The reason I posted was to hear from those that "been there, done that". I can't promise I will take your advice, but I promise I will listen to it.

 

[shaz]

The problem I ran into with my meat store is we were selling individual cuts. we had 7 chest freezers to separate cuts. We also had 3 freezers on a trailer.

This kind of operation appeals to the steak crowd. Mostly men who liked buying meat for the grill. Within a year or two we had very little steak but 3K lbs of hamburger. This is obviously a cash flow problem and we didn't have enough restaurants to ease the problem. We never had more than one person working the store at any given time.

To mitigate the inventory problem we ended up buying steaks from a wholesaler in Nashville to resell. This is clearly not what our customers wanted.

If you can only sell 1/4, 1/2 and whole beef you can bypass this issue but there's no reason to have a meat store if you do it this way.

 

[1982vett]

Gotta put that hamburger on sale.

 

[shaz]

Gotta put that hamburger on sale.

It was $2.00/lb. What should I discount it to?

 

[HDRider]

The problem I ran into with my meat store is we were selling individual cuts. we had 7 chest freezers to separate cuts. We also had 3 freezers on a trailer.

This kind of operation appeals to the steak crowd. Mostly men who liked buying meat for the grill. Within a year or two we had very little steak but 3K lbs of hamburger. This is obviously a cash flow problem and we didn't have enough restaurants to ease the problem. We never had more than one person working the store at any given time.

To mitigate the inventory problem we ended up buying steaks from a wholesaler in Nashville to resell. This is clearly not what our customers wanted.

If you can only sell 1/4, 1/2 and whole beef you can bypass this issue but there's no reason to have a meat store if you do it this way.

I expect you are correct. I highly doubt I get past the trailer stage. Our processor seems to be a good marketer and warned me of the same thing. His answer to the problem was what he called meat bundles with prices ranging from $75 to $300 containing fast and slow moving items.

I have often been accused of being stubborn. I do know I have to sometimes take a punch on the nose to learn a lesson.

I appreciate your words of wisdom, and experience. Thank you

 

[callmefence]

Raising cattle is a business. It's also a skilled trade if you will. Same with growing stocker calves, and feeding feeders. Same with running a store. Do you have experience in all these things.?
I can't count the people I've seen fail in a few months of opening a business. They expect to hang a shingle and the money starts rolling in.
It very rarely works that way. I was taught not to start anything and expect a profit in the first three years. I found that to be true. Don't expect the business to pay any of your personal bills for some time. And you better be capable of supporting the business for several months.
Experience is very important, the most important. Alot of the money in a small business is hidden. You learn to see where the money is over time. A lot of people won't understand that, but a few will know exactly what I mean.
You see it all the time.... someone opens a cafe because they are a good cook. In 60 days their broke. They may be the best cook in the world, but they knew nothing about running a restaurant, and didn't have the funds cover the bills without immediately becoming profitable.

 

[SmokinM]

Along the lines of what fence is saying the money you make is in equity you build and fringe benefits . Several generations in there is often money made. Any business is a get out what you put in proposition. To be successful you have to be able to see what works. Also as has been said many times some people could make money selling ice to Eskimos some could lose money with a lemonade stand in the desert. I am somewhere in the middle and keep the bills paid but again that is what I put into it. Certainly some things could be done to help cattlemen out but there is also a lot cattlemen can do to help themselves out. IMO educating the public on how food is really produced and working towards a more consistent quality product are towards the top of that list.

 

[Ky hills]

The problem I ran into with my meat store is we were selling individual cuts. we had 7 chest freezers to separate cuts. We also had 3 freezers on a trailer.

This kind of operation appeals to the steak crowd. Mostly men who liked buying meat for the grill. Within a year or two we had very little steak but 3K lbs of hamburger. This is obviously a cash flow problem and we didn't have enough restaurants to ease the problem. We never had more than one person working the store at any given time.

To mitigate the inventory problem we ended up buying steaks from a wholesaler in Nashville to resell. This is clearly not what our customers wanted.

If you can only sell 1/4, 1/2 and whole beef you can bypass this issue but there's no reason to have a meat store if you do it this way.

I expect you are correct. I highly doubt I get past the trailer stage. Our processor seems to be a good marketer and warned me of the same thing. His answer to the problem was what he called meat bundles with prices ranging from $75 to $300 containing fast and slow moving items.

I have often been accused of being stubborn. I do know I have to sometimes take a punch on the nose to learn a lesson.

I appreciate your words of wisdom, and experience. Thank you

I haven't sold any meat by the cut yet don't know if I will ever go that route or not but, when we were in our local farmers market just selling vegetables there were some meat vendors that sold there. They had trailers with freezers in them and probably some at their homes too. They ran into the issues of underselling some cuts too, and I think some of them did the package deals too with a variety of cuts. There is also a possibility of selling meat at some of the local roadside markets if one can workout a working deal with them.
We are seriously considering selling beef by the halves or quarters in the future I've been holding off on trying to sell any till we see if we can get a somewhat predictable product in terms of quality.

 

[Bestoutwest]

Raising cattle is a business. It's also a skilled trade if you will. Same with growing stocker calves, and feeding feeders. Same with running a store. Do you have experience in all these things.?
I can't count the people I've seen fail in a few months of opening a business. They expect to hang a shingle and the money starts rolling in.
It very rarely works that way. I was taught not to start anything and expect a profit in the first three years. I found that to be true. Don't expect the business to pay any of your personal bills for some time. And you better be capable of supporting the business for several months.
Experience is very important, the most important. Alot of the money in a small business is hidden. You learn to see where the money is over time. A lot of people won't understand that, but a few will know exactly what I mean.
You see it all the time.... someone opens a cafe because they are a good cook. In 60 days their broke. They may be the best cook in the world, but they knew nothing about running a restaurant, and didn't have the funds cover the bills without immediately becoming profitable.

The bold part is 100%. The military works this way. Medical works this way. Why do folks expect that they can do everything themselves with a small business? Very few people have the skills to do it all.

For the part I italicized, my wife works for an innovation department of a University. At least 50%+ of all small businesses fail within 5 years, but if I remember correctly the number is a bit higher. Usually the biggest problem is cash flow, but there are other issues as well. I knew of one person that had a product that was ready for stores, but b/c they couldn't pay the rent and no one would lend them money they were stuck with a warehouse full of perishable products that went bad and they went bankrupt. This was a homerun, with buyers and it still failed.

Business is a tricky thing, I applaud anyone that can make it.

We do freezer beef. Because we're small it's the only way to make money. I sell 1/4's, 1/2's and wholes. No picking and choosing. It's more profitable, but more difficult b/c you have find buyers, a slaughterhouse and chase money. But it pays more bills, so I do that way.

 

[Brute 23]

Yes, you have to find people in a bind and get their cattle on the cheap and then sell them to a bright eyed new comer that wants pets or doesnt know there is no money in it.