callmefence
Keyboard cowboy
The meat packers biggest edge is nobody wants to be a meat packer.
The producers biggest problem is everyone wants to be a cowboy...
The producers biggest problem is everyone wants to be a cowboy...
So please tell me, who's getting rich on the cow?
- Thread starter burroughs85
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Ky hills
Well-known member
Same here, there was a tobacco seed company that that ran a bus and picked up older kids to work.
their overhead is far higher due to facilities, cost of shipping and regulations. I'm not saying I'm rooting for the packers but their operational investment is the highest until that meat hits the cold case in the store
simme
Old Dumb Guy
Pretty easy to see the issues and concerns. But what are the solutions to poor cow/calf margins?
Do some people need to get out of cow-calf operations or cut back to reduce the number of calves. Hoping to drive the price up.
Should the government require the 4 major packers to sell a significant portion of their facilities. Cannot sell to one of the other 3. What would this do to calf prices short term and long term? Any effect on meat supply short term or long term? Who would the buyers be? Hedge funds and investment firms?
Is more government involvement needed? Subsidies to cow/calf, tariffs on imports, production limits and quotas? Ban foreign ownership? What about other foreign owned manufacturing - Michelin, BMW, Toyota, Purina, Firestone, etc.
I don't think the answers are easy.
Do some people need to get out of cow-calf operations or cut back to reduce the number of calves. Hoping to drive the price up.
Should the government require the 4 major packers to sell a significant portion of their facilities. Cannot sell to one of the other 3. What would this do to calf prices short term and long term? Any effect on meat supply short term or long term? Who would the buyers be? Hedge funds and investment firms?
Is more government involvement needed? Subsidies to cow/calf, tariffs on imports, production limits and quotas? Ban foreign ownership? What about other foreign owned manufacturing - Michelin, BMW, Toyota, Purina, Firestone, etc.
I don't think the answers are easy.
simme
Old Dumb Guy
Be interesting to see costs per head for the various sectors. Relatively easy to get into the calf/calf side or stockers. Feedlots - more dollars to build or buy and more labor and environmental regulations, I suspect. Packers - any company with big buildings, big parking lots for workers and trucks will generally have higher costs of operations, I think.
Ky hills
Well-known member
No one is denying that they have a lot of overhead expense. Infrastructure construction and maintenance, large number of employees, etc.
They are so large that pretty much 4 companies have handle of nearly all cattle processed. They can spread that cost over a vast amount far more than cow calf or individual feeders can. Plus they are large multi faceted corporations, they are able to spread out losses and expenses over vast Investments.
This is predatory capitalism at the very core. Nothing wrong with the concept of capitalism, but when a few entities are allowed to control and squeeze out would be competition that is a problem.
We now have multinational corporations holding politicians in their pockets and controlling large sectors of our food supply. They have changed the industry and not for the better.
Just had two of my cattle slaughtered, last year the mobile butcher was charging $120 per head and the butcher was .70 a pound cut/wrapped. Which was up from the year before at $100 a head and .58 a pound cut/wrapped. Yesterday the mobile slaughter was $150 a head and the butcher is $1.00 a pound on 900 pounds or less and $1.50 a pound on 901 pounds or more. So even at the bottom level it's costing more for beef on the table. I can understand why the mobile slaughter is up, when you are driving an Fl70 weighing 36k pounds all over the county at current fuel prices you are losing money if your not upping your prices. I guess maybe butcher paper costs more and that's why costs have gone up there too?
farmerjan
Well-known member
It is partly that the butcher paper and vacuum packing supplies are costing more. It is also that the butcher needs the increase in wages just to keep up... inflation was 8.5% as of yesterdays data... bigger is harder to handle and requires more time... so that translates into more wages... if the butcher is employing anyone, he is paying more in wages, more in insurance and all that... a little might be that they are the "only game in town" also, so charge more because they can get it... but most are not that callous... Electricity and all that costs more too... and add in that most are swamped with work so they charge a little more to maybe slow down the work load??? 2017 I paid $45 kill, .48/ to process, cube steak was .35 lb, vacuum pack .10 lb... 2019 I paid $55 kill, .57 /lb to process.. same on the rest. I don't have a ticket for this year in front of me. I think my son said it was .75/ lb to process last Dec... We have always figured that it cost around $1.00 lb for the hanging weight to get it into the freezer... it will be more this year.
Due to the nature of my job, and a cap on any increases in wages, I make the same as I did 5 years ago... 25 yr seniority is the cap for "raises" ... got an increase in the mileage back in January, but that is long used up with the huge increases in gas in the last 3 months... If I was 15 years younger, I would have been looking for a different job or a side part-time job, to make up for the actual "decrease" in what my wages can buy. Since I am working less, and don't have to rely on this to just pay the bills, I can manage on it. A young person cannot take this job and make a living on it anymore.
Due to the nature of my job, and a cap on any increases in wages, I make the same as I did 5 years ago... 25 yr seniority is the cap for "raises" ... got an increase in the mileage back in January, but that is long used up with the huge increases in gas in the last 3 months... If I was 15 years younger, I would have been looking for a different job or a side part-time job, to make up for the actual "decrease" in what my wages can buy. Since I am working less, and don't have to rely on this to just pay the bills, I can manage on it. A young person cannot take this job and make a living on it anymore.
Lee VanRoss
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Your response does not address a cost per unit valuation. While total dollars may be higher the rate of volume and turnover and possible
tax incentives are to the advantage of the packer. The burden of production lies squarely on the shoulders of the individual producer.
BFE
Well-known member
Didn't say drive ten or twenty miles for either. It's still a free country do as you wish. I and many others have to drive farther to Walmart than to a local business. I'm not anti Walmart, but I choose to spread around what little money I have.
Ive not seen a steak at Walmart yet I couldn't pass by. Our local locker has the owners raised beef at the counter and an in county hog farms pork. The quality is great. Maybe we're spoiled here.
I've purchased prime at the fresh market one time to see how it was. Good but not as good as the local raised beef I've eaten.
Once again it's a free country. If you want to shop at the big boys fine. If you don't fine. Just don't complain about them having it all and still giving it all to them.
Dave
Well-known member
Ten and twenty mile round trip for single items? Maybe you should do like we do here. It is a 60 mile round trip for anything. So we wait and consolidate to make multiple stops in a single trip.
And it is over 100 miles round trip to WalMart. Are things that much cheaper at Walmart to make the additional 40+ miles worthwhile? Is there food better than at Albertson's, the closest grocery store? As for meat, the freezer in the garage is by far the closest option.
The neighbors have a self service egg stand right along the road. I have to drive right past it when going anywhere. But our hen house is just a short walk away.
I don't know if you have noticed but it is a big world out there. You location and surrounding accommodations can and are vastly different than those of others.
If the packers by a 1,200# steer @ $1.25 or $1,500 and it only yeilds 60% beef that's $2.08 a pound for the beef. Plus they've got labor, trucking, yardage, processing cost, on and on. Does anyone know what they do with the other 40% of the animal to recoup some of the cost. I'm sure there's something but I have no idea. When I'm at the butcher shop there looks to be very little usable stuff left.
Ky hills
Well-known member
Multiply that by thousands of head over the fiscal year and it spreads those costs out to where they ain't loosing money. The cattle producers and consumers are absorbing the cost so the packers can keep on making money at everybody's expense.
As for the 40% of waste here is an article about that https://www.businessinsider.com/surprising-everyday-products-made-from-cow-parts-2017-10
Hell no. That is socialism and many great men...some in my family..have given their lives to stop to stop the spread. As true Americans, we are supposed to take up arms and root out socialists/communists in our midst. Not hard to find really, they have a "D" by their name if they are in government. Nothing serves to hold prices down like competition in an un-fettered free matket.
Dave
Well-known member
A man I know who was buying for a cow kill plant told me that at that time they were breaking even on the meat but the offal and hide provided a pretty nice profit. That was some years ago but I imagine that hasn't changed too much.
Silver
Well-known member
If there is a beef animal out there that will provide 720 lbs of beef from 1200 lb live weight I think even I could make good money on it.
Travlr
Well-known member
I was getting some impressive numbers with Belgian Blue on Limo cross cows, but you have to use older cows with a good history of no calving problems. BB are meat factories and very high carcass weight ratios... but they have calving issues with younger cows. Realistic management skills are necessary.
I don't doubt the packers are making a killing. The sheer margin they run would make them money. I bought bulls from a man whos FIL was an order buyer. He said he hoped to make $10 a head. $10 doesn't seem like much but he was hitting 3-4 sales a week and turning 7,000 head a year.
Beef goes through allot of hands before it goes through the grocer at $15 a pound. Everyone hates the packers but most can't manage a 50 cow herd much less a huge meat packing facility. Can you imagine the cost just in keeping beef cold from the time it's slaughtered until it gets to your house.
I think the key for producers to make money is stocking rates, quality cattle, and just keeping the calves longer. If you can grow them right @ 825# it takes the profit from 2 other operations, buyers, salebarns, and trucking companies. This goes in your pocket instead of theirs.
The shame of the deal is every beef market except the producer and the feedlot just mark up the product a certain percentage. If they paid us $6 a pound the others would still make the same. Kinda like gas.
Beef goes through allot of hands before it goes through the grocer at $15 a pound. Everyone hates the packers but most can't manage a 50 cow herd much less a huge meat packing facility. Can you imagine the cost just in keeping beef cold from the time it's slaughtered until it gets to your house.
I think the key for producers to make money is stocking rates, quality cattle, and just keeping the calves longer. If you can grow them right @ 825# it takes the profit from 2 other operations, buyers, salebarns, and trucking companies. This goes in your pocket instead of theirs.
The shame of the deal is every beef market except the producer and the feedlot just mark up the product a certain percentage. If they paid us $6 a pound the others would still make the same. Kinda like gas.
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Caustic Burno
Well-known member
I don't know that pencils out here if I get top dollar for 5 wt and 8wt. You're talking couple hundred bucks to put another 300 pounds.I don't doubt the packers are making a killing. The sheer margin they run would make them money. I bought bulls from a man whos FIL was an order buyer. He said he hoped to make $10 a head. $10 doesn't seem like much but he was hitting 3-4 sales a week and turning 7,000 head a year.
Beef goes through allot of hands before it goes through the grocer at $15 a pound. Everyone hates the packers but most can't manage a 50 cow herd much less a huge meat packing facility. Can you imagine the cost just in keeping beef cold from the time it's slaughtered until it gets to your house.
I think the key for producers to make money is stocking rates, quality cattle, and just keeping the calves longer. If you can grow them right @ 825# takes the profit from 2 other operations, buyers, salebarns, and trucking companies.
The shame of the deal is every market except the producer and the feedlot just mark up the product a certain percentage. If the paid us $6 a pound the others would still make the same. Kinda like gas.
I would have to put a sharp pencil to it.
Yesterday's prices.
