What Factors Determine the Value of a Beef Retail Meat
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So, yous're thinking about raising livestock for direct-to-consumer sales. You've figured out what kind of livestock you want to raise, what kind of infrastructure you will need, soil tested your pastures, the works. Ane question remains; how much should you charge your customers?
It doesn't affair if y'all are selling halves, quarters or unmarried cuts, you will commencement demand to know your toll of production. What are your costs of raising that animal from day one until the day of slaughter? In any business endeavor, keeping skilful records is essential to knowing if you are going to exist assisting or not. Once y'all know your price of product, at that place are some tools you can use to help you determine what price you may want to attach to your fine, subcontract fresh product.
Hanging cuts of meat waiting at a slaughter-house for pick-upwards. Courtesy of Brian Moyer.
Mike Debach of the Leona Meat Institute in Troy, Pennsylvania, has a nifty process you tin use that will help you figure out your costs after processing and so you can determine your retail toll. For this example, understand that the cost of production will vary depending on the breed of the beast and production methods (i.e., grain-fed, grass-fed). According to Dr. John Comerford from Penn Land's Department of Dairy and Animal Science, the percentage used to determine the "carcass weight" varies depending on what kind of fauna information technology is (beef, hog, lamb), what brood the brute is, and the method of product. So, for this example, permit'due south say we take a grass-fed, Angus steer that dresses out to a hanging carcass weight that is 58 per centum of its live weight and your cost to get that fauna to slaughter weight is $one.35 per pound of live weight.
Determining the cost of your animal:
- Start with your per pound cost of the live animate being (equally mentioned before, your price to raise that animal).
- Divide this amount past 58% to get your "hanging cost." (That animal is at present a "carcass" after it is slaughtered. This determines your new cost per pound at "carcass weight.")
- Add together in your processing fees, trucking, etc., to the "hanging cost."
- Split up the total by 65% to go your "cut-out" cost (breaking the carcass down into individual cuts of meat).
- Divide your cut-out cost past the pct mark-upwards you desire to reach the "retail value" price you will ultimately charge.
Here's an example:
Price of the live animal = $1.35 per pound
- $1.35 divided past 58% = $2.33
- $2.33 plus $0.65 (per pound processing fee) = $2.98
- $two.98 divided by 65% = $four.58
This is the final cost of your animal condign single cuts of meat
- $four.58 divided by 75% = $6.11
A auction cost of $6.eleven per pound would give you a 25% return on your product.
As you can run into, in every footstep of the process there is a reduction to your final yield of finished product. So, your cost per pound will go up with every step from live brute to cutting and packaged production. The higher up case will give you lot a crude estimate which tin can aid you to remain profitable. Keep in mind, it is a "rough" estimate. A lot of variables tin can change these percentages. For example, how much fat was on the brute? What kind of cuts are you requesting? Are you getting bone-in or boneless cuts? If you lot desire boneless cuts, this volition reduce the full pounds of product returned to you from your butcher.
What kind of animal you are processing will also brand a departure in the pct of product you ultimately receive. Dr. Christopher Raines, of Penn Country'southward Section of Dairy and Fauna Science, has a handy sheet that describes the average pct of yield in the butchering procedure for pork, beef and lamb. Y'all tin can download Dr. Raines' document at www.das.psu.edu/research-extension/meat.
Dr. Raines' document says when converting an animal into a carcass, the boilerplate percentage of yield for pork is around lxx percent, beefiness 60 percent and lamb 50 percent. Turning that carcass into individual cuts of meat; the average yield for os-in cuts is 75-fourscore percent of carcass weight for pork, 65-seventy percentage for beef, and 70-75 percent for lamb. Dr. Raines points out that crumbling and further processing tin decrease your final production weight. If your butcher is hanging (aging) the carcass for two weeks, in that location is moisture loss due to evaporation. If you are curing hams and bacons from your pig, applying a rut process to your meat cuts may also reduce your final yield.
Using these tools, you should be able to make a rough judge on the amount of product you lot will have for sale, what your costs are, and what you will need to charge your customers to remain profitable.
Source: https://smallfarms.cornell.edu/2012/04/pricing-your-meat-cuts/
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