Only extra lean ground beef sells for $2.50 and up. Check out the $0.99 specials.
The butcher is making a killing at $0.70 for processing. I pay $0.50 and thought that was bad.
So back to the real amount of beef for sale. You still are at a retail price of $3.33 to the consumer, ground beef and all. The chuck on an animal is about 29% of the weight. Is yours ground or put into chuck roasts? I see lots of shoulder (chuck) roasts sell for under $3/lb. So right there you are making $0.33/lb on 29% of the animal.
The lean ground is $0.30 to $0.80 / lb over market, so you are making that on another 20-25% of the carcass.
You sell the 11% or so of middle meats at a loss from the store of between $1/lb and for the tenderloin of $12 for the small weight of that item. Even say a $2 loss on all 11%.
Then you have the hind end, inside round etc. At $3.33 you are higher than the outside round cuts and about the same as the inside.
All in all you are higher priced than the retail store and we haven't even discussed the costs involved to sell the beef, transportation and labor and utilities and spoil the store has to pay.
Agman had some numbers and the web master Macon had some interesting numbers on retail beef profits a while back. Do a search. I remember the numbers weren't what you would expect, but I don't recall the exact numbers.
By going direct to the consumer you have made the packer, wholesaler and retail margin. By selling a half or whole at a time, you saved the costs involved in marketing, storing, and spoilage.
Can you sell all your years production this way? Can you make a living on your production? I have yet to meet anyone who answers yes to both those questions.
Bottom line, each time a carcass is handled, costs have to be paid. Those who handle beef, packers, distributors, retailers know their costs and bid for the "raw" product accordingly. In the case of retailers, if they can't move a quantity of beef and have a set price given them by head office, they don't order it. Featured prices are sometimes used to move some product at a loss to avoid having to throw it out and losing all the money it cost to buy.
Large supermarket chains bid on wholesale beef from the packers/distributors based on movement of beef the previous week, and seasonal trends. If they have to mark it down to sell it they can't continue to pay the same, so the lower price moves down the line.
Understanding the whole picture and that selling a half here and there isn't the same a retailing beef, makes producers much better able to see market trends and understand some of the detailed info Agman presents here for us.
