Rod: "No SH, the implication is that you don't know the difference between gross and net profits. Everyone else who read that message understood exactly what I meant."
I know the difference between gross profits and net profits. Most people discuss net profits not gross profits. Until all the expenses are figured, nobody makes a profit.
You didn't specify "gross profits" until after the fact but rather than argue with you, I'll give you the benefit of the doubt and assume that your $663 profit was referring to profits before processing costs which to me is not profit.
Here's the dictionary's definition of profit:
The amount of money gained from a business venture after all of the expenses have been paid; earnings.
Again, nobody disucsses "gross profits" when discussing profits unless their looking for an excuse for their ignorance.
Rod: "I used 63% of live weight to calculate out retail, then IMMEDIATELY retracted the 63% figure and went with your ERRONEOUS 40%."
WRONG AGAIN ROD!
Here it is:
DSCC: "Those numbers come from the packers themselves. I don't buy them. Lets take 5 culls I shipped yesterday as an example. I received $27.25/cwt, which was almost top of the market. Total weight was 5702 lbs and I received $1553.79. After freight, salebarn comissions, check off, etc etc, I got a cheque for $1301. So $260/animal.
A couple of those animals were 2 year old heifers, so they aren't going for hamburger, but just to make it easier, we'll assume thats where they end up. We'll even make it easier and assume that only 50% of the animals are used, even though we both know an Angus is going to give more than 50%. So 2851 lbs of hamburger, or 570.2 lbs of hamburger on each animal. Regular ground beef today at the Co-op was $1.99/lb. So $1135.00 for each animal.
So where in hell did the $875 go? I know the buyer who bought my animals. He gets 3% of the original $1554.00. So $6.92/animal. We're now down to 868.08. The animals went straight to the packing plant on a cattleliner at an absolute max of $15/animal trucking, and probably closer to $8/head. We're down to $853 total profit on the animal thus far.
My local Co-op gets a 20% markup on beef. Which means they paid $945 for that animal or $190 profit. So that leave $663 profit made on that animal.
Only two places could have made that profit: The packer or the middleman who sold to the Co-op, who in this particular case, happens to be the packer.
So since the packers are only making $3.88/animal, does that mean they are really so inefficient that it costs them $659.12 to process the animal, cover their admin costs and keep the lights on? And we haven't even gotten into the parts of the animal that went for fido food and other uses. Come on yourself. The $3.88/head is simply a bookeeper managing to work the numbers so it doesn't appear as though the packer is raping the marketplace."
As anyone can plainly see, it was not a 63% carcass yield you initially figured but rather a 50% red meat yield from the live animal and that too was wrong.
63% is about right for a carcass yield on a younger animal. Carcass yield is not red meat yield.
You clearly forgot red meat yield. As the animal gets older, the carcass yield drops to about 50% to 55%. Of that carcass, about 2/3 is red meat and about 1/3 is bone and fat ("
red meat yield").
My "so called" ERRONEOUS 40% was bone and fat from the carcass, NOT 40% OF THE CARCASS YIELD FROM THE LIVE ANIMAL AS YOU HAVE CLEARLY SUGGESTED.
Here is my exact response to your fuzzy math:
SH: "Second, an 1140 pound heiferette is going to yield 684 pounds of CARCASS, NOT BEEF. Of that Carcass, approximately 40% is bone and fat worth about $.08 per pound, NOT $1.99.
Your actual amount of ground beef is closer to 410 pounds off an 1140 pound carcass, not 570 pounds. The value of the ground beef from cull animals is about $1.00 per pound, not $1.99 per pound."
As anyone can plainly see, you considered 50% of the live animal to be ground beef valued at $1.99. You missed it by a mile.
1. You missed the red meat yield from the carcass which is about 60% - 66% of the carcass weight or 40% of the original live weight.
Prove me wrong on that Rod!
2. You missed the ground beef price.
3. You missed any potential injection site lesions or bruising (may not have been a factor if you are practicing good husbandry).
4. You missed the trim
5. You missed the shink
Would you like to debate any of these 5 factors Rod?
This is what you missed before we even got into the processing costs.
As anyone can clearly see that knows anything about retail beef profits, you had no clue what you were talking about.
A red meat yield of 50% of the carcass valued at $1.99.
That was your position, and that will remain your position until you can show the integrity to admit you are wrong.
Rod:
"So where in the hell did the $875 go"???
Have you figured it out yet?
Your fuzzy math is the same math formula used by R-CULT when they claimed "there is no greater proof of market manipulation than the retail to fat cattle price spread". Shortly after that, Future Beef went broke. Which factor carries more weight? The need to blame or the facts?
Rod: "Your SRM removal numbers are TWICE mine."
What are "MY" SRM removal costs Rod? I guess I don't remember speculating on SRM costs. If I mentioned SRM costs, it was someone else's estimate, not mine.
Rod: "MIne come from federally inspected butcher shops, which means that the SRM removal is IDENTICAL to that of a large packer. Since you like to prattle on about how larger is ALWAYS more efficient, how is it that the little fella can remove and dispose of SRMs for half the cost of the big packer?"
The cost of SRM removal is not just the cost of the actual removal, it's the cost of lost value.
Have you read the Alberta Government Study and read their costs of lost value due to SRM removal?
When talking about the "cost of SRM removal", most estimates are referring to the lost value as well as the costs of actual removal.
Did we confuse terms again?
~SH~
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