• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Worthless Trim?

Help Support Ranchers.net:

Sandhusker

Well-known member
Joined
Feb 10, 2005
Messages
18,486
Reaction score
0
Location
Nebraska
I've seen "worthless 50/50 trim" tossed about several times. I'd like to know who is trying to fool who, because I'm not buying the notion that it is worthless, or worth 8 cents as SH says.

In today's grocery flyer, shoulder roast is $1.99. Ground beef is $1.79, and I'm assuming it is 70%. If I have 100 lbs. of that "worthless trim", I would have to add 65 lbs of that shoulder roast to bring it up to 70/30 so I could sell it for $1.79. I now have 165 lbs of burger that I'm selling for 1.79 - this grosses me $295.35. Subtracting my roast expense of $129.35 leaves me with $166.00. That 100lbs. of "worthless trim" had value after all - $1.66/lb.

I realize this isn't perfect as I haven't accounted for grinding and mixing expense, but I think we can all see that trim is not worthless, and is certainly worth more than 8 cents. The questions that beg to be asked is; Why are we being BSed and should we have any reason to believe anything else from those that tell us that trim is worthless?
 

feeder

Well-known member
Joined
Feb 12, 2005
Messages
950
Reaction score
0
Location
Iowa
As a kid I would watch the guys at the local locker plant make hamburger. They would put the fat they trimmed off, the meat left over from boning out the critter, a bunch of red powder and a whole lot of ice. Mix it all up and sell it as hamburger.The fat and left over meat scraps weren't worth much standing on their own merit but mixed together they had value.
 

TimH

Well-known member
Joined
Feb 10, 2005
Messages
1,421
Reaction score
0
Location
Southwest Manitoba
Sandhusker said:
I've seen "worthless 50/50 trim" tossed about several times. I'd like to know who is trying to fool who, because I'm not buying the notion that it is worthless, or worth 8 cents as SH says.

In today's grocery flyer, shoulder roast is $1.99. Ground beef is $1.79, and I'm assuming it is 70%. If I have 100 lbs. of that "worthless trim", I would have to add 65 lbs of that shoulder roast to bring it up to 70/30 so I could sell it for $1.79. I now have 165 lbs of burger that I'm selling for 1.79 - this grosses me $295.35. Subtracting my roast expense of $129.35 leaves me with $166.00. That 100lbs. of "worthless trim" had value after all - $1.66/lb.

I realize this isn't perfect as I haven't accounted for grinding and mixing expense, but I think we can all see that trim is not worthless, and is certainly worth more than 8 cents. The questions that beg to be asked is; Why are we being BSed and should we have any reason to believe anything else from those that tell us that trim is worthless?

Sandhusker, I believe that you have just proven SH's point regarding 50/50 trim. It is not worth much ON ITS OWN. It becomes valuable only when there is INEXPENSIVE lean trim to ADD VALUE TO IT.
Would you grind up $1.99/lb shoulder roast to make hamburger if you had another source of lean meat which cost $1.00/lb??? I'm not a banker, but wouldn't you be better off to sell that roast for $1.99/lb and buy almost 2 pounds of lean trim with that $1.99??
 

Econ101

Well-known member
Joined
Aug 26, 2005
Messages
7,060
Reaction score
0
Location
TX
TimH said:
Sandhusker said:
I've seen "worthless 50/50 trim" tossed about several times. I'd like to know who is trying to fool who, because I'm not buying the notion that it is worthless, or worth 8 cents as SH says.

In today's grocery flyer, shoulder roast is $1.99. Ground beef is $1.79, and I'm assuming it is 70%. If I have 100 lbs. of that "worthless trim", I would have to add 65 lbs of that shoulder roast to bring it up to 70/30 so I could sell it for $1.79. I now have 165 lbs of burger that I'm selling for 1.79 - this grosses me $295.35. Subtracting my roast expense of $129.35 leaves me with $166.00. That 100lbs. of "worthless trim" had value after all - $1.66/lb.

I realize this isn't perfect as I haven't accounted for grinding and mixing expense, but I think we can all see that trim is not worthless, and is certainly worth more than 8 cents. The questions that beg to be asked is; Why are we being BSed and should we have any reason to believe anything else from those that tell us that trim is worthless?

Sandhusker, I believe that you have just proven SH's point regarding 50/50 trim. It is not worth much ON ITS OWN. It becomes valuable only when there is INEXPENSIVE lean trim to ADD VALUE TO IT.
Would you grind up $1.99/lb shoulder roast to make hamburger if you had another source of lean meat which cost $1.00/lb??? I'm not a banker, but wouldn't you be better off to sell that roast for $1.99/lb and buy almost 2 pounds of lean trim with that $1.99??

Tim, You bring a good point. If you do have to bring in $1.99 shoulder roast then there would be less shoulder roast to sell. If you have less shoulder roast, it costs more for the shoulder roast you do have. Then you get more money for it. That brings the producer more money. If packers bring in imported lean trim then you pay the Aussies or someone else for that lean trim and you don't make a dime on it. The packer does.
The point about imports is that it is a substitute for your domestic production and it benefits the importer. Unless you are the importer, it does not benefit you. It takes up a selling space that your shoulders could sell in whether in hamburger if it was a lower quality grade, or in shoulder roasts if a higher quality grade. I don't know anyone who eats a meal of hamburger and then a meal of shoulder at the same time. (Maybe BMR does, I don't know). The question was who the value of imports goes to. It definitely goes to the importer and goes against domestic producers.
 

TimH

Well-known member
Joined
Feb 10, 2005
Messages
1,421
Reaction score
0
Location
Southwest Manitoba
Econ101- "You bring a good point. If you do have to bring in $1.99 shoulder roast then there would be less shoulder roast to sell. If you have less shoulder roast, it costs more for the shoulder roast you do have. Then you get more money for it. That brings the producer more money. If packers bring in imported lean trim then you pay the Aussies or someone else for that lean trim and you don't make a dime on it. The packer does. "

Are you saying, that if the packers can sell a shoulder roast for more than $1.99, that some of that extra value would be passed on to the producer???
 

Sandhusker

Well-known member
Joined
Feb 10, 2005
Messages
18,486
Reaction score
0
Location
Nebraska
TimH said:
Sandhusker said:
I've seen "worthless 50/50 trim" tossed about several times. I'd like to know who is trying to fool who, because I'm not buying the notion that it is worthless, or worth 8 cents as SH says.

In today's grocery flyer, shoulder roast is $1.99. Ground beef is $1.79, and I'm assuming it is 70%. If I have 100 lbs. of that "worthless trim", I would have to add 65 lbs of that shoulder roast to bring it up to 70/30 so I could sell it for $1.79. I now have 165 lbs of burger that I'm selling for 1.79 - this grosses me $295.35. Subtracting my roast expense of $129.35 leaves me with $166.00. That 100lbs. of "worthless trim" had value after all - $1.66/lb.

I realize this isn't perfect as I haven't accounted for grinding and mixing expense, but I think we can all see that trim is not worthless, and is certainly worth more than 8 cents. The questions that beg to be asked is; Why are we being BSed and should we have any reason to believe anything else from those that tell us that trim is worthless?

Sandhusker, I believe that you have just proven SH's point regarding 50/50 trim. It is not worth much ON ITS OWN. It becomes valuable only when there is INEXPENSIVE lean trim to ADD VALUE TO IT.
Would you grind up $1.99/lb shoulder roast to make hamburger if you had another source of lean meat which cost $1.00/lb??? I'm not a banker, but wouldn't you be better off to sell that roast for $1.99/lb and buy almost 2 pounds of lean trim with that $1.99??


Tim, EVERY raw material's value goes up as it is processed. Gold ore is just a rock ON IT'S OWN, but to suggest it has no value would be rediculous. That is a mute point. What I have shown is that it still has value - in this case, a value this is not much less than shoulder roast, which does not even fall in the category of the inexpensive imported lean the packers "have" to have to make burger.

If I was a publicly owned packer who's main focus was maximizing shareholder profits as Tyson is, I would do the same thing (buy lean and sell roasts). That is not my point. My point is that trim is NOT worthless as stated. As you say, you're not a banker, but do you think you could pencil out a burger business if you bought your trim for 8 cents/lb. and US roasts for $1.99? I am a banker, and I'll take all of that 8 cent trim SH can sell me.

What really torks me off is that we're supposed to believe that we (producers) are better off if packers use Aussie lean instead of US chucks. The packers clearly are, but US producers don't have a share in Aussie lean. When somebody says "we profit", they need to define "we".
 

Econ101

Well-known member
Joined
Aug 26, 2005
Messages
7,060
Reaction score
0
Location
TX
TimH said:
Econ101- "You bring a good point. If you do have to bring in $1.99 shoulder roast then there would be less shoulder roast to sell. If you have less shoulder roast, it costs more for the shoulder roast you do have. Then you get more money for it. That brings the producer more money. If packers bring in imported lean trim then you pay the Aussies or someone else for that lean trim and you don't make a dime on it. The packer does. "

Are you saying, that if the packers can sell a shoulder roast for more than $1.99, that some of that extra value would be passed on to the producer???

I guarentee you one thing, Tim: If there are no imports, you will get more money than if there were imports. This even includes the trim argument. Packers would have to pay you more money for your cattle to satisfy the market for beef. I think the packers are as opportunist businessmen and if they did not have to pass on a dollar to the packer they wouldn't. They would just as soon keep it themselves. Do you know any different?

Do you make more money when there are fewer cattle to satisfy consumption or more? Agman's quick quote on that is that for every 1% increase in supply, the price goes down 1.5%. The reverse is true without market manipulation.
 

TimH

Well-known member
Joined
Feb 10, 2005
Messages
1,421
Reaction score
0
Location
Southwest Manitoba
Sandhusker, I'm sorry, but I just can't seem to grasp how DE-VALUEING DOMESTIC CHUCKS AND ROUNDS BY GRINDING THEM could possibly translate into more money for domestic producers.
My understanding of this issue is that all of those domestic choice cattle produce an EXCESS of 50/50 trim. So much so, that there is not enough DOMESTIC lean trim to blend with it ,without DE-VALUEING other lean cuts to obtain the amount of lean meat needed to ADD VALUE to all of the EXCESS 50/50.
BTW, I'm not yelling. The caps are for emphasis only. :)
 

Jason

Well-known member
Joined
Feb 10, 2005
Messages
1,994
Reaction score
0
Location
Alberta Canada
Everyone makes the assumption that having fewer pounds of chuck to sell it will command a higher price.

Without extra processing, it won't. Consumers that will buy chuck, buy it when it is priced cheaper than other cuts.

So basically you have traded the $1.99 for $1.79, plus the fact there is the cost of grinding.

The 50/50 is still unsaleable as it is. Masking the value of the 50/50 by devaluing the chuck is what SH has been telling you.

On the other hand, seperating the ranch cut steak from the shoulder, it reduces the chuck by 5-8 pounds, and yields 70% steak material and averages $5 a pound.

The flat iron steaks reduce the chuck by 5-7 pounds and yields about 50% steak retailing for $5-$9/lb.(average$7.50)

The petite tender is about 1 pound in each shoulder and sells for $5-$7/lb.

The chuck makes up 26-29% of the carcass. A 1300lb. str(dress 60%) would have over 200 pounds of chuck. With the above cuts we have removed about 14.5 pounds of material and sold about 9.5 pounds for $67.25, and have 5 pounds of trim.

The remaining 185 pounds of chuck can still be sold as roasts. In fact I like the chuck roasts better after the cap has been removed for the flat-iron.

At $1.99 the roasts are worth $368.15 the steaks $67.25, the lean trim 5 pounds at a buck, $5. Total $440.40

Grind 200 pounds and sell it at $1.79 = $358

Difference $82.40 per head.

IBP profits as per Pickett $26 per head.
 

Econ101

Well-known member
Joined
Aug 26, 2005
Messages
7,060
Reaction score
0
Location
TX
Jason said:
Everyone makes the assumption that having fewer pounds of chuck to sell it will command a higher price.

Without extra processing, it won't. Consumers that will buy chuck, buy it when it is priced cheaper than other cuts.

So basically you have traded the $1.99 for $1.79, plus the fact there is the cost of grinding.

The 50/50 is still unsaleable as it is. Masking the value of the 50/50 by devaluing the chuck is what SH has been telling you.

On the other hand, seperating the ranch cut steak from the shoulder, it reduces the chuck by 5-8 pounds, and yields 70% steak material and averages $5 a pound.

The flat iron steaks reduce the chuck by 5-7 pounds and yields about 50% steak retailing for $5-$9/lb.(average$7.50)

The petite tender is about 1 pound in each shoulder and sells for $5-$7/lb.

The chuck makes up 26-29% of the carcass. A 1300lb. str(dress 60%) would have over 200 pounds of chuck. With the above cuts we have removed about 14.5 pounds of material and sold about 9.5 pounds for $67.25, and have 5 pounds of trim.

The remaining 185 pounds of chuck can still be sold as roasts. In fact I like the chuck roasts better after the cap has been removed for the flat-iron.

At $1.99 the roasts are worth $368.15 the steaks $67.25, the lean trim 5 pounds at a buck, $5. Total $440.40

Grind 200 pounds and sell it at $1.79 = $358

Difference $82.40 per head.

IBP profits as per Pickett $26 per head.

Jason, what is your point in this exercise? If there were no imports of Aussie lean trimings the price of grind may go up past the 1.99 per lb. Then you could use the chuck, put in some of the neck and other trim as well as the 50/50 trim and make out real well. If you like roasts, you may have to pay a little more for them as well because of the pull from grind.

Did you even read Sandhusker's explanation of how to make that 1.99 chuck worth more with 50/50 trim even if it sold at 1.79? Do I need to do the math for you?
 

Jason

Well-known member
Joined
Feb 10, 2005
Messages
1,994
Reaction score
0
Location
Alberta Canada
Now were back to raise the price and lose a percentage of our customers.

Your like a dog chasing his tail.

Utility grade chicken is cheap. Get the lowest cost burger much higher than it, and consumers will switch.
 

Econ101

Well-known member
Joined
Aug 26, 2005
Messages
7,060
Reaction score
0
Location
TX
Jason said:
Now were back to raise the price and lose a percentage of our customers.

Your like a dog chasing his tail.

Utility grade chicken is cheap. Get the lowest cost burger much higher than it, and consumers will switch.

So now you are saying that imports help us by allowing costomers to keep buying cheap hamburgers with imported meat? What is the difference in imported meat and chicken as a substitute for your beef, Jason?
 

Sandhusker

Well-known member
Joined
Feb 10, 2005
Messages
18,486
Reaction score
0
Location
Nebraska
Jason said:
Now were back to raise the price and lose a percentage of our customers.

Your like a dog chasing his tail.

Utility grade chicken is cheap. Get the lowest cost burger much higher than it, and consumers will switch.

And we're back to tearing up our cribbage hand. We're a sure loser.
 

Jason

Well-known member
Joined
Feb 10, 2005
Messages
1,994
Reaction score
0
Location
Alberta Canada
Chicken adds no value to our trim. Imports do.

You guys just admitted in the burger thread that cheap burgers move more product. The margin might be lower but a low margin is better than no margin.
 

Sandhusker

Well-known member
Joined
Feb 10, 2005
Messages
18,486
Reaction score
0
Location
Nebraska
Jason said:
Chicken adds no value to our trim. Imports do.

You guys just admitted in the burger thread that cheap burgers move more product. The margin might be lower but a low margin is better than no margin.

"our trim"..... who is "our"? I maintain using chucks instead of imports would be more beneficial to me.

Econ makes a very good point with his question on chicken imports. We don't make a penny off either one of them.
 

Jason

Well-known member
Joined
Feb 10, 2005
Messages
1,994
Reaction score
0
Location
Alberta Canada
Sandhusker said:
Jason said:
Chicken adds no value to our trim. Imports do.

You guys just admitted in the burger thread that cheap burgers move more product. The margin might be lower but a low margin is better than no margin.

"our trim"..... who is "our"? I maintain using chucks instead of imports would be more beneficial to me.

Econ makes a very good point with his question on chicken imports. We don't make a penny off either one of them.

"our" is the producers who raise animals with 50/50 trim.

You might maintain chucks devalued as grind are better, but you aren't in that end of the business. The real world numbers disagree with your position.

It is a free country so why don't you buy lots of 50/50 trim and the chucks and sell the burger if it is so profitable?
 

agman

Well-known member
Joined
Feb 10, 2005
Messages
1,664
Reaction score
0
Location
Denver, CO
Econ101 said:
TimH said:
Econ101- "You bring a good point. If you do have to bring in $1.99 shoulder roast then there would be less shoulder roast to sell. If you have less shoulder roast, it costs more for the shoulder roast you do have. Then you get more money for it. That brings the producer more money. If packers bring in imported lean trim then you pay the Aussies or someone else for that lean trim and you don't make a dime on it. The packer does. "

Are you saying, that if the packers can sell a shoulder roast for more than $1.99, that some of that extra value would be passed on to the producer???

I guarentee you one thing, Tim: If there are no imports, you will get more money than if there were imports. This even includes the trim argument. Packers would have to pay you more money for your cattle to satisfy the market for beef. I think the packers are as opportunist businessmen and if they did not have to pass on a dollar to the packer they wouldn't. They would just as soon keep it themselves. Do you know any different?

Do you make more money when there are fewer cattle to satisfy consumption or more? Agman's quick quote on that is that for every 1% increase in supply, the price goes down 1.5%. The reverse is true without market manipulation.

The actual relationship is 1.0 to 1:68. A 1.0% change in supply will change prices inversely by 1.68%, all other factors being equal. Ironically, Econ101, that basic relationship is valid today just as it was prior to marketing agreements. That shoots one more big hole through your endless stream of unsupported price manipulation theories.
 

Econ101

Well-known member
Joined
Aug 26, 2005
Messages
7,060
Reaction score
0
Location
TX
Jason said:
Sandhusker said:
Jason said:
Chicken adds no value to our trim. Imports do.

You guys just admitted in the burger thread that cheap burgers move more product. The margin might be lower but a low margin is better than no margin.

"our trim"..... who is "our"? I maintain using chucks instead of imports would be more beneficial to me.

Econ makes a very good point with his question on chicken imports. We don't make a penny off either one of them.

"our" is the producers who raise animals with 50/50 trim.

You might maintain chucks devalued as grind are better, but you aren't in that end of the business. The real world numbers disagree with your position.

It is a free country so why don't you buy lots of 50/50 trim and the chucks and sell the burger if it is so profitable?

Jason, the local grocery store sometimes sells ground round. It is leaner than ground chuck. Were all of those rounds devalued? Why is ground round more expensive?

To say that you want to bring 50/50 trim up in value with imports and that brings us more value does not take into account the extra meat on the market and what that does to the overall cost of ground beef.
 
A

Anonymous

Guest
Conman: "To say that you want to bring 50/50 trim up in value with imports and that brings us more value does not take into account the extra meat on the market and what that does to the overall cost of ground beef."

Here is another classic example of your never ending beef industry ignorance on display.


We can easily consume twice as much beef as we are consuming today, THE ISSUE IS, AT WHAT PRICE?????? Something neither you or Bullard can figure out.

The additional lean ground beef imports from Australia and New Zealand ARE PRICED LOWER THAN LEANER DOMESTIC GROUND ROUND.

There is a demand for 98/2, 90/10, 80/20, and 70/30 AND IT IS ALL PRICED ACCORDINGLY. Don't believe me, GO TO WALMART AND LOOK.

The domestic ground rounds are leaner so they are in the higher lean category AND PRICED ACCORDINGLY.

The imported lean trimmings that are blended with 50/50 trim end up in the fatter categories AND PRICED ACCORDINLY.

If you grind up the rounds to blend with the trim, all you do is reduce the beef available in the leaner, higher priced category. What kind of idiot would do that? Never mind, rhetorical question.

How can you act like you know anything about economics and be too ignorant to understand that all beef products are not of the same value?

You're a complete phony and you just proved it again (heavy sigh)!



~SH~
 

Econ101

Well-known member
Joined
Aug 26, 2005
Messages
7,060
Reaction score
0
Location
TX
~SH~ said:
Conman: "To say that you want to bring 50/50 trim up in value with imports and that brings us more value does not take into account the extra meat on the market and what that does to the overall cost of ground beef."

Here is another classic example of your never ending beef industry ignorance on display.


We can easily consume twice as much beef as we are consuming today, THE ISSUE IS, AT WHAT PRICE?????? Something neither you or Bullard can figure out.

The additional lean ground beef imports from Australia and New Zealand ARE PRICED LOWER THAN LEANER DOMESTIC GROUND ROUND.

There is a demand for 98/2, 90/10, 80/20, and 70/30 AND IT IS ALL PRICED ACCORDINGLY. Don't believe me, GO TO WALMART AND LOOK.

The domestic ground rounds are leaner so they are in the higher lean category AND PRICED ACCORDINGLY.

The imported lean trimmings that are blended with 50/50 trim end up in the fatter categories AND PRICED ACCORDINLY.

If you grind up the rounds to blend with the trim, all you do is reduce the beef available in the leaner, higher priced category. What kind of idiot would do that? Never mind, rhetorical question.

How can you act like you know anything about economics and be too ignorant to understand that all beef products are not of the same value?

You're a complete phony and you just proved it again (heavy sigh)!



~SH~

SH, When my wife wants extra lean meat, sometimes she will buy ground round. It costs more than 70/30. Personally, if I knew packers were saving a lot of fat trimmings for years to mix, I might not want to buy their old meat blends.

Imports take the place of domestic supply. Importers win. Sometimes consumers win (if imports are being mixed with old 50/50 trim, may be they are just being rookered), and domestic producers lose in the deal. The complimentary value of imports with 50/50 trim do not overcome the substitute costs to the domestic producers. If the packers are so wanting to use 50/50 trim and they don't want to use trim, let them make dogfood out of it. I know my dog would probably like that solution.

I am sorry you do not understand that concept. It is a really basic economic concept. May be that is why you have such a hard time with the Pickett case and want to call it a conspiracy of 12.
 

Latest posts

Top