Monday, January 21, 2008

The Cost of Beef

At The Sale Barn

January 9th, 2008

Steers with an average weight of 616 lbs (279 kg) brought $101.75 /HW (hundred weight), which is roughly $1.02 / lb ($1.02 / .45 kg).

This is not to say ALL calves sell for this amount. Breed, condition, and weight all play a factor in addition to cash market variables. Additionally, not all of an animal's weight is meat, so the above price already doesn't translate directly to price per pound in the store. Follow this link for a formula to determine how much meat should come from a market animal. According to this link, an average beef cow will dress out at about 63% of its weight.

This gives you a ballpark figure of what Chuck might be worth at this time next year. Obviously, he will be raised differently than his herd mates and headed for a much different market, but his value will still be tied to the beef market. As producers, we hope our custom raised steer will bring a certain percentage above sale-barn value.

How much will our consumers save and producers gain without the middle-man? Perhaps a better question to ask is, "would you be willing to pay more than $600 for food not ready for your plate?" At this time next year, Chuck will have a long way to go before he's ready for consumption.

January 21st, 2009

606 lb. calves brought $100.50/HW, slightly less than last year. At this point, Chuck's market value is $609.

January 4th, 2010

Chuck is now hanging peacefully in a cool, dark locker at the Minden Meat Market. We don't know his pre-slaughter weight, but we're guessing around 1,100 lbs (499 kg). If we assume the formula mentioned earlier is correct, we can expect 63% of this number, or 693 lbs (314 kg).

How do we, then, determine how much we are paying for Chuck? Let's throw out the cost/live animal since the hanging weight will give us more of an idea of the true cost/lb for the end user (eaters) and work with the hanging weight. Follow this link to read about hanging weight.

What was our total cost of raising Chuck? Unfortunately, it wasn't easy or even practical to keep track of feeding costs for Chuck, mainly because he always had a bunk mate. Also, during harvest, we fed Chuck corn cleanings for two months, which is essentially free. We think it's safe to use an estimated cost of $1,000, which is also handy since it's a nice, round number.

If we divide $1,000 by the aforementioned hanging weight, we're looking at a cost of $1.44 / lb ($1.44 / .45 kg). If we use average figures from the formulas cited in the above link, we can expect roughly 485 lbs (220 kg) of take-home meat, which bumps our price up to $2.06 / lb ($2.06 / .45 kg).

We will know more about final costs in a few weeks when we get Chuck back home.


Val said...

I know beef (especially ground beef) is one of the least expensive protein packed foods you can buy - but I am still surprised by such a low price for an entire cow. Is it worth it to you as a farmer to raise cattle? What does it cost to raise a typical steer with food, drugs, vet bills, transportation? And then there is the time you spend working with the steer (feeding it, etc).

JB said...

Val, these are all good questions that I can attempt to answer. Yes, it is worth it for us to raise cattle for a few reasons. Over the long haul, it has been profitable or at least break-even, we have fairly efficient facilities to raise cattle, and, probably most importantly, I like doing it. Ten years ago I was ready to sell all of our animals and rent out our facilities, but like other farming activities, raising cattle got in my blood. Additionally, this particular project has been extremely educational for me and is an area I've always been interested in. I look at it as direct, hands-on learning not only as a producer, but as a consumer as well. As for the cost of a typical steer, I'll add that to the original post.

bach said...

I saw an ad for farm raised natural beef this AM for $4.00/# - on the hoof and at the farm. Assuming a 1000# steer, another $150 for transportation and slaughtering (too low, it's been at least 10 years since the last time I slaughtered one of our steers) and a 63% cutout, the $/# of the hamburger, roasts, steaks, liver, tongue, etc from this animal would be $6.59. Looking at these numbers reinforces my decision to sell the calves and buy them back in the grocery store.

JM said...

I've not looked at the cost of hamburger at the natural food stores or the specialty meat shops yet, but at the regular grocery store I am paying $4.49 per pound for 96% lean hamburger.