Saturday, November 10, 2012

The Price Of Beef...Part "Duh"

Took these photos this afternoon on a balmy 63 degree day! Suppossed to turn cold and rain tomorrow. So good to see our animals still muncing on tall (enough)  grass after our horrible summer drought. The rains we had last month were amazing.

If you read my post on Tuesday you know I'm on a beef binge this week, coming on the heels of pork pricing last month. After beef we'll plunge into the dairy and our raw milk business, the farm store, etc...

We might actually get thru this by Jan. 1 !

It feels good to have a plan, as we've been flying by the seat of our pants for years. Yeah, just call me Peter Pan. As our business grew and grew we had less time to evaluate what was working and what wasn't. And it's not that we have MORE time now to do so, it is only that  we have finally made it the priority it needs to be.

So, back to beef. In the last 10 months we sent 30 head to the wait, the "Abattoir" .(Yes, that was for you Cro.)  24 of those were steers or heifers turned to beef  ( 12.75 of those went into our store) and the remaining six were "cull" cows. For you high falutin' city types, a Cull cow is an older cow who know longer is doing well as a milk cow. Because of her age, (facial wrinkles, varicose veins, etc...)  steaks and roasts are generally not as good so the entire carcass is made into some very excellent ground beef.

As folks learned of our farm and the fact that we are the only certified organic, 100% grass fed dairy and beef producer in several counties, we have been able to Pre-sell another 16 into 2013. However, we have over the last 18 months decreased our milking herd by 50%. (I'll explain why when we get into the dairy part of this budget process)

Less cows means less calves so how do we meet the increasing need for beef?

Well, we buy from other organic dairy farmers with extra calves. The nearest we have found is located at the tip of northern Illinois, about 180 miles from us one way) We are fortunate enough that they are expecting an EXCESS of calves. Good news for us.

Now, all is left is to figure out what it costs us to raise these little guys and gals into big steaks and roasts. The process to do so was tedious, but not actual rocket science. We identified all direct costs like housing, hay, bedding, minerals, vet care, etc..The biggest direct cost was processing.

The customer who buys a quarter, half or whole beef from us pays their own processing but when an animal is designated to be sold in our farm store, we pay the processing...and boy, do we pay. For the 12.75 animals that made up our stores beef supply in 2012  we paid the locker $7,548.73 , or $592 per animal. This includes labeling, packaging and weighing.

With the average HANGING WEIGHT of a full beef being 500 pounds, that means we pay $1.18 per pound for packaging alone. It's a hefty hunk we have no control over. We could have our beef processed at a non -organic locker but then we could not legally put the organic label on the package even though the meat is certified organic. But our customers want that label, that assurance that the meat is organic from beginning to end, therefore we process 90% of our beef at the organic locker in Eureka.

Next week sometime, I'll share other beef related costs with you, specifically the non-direct costs like marketing, truck insurance, and then show you how we came up with our final numbers in regards to what it actually costs us to raise that pound of ground. I know this data can be dry and dull but maybe some of you newer pasture type farmers can learn from the process.

We certainly are.

PS  Last week I blew it for Saponification Sunday. Tomorrow, I won't let you down. Cross my heart and hope to lye.


  1. Thanks! I'm listening attentively! Keep it coming!

  2. And don't forget to add in the projected rise in feed costs for this year. Since I bought pigs at the end of June this year one 50 pound bag of pig food has risen $2.18 per bag.

  3. Did you include the 55 cents per mile travel expense allowance?

    Might need to buy a new truck in the future.

  4. I've never seen those figures before. Obviously there has to be a 'preparation' cost... but $592 per animal is HUGE. Mind you; I wouldn't do it for ten times that!!!

  5. Seester! You have caused a question in our house, my "farmer" husband states that the package of your meat does not have to be "vacuum packed", I said that it did do be a certified organic dairy. What is the correct answer?
    Thank you
    Maggie Mae

  6. This is interesting stuff, Donna.
    I am not a farmer, but extremely interested in where my food comes from and how it is processed.
    I'm sure it's all pretty much the same this side of the pond. The arguments about costs and sustainability certainly are.

  7. Susan, I will. I'm on a roll!

    Tombstone, how could I forget? Our grain price is now up by 50% which affects pork prices and hay will be up as well. Details soon

    Doug. We are at this point figuring costs for last 10 months, then we will project costs for 2013. Mileage being so high is just ONE of the reasons we no longer deliver to restaurants. And a diferent truck? Must be one large enough to haul those fat pigs to market!

    Cro. Tell me about it! Thus the reason our future dream does NOT include using the locker, instead we plan to process all our own meat which would just be 3-4 hogs/steers a year. have some crow to eat I am afraid. The national organic standards DO NOT require our meat is vaccuum packaged. We can sell it in white wrap (around plastic wrap) alone if we wanted to. But the average grocery store customer wants to be able to SEE the meat they buy (or they do not purchase it) thus we pay extra for the vaccuum packing for at least 90% of our meat. I hope you didn't bet much!

    Rusty, you are welcome. So many folks don't care where their food comes from. Glad you are not one of them

  8. Thank goodness we will never be doing what you are doing. I have enormous respect for people like yourself, who have large farms. We can only just about manage our fifteen sheep, four goats, loads of chickens, five geese, and three Tamworth pigs! And, sorry, but we are not up for sale!

  9. Vera we're not so big really. We own 10 acres and rent 40 so just 50 acres in total. We have about 75 hogs, 12 dairy cows and another 50 steers and heifers. 1 horse. 1 donkey, 20 peacocks, 20 ducks, 15 cats and one dog. Maybe 100 chickens. One man one woman. See not so big.....

  10. Wonderful to see these calculations. We are just starting out, still selling steers to the saleyards/processors, and would like to sell direct to market one day.

  11. Count me as another nonfarmer who is very interested. A local farmer was culling one of her cows and asked me if i wanted to split the meat with her. I told her i would, and she cautioned as you mentioned, that she'd be best processed as ground and stew meat. I talked to the processors directly so i could say if i wanted any roasts or steaks. I did have some of those, and while yes, the meat is not as tender, it is very flavorful. Besides, i have teeth! LOL

    If you lived closer, i'd be one of your meat customers.

  12. Freighting beef, or any other farm products for that matter, throughout the country shouldn’t be expensive nor time consuming. Once you get to know people who know the ins and outs in things such as trucking insurance, costs and time would significantly be lessened. Letting them do the work for you not only reduces your work load, but reduces the time wasted in answering and handling paperwork.
    Frank Smith @ Coast to Coast Services

  13. Hi I'm trying to build a homemade soap cutter and I was wondering if you could be so kind as to show me the bolts on the front of your soap cutter

  14. Hi I'm trying to build a homemade soap cutter and I was wondering if you could be so kind as to show me the bolts on the front of your soap cutter