Direct marketing of Shorthorn beef

[trevorgreycattleco]

Location, location, location. Not only in real estate but in meat sales as well. The land you can afford to run cattle on is usually way far away from an urban area. For every successful direct marketer I can show you, I could show you five that failed. I’m not sure if I’ll make it or not. One thing I’ve learned is to have different products to offer. Beef sells but beef sells better when you have bacon to sell along side it. Or chicken or whatever. Customers want to know your story. They want to visit. Take pictures and post to social media showing themselves as progressive thinkers. It’s all a game really. You can’t be afraid to be told no. My old man sold millions of dollars of water softener systems to caterpillar and other companies. He taught me the basics but it’s rough. Not only finding customers, but finding a good butcher, having storage, being a good marketer, learning how to cook all the cuts. Educating customers. Competing against other farmers selling at cut throat prices. Farmers passing off mediocre products that effect us all. On and on.

 

[OKshorthorn]

This is a new venture for us, we have talked and wanted to do it for the past several years but couldn't make it work. Problem for us was the bank note, we couldn't afford to skip a year selling weaned calves to get them ready for butcher, and finally get paid, the following year.

Anyway, I think being in Oklahoma helps with some of the problems you all are having with more a more urban population. We have the demand, just not enough supply.

I don't understand the pricing issue, saying that Walmart sells cheap beef and it makes it tough to compete. From my experience, Walmart is the same as the local grocery store, ground beef is around $3.00 pound, strips $11/12 a pound, ribeye's $14 a pound, an so on. My idea on direct marketing is not trying to sell an individual ribeye steak to a single person, and I don't think you should have that mentality either. However, if you do, what do do you have in him after processing and feed, $1,000? $2.30/per pound? Why can't you compete with Walmart when your cost, regardless of cut, is $2.30/per pound?

If I'm selling a 1/4, 1/2, or whole beef, the number I look at isn't $ per pound, but revenue - expenses = ?? If I have a 1,200 pound steer on the hoof, maybe he is 720# hanging. I'm going to sell at hanging weight $3.25 per pound. That's gross revenue of $2,340 for that calf. If my total input was $500, then my profit is $1,840.

On the consumer end, if they are buying a 1/2, they are going to be paying $1,170, plus half the processing at $0.70 per pound hanging weight, $252, for a total of $1,422. They are paying $6.58 per pound.

That is an easy sell. The high dollar hamburger meat around here at Walmart sells for $6.00 a pound. The big thing nowadays is farm to table, hormone free, antibiotic free, on and on, anyone that cares at all about the food they feed their families will happily pay $6.58 per pound for a 1/2 beef. You just have to tell them about it.

I had a woman call me a couple years ago asking if I could sell her an antibiotic free beef, I told her sure, I can sell you a beef that doesn't have any antibiotics in it at the time of butcher by following the strict withdrawal periods listed on the medication, she says no, I mean no antibiotics ever. I explained to her that I had not kept records as to which baby calves had been sick that winter and were given a dose of Draxxin, so I couldn't tell her for certain if they had or not. After a quick lecture from her about antibiotics, I told her that I was not about to let a baby calf die, because some woman in Oklahoma City is paranoid and that she was more than welcome to go buy some land around here at $6,500/acre and raise her own damn beef. I did learn one thing, keep track of who I give meds too, because to that woman, I could have sold her a 1/2 for $8.00/per pound if it was "antibiotic free."

 

[shortybreeder]

This is a new venture for us, we have talked and wanted to do it for the past several years but couldn't make it work. Problem for us was the bank note, we couldn't afford to skip a year selling weaned calves to get them ready for butcher, and finally get paid, the following year.

Anyway, I think being in Oklahoma helps with some of the problems you all are having with more a more urban population. We have the demand, just not enough supply.

I don't understand the pricing issue, saying that Walmart sells cheap beef and it makes it tough to compete. From my experience, Walmart is the same as the local grocery store, ground beef is around $3.00 pound, strips $11/12 a pound, ribeye's $14 a pound, an so on. My idea on direct marketing is not trying to sell an individual ribeye steak to a single person, and I don't think you should have that mentality either. However, if you do, what do do you have in him after processing and feed, $1,000? $2.30/per pound? Why can't you compete with Walmart when your cost, regardless of cut, is $2.30/per pound?

If I'm selling a 1/4, 1/2, or whole beef, the number I look at isn't $ per pound, but revenue - expenses = ?? If I have a 1,200 pound steer on the hoof, maybe he is 720# hanging. I'm going to sell at hanging weight $3.25 per pound. That's gross revenue of $2,340 for that calf. If my total input was $500, then my profit is $1,840.

On the consumer end, if they are buying a 1/2, they are going to be paying $1,170, plus half the processing at $0.70 per pound hanging weight, $252, for a total of $1,422. They are paying $6.58 per pound.

That is an easy sell. The high dollar hamburger meat around here at Walmart sells for $6.00 a pound. The big thing nowadays is farm to table, hormone free, antibiotic free, on and on, anyone that cares at all about the food they feed their families will happily pay $6.58 per pound for a 1/2 beef. You just have to tell them about it.

I had a woman call me a couple years ago asking if I could sell her an antibiotic free beef, I told her sure, I can sell you a beef that doesn't have any antibiotics in it at the time of butcher by following the strict withdrawal periods listed on the medication, she says no, I mean no antibiotics ever. I explained to her that I had not kept records as to which baby calves had been sick that winter and were given a dose of Draxxin, so I couldn't tell her for certain if they had or not. After a quick lecture from her about antibiotics, I told her that I was not about to let a baby calf die, because some woman in Oklahoma City is paranoid and that she was more than welcome to go buy some land around here at $6,500/acre and raise her own damn beef. I did learn one thing, keep track of who I give meds too, because to that woman, I could have sold her a 1/2 for $8.00/per pound if it was "antibiotic free."

Not sure how you're producing fat calves with a total input of $500... but it is important to remember that, economically speaking, the calves you feed out have a value when they get put on feed. The opportunity cost is important to keep in mind with these enterprises. You also didn't get all the way through producing a weaned calf for free, and therefore your profit isn't actually $1800+ like you stated.

 

[AZWrightCattle]

Have any of you looked into how the Piedmontese cattle are marketed and sold here in the US and World?

They are doing so well they are upping the premium for producers from $60-$80 dollars a head to $150 dollars a head. The niche marketing for shorthorns would be different but a lot of the same things could be done.

 

[OKshorthorn]

This is a new venture for us, we have talked and wanted to do it for the past several years but couldn't make it work. Problem for us was the bank note, we couldn't afford to skip a year selling weaned calves to get them ready for butcher, and finally get paid, the following year.

Anyway, I think being in Oklahoma helps with some of the problems you all are having with more a more urban population. We have the demand, just not enough supply.

I don't understand the pricing issue, saying that Walmart sells cheap beef and it makes it tough to compete. From my experience, Walmart is the same as the local grocery store, ground beef is around $3.00 pound, strips $11/12 a pound, ribeye's $14 a pound, an so on. My idea on direct marketing is not trying to sell an individual ribeye steak to a single person, and I don't think you should have that mentality either. However, if you do, what do do you have in him after processing and feed, $1,000? $2.30/per pound? Why can't you compete with Walmart when your cost, regardless of cut, is $2.30/per pound?

If I'm selling a 1/4, 1/2, or whole beef, the number I look at isn't $ per pound, but revenue - expenses = ?? If I have a 1,200 pound steer on the hoof, maybe he is 720# hanging. I'm going to sell at hanging weight $3.25 per pound. That's gross revenue of $2,340 for that calf. If my total input was $500, then my profit is $1,840.

On the consumer end, if they are buying a 1/2, they are going to be paying $1,170, plus half the processing at $0.70 per pound hanging weight, $252, for a total of $1,422. They are paying $6.58 per pound.

That is an easy sell. The high dollar hamburger meat around here at Walmart sells for $6.00 a pound. The big thing nowadays is farm to table, hormone free, antibiotic free, on and on, anyone that cares at all about the food they feed their families will happily pay $6.58 per pound for a 1/2 beef. You just have to tell them about it.

I had a woman call me a couple years ago asking if I could sell her an antibiotic free beef, I told her sure, I can sell you a beef that doesn't have any antibiotics in it at the time of butcher by following the strict withdrawal periods listed on the medication, she says no, I mean no antibiotics ever. I explained to her that I had not kept records as to which baby calves had been sick that winter and were given a dose of Draxxin, so I couldn't tell her for certain if they had or not. After a quick lecture from her about antibiotics, I told her that I was not about to let a baby calf die, because some woman in Oklahoma City is paranoid and that she was more than welcome to go buy some land around here at $6,500/acre and raise her own damn beef. I did learn one thing, keep track of who I give meds too, because to that woman, I could have sold her a 1/2 for $8.00/per pound if it was "antibiotic free."

Not sure how you're producing fat calves with a total input of $500... but it is important to remember that, economically speaking, the calves you feed out have a value when they get put on feed. The opportunity cost is important to keep in mind with these enterprises. You also didn't get all the way through producing a weaned calf for free, and therefore your profit isn't actually $1800+ like you stated.

That's the way I look at it. I have some cows that are paid for, I have annual expenses related to keeping said cows alive, I sell baby calves to cover those expenses. Once those expenses are paid for, the rest of the revenue is profit. I like numbers, and have gone way more in depth to those numbers, economically speaking. But it just doesn't make sense (for us) to look at it that way, the numbers just aren't big enough to matter. Revenue - Expenses = Profit. That's about as in depth as I go with our little hobby.

500 pounds of feed from the elevator is $100, if a steer was to eat 15 pounds per day, it would cost me less than $300 to feed him for 90 days, about $75 for hay, I don't really figure in the electric bill it cost to pump their water out of the ground. My point is it doesn't cost me more than $500 to feed out a year old calf to prepare for butcher.

 

[Shorthorns4us]

I think I need to clarify my model that I am working in my area.  I am selling what I call "bulk" method-- you buy a whole, 1/2 or 1/4 carcass from me.  You pay me for the hanging weight.  Last year I charged $2.65 per pound.  The customer pays the processing at the locker themselves.  They get a great deal compared to buying at the store-- even our cheap Wal-Mart here.  But most people here 1.  don't want that much at a time.  or 2.  Can't afford that much at a time.  You have a circle of people that do want this so you sell to as many as you can find.
I also sell what I call "Retail"-- this is meat the is by the package-- yes I can sell you 1 ribeye steak if that is all you want.  I compare the prices to my local Fareway, Hy-Vee and other stores-- even the Wal-Mart to set my price-- also taking into consideration what my expenses are for getting it in the package. 

The reason I started the retail was to try to get a portion of customers that don't want 1/2 beef at a time-- we have a lot of elderly folks, empty nesters, etc.  that just don't have the space or money for a 1/2 beef commitment.  But-- they would be interested in 5 pounds of this and 5 pounds of that at a time.  I thought it was a great idea to try to broaden my customer base and another revenue stream. 
I do price my cuts above the stores most of the time-- I have to cover costs and still make a little--
I lose on weeks that Hy-Vee is selling T-Bones for 5.99 a pound.  I sell for 7.99 per pound-- I can't sell for 5.99 per pound-- it doesn't pencil out for my situation. The Wal-Mart here will sometimes have gr. beef for like 1.99 per pound.  I don't sell my ground beef that low- so that is how the ball bounces that week.
The same thing happens around here to the veggie guys-- Hy-Vee is selling tomatoes at .99 per pound-- the veggie farmer guy isn't selling his tomatoes at farmers market for that low.
EF