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Why Direct Market Meat Keith Vander VeldeUW Extension Livestock Specialist Marquette County
February 25, 2010---Mauston
Why Direct Market Meat Sell at Auction:
Advantage: Disadvantage Paid day of auction Price Set by Buyers Sell on live weight basis Yardage and Sales Cost Little time in transaction No buyer loyalty
Today's Prices:1,200 lb steer @$0.92 cents per lb.
$1,l04 -$25(sales expense)= $1,079
Why Direct Market Meat Selling Direct to Packer(Selling on the Grid)
Advantage: Price is usually based on carcass weight Price is usually based on set price for each carcass grade Can build packer relationships with high grading cattle Premiums paid for high choice and prime cattle Premiums paid for yield grade 1&2 cattle
Disadvantage: Poor grading cattle sell at discount Discounts on yield grade 4’s and 5’s Payment usually 3 days from delivery day
1,200 lbs live @ 62 dressing %=744 lbs x $1.49=$1,108
Why Direct Market MeatSelling Direct to Consumer
Advantages: You set the price (Market plus) Method to capture special production methods
Organic Natural Hormone Free Anti-biotic Free Home raised source identified
Why Direct Market MeatSelling Direct to Consumer
Disadvantages: You Must Sell the entire animal as meat Few clients want the whole animal Must sell as halves, quarter, bundles A steer is not all “Steak” Must schedule with local processor for harvest date You are responsible for collecting from clients If Dissatisfied with product client may want refund Unhappy can disrupt future sales
744 carcass weight @ $.175=$1,302
Why Direct MarketLets Compare:
Auction= $1,079
Grid= $1,108
Direct Market: $1,302 a $200-$223 Premium
Why Direct MarketPricing Example
Steer: 1,200 pounds live weight Yield at 62% provides 744 lbs of
carcass Yield will range from 56-65% Dressing Percent
Higher for Beef Breeds Lower for Dairy and Dairy Crosses Fatter Cattle have higher dressing %
Pig: 250 pounds live weight Yield at 70% provides 175 pounds of carcass Yield will range from 65-75% Dressing Percent
Sheep: 140 pounds live weight Yield at 50% provides 70 lbs of carcass
Yield will range from 45-55% Dressing Percent
Why Direct MarketYield Example
Beef Pork Lamb
Expected
Cutting Yield55-68% 65-75% 45-65%
Carcass Weight
744 lbs 175 lbs 70 lbs
Packaged Meat Weight
400-500 lbs 114-132 lbs 32-46 lbs
(40% of Live
Weight)(50% of Live
Weight)(30% of Live
Weight)
Why Direct MarketWhat’s in the Package
Beef Untrimmed Cuts
Trimmed
Cuts
Ground Beef Usable Product
% Total Cuts
Round (22%) 164 73 32 105 14 Sirlion Tip
Round Steaks
Round Roast
Rolled Rump
Loin (16%) 119 45 16 61 8 T-Bone
Porterhouse
Sirloin, NY Strips
Tenderloin
Rib(9%) 67 41 13 54 7 Rib Steak & Roast
Ribeyes, Short Ribs
Chuck(27%) 200 82 67 149 20 Chuck & Arm Roast
Chuck Steaks
Flank, Plate
Brisket, Shank(20%)
148 40 58 98 13 Flank Steak
Brisket, Short Ribs
Soup Bones
Miscellaneous
(6%)
45 7 7 1
Total 744 281 193 474 63%
Why Direct MarketDetermining a Price
Beef: 744 lbs of Carcass at $1.75 (a $.25 premium) Processing $275 $1,302 =(744 x $1.75) + $275 ==$1,577 474 lbs of saleable meat Price per pound received by client=$3.33
Why Direct MarketDetermining a Price
Beef: $3.33 per lb for the entire combination Cheap for Steaks High for Hamburger Price Sensitive Buyers are not your Clients
Why Direct MarketFinding Clients
Most Likely Buyers Are: Wanting Source Identified Meat Health Considerations Important Organic or Natural High Quality Consistency Accept Variety of Cuts Lean Ground Product Have Freezers
Why Direct MarketFinding Clients
How to Market in Direct Selling:Best Method- Hanging Carcass Weight paid to you Work with Processor to Collect for Processing Sell halves or quarters Avoid individual wholesale cuts Consider Marketing unsold portions to processor if
they have retail outlet for product
Why Direct MarketKeeping Clients
Client Retention and Promotion Satisfied Customers Come Back Satisfied Customers Tell Friends Know Your Clients Family Size-Estimate Their
Time to Consume Your Meat- Do a Follow-up phone call one month after the
client picks up the meat-learn about their satisfaction level
Why Direct MarketKeeping Clients
Client Retention and Promotion Dissatisfied Customers Are Hard to Get Back Dissatisfied Customers Tell Everyone Without Follow-up With Clients They Feel You
Are Not Interested in how they feel about the meat-
Consider some method to win customers back (ie Refund, Discounts)
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