Beef Marketing

Discussion in 'Homesteading Questions' started by Jena, Jun 26, 2004.

  1. Jena

    Jena Well-Known Member

    Messages:
    2,490
    Joined:
    Aug 13, 2003
    I had a visitor today and was sitting there looking at my nearly finished cattle, explaining yet again how I only sell sides or quarters. Well the word "sell" is misleading because I haven't had much luck.

    People here are used to buying freezer beef, at slightly above sale barn prices, then having it done at the uninspected custom slaughter house. I don't want to sell that way, nor settle for those prices.

    When I find someone that wants my beef, they don't have the freezer room.

    In selling my ground beef, I often have folks ask for steaks or whatever. Like a true dummy I sit there and explain how I only sell sides. My potential customer walks away while I am oblivious to the obvious! DUH!

    I need to sell by the retail cut. It wouldn't be any different than how I sell chickens...I get an order, take them out, write up a ticket based on the weight of the bird and my price per pound. I can do that.

    I have avoided this because when I start trying to figure up pricing, it just seems like a huge job. I would have to price the stuff so that I don't end up selling out of steaks quickly and being stuck with a freezer full of chuck roasts.

    I think I'm making it way harder than it has to be, but my over-thinking mind won't let it go. I analyze, figure, do percentages until I'm just frustrated and ready to give up. Maybe I ought to go to wally world, check the prices and up them by 30%, then add it up and see if I'll make money that way. I don't know.

    Any help would be appreciated.

    Jena
     
  2. John_in_Houston

    John_in_Houston Well-Known Member

    Messages:
    311
    Joined:
    Nov 26, 2003
    That sounds like a good first stab at the problem. See what those numbers give you!
     

  3. Cyngbaeld

    Cyngbaeld In Remembrance Supporter

    Messages:
    28,248
    Joined:
    May 20, 2004
    Location:
    SE Missouri
    What kind of beef is it? Grass fed? organic? You may have said somewhere else and I missed it.

    Is there any reason people should want to buy your meat instead of the sale barn stuff. How are you advertising?
     
  4. Ken Scharabok

    Ken Scharabok In Remembrance

    Messages:
    6,844
    Joined:
    May 11, 2002
    Jena:

    Bear in mind what doesn't sell as prime cuts can be turned into hamburger later (or sold at hamburger prices). Basically all you are telling the processor is to cut out and separately wrap the more desirable cuts. Then turn the rest into hamburger.

    What you are selling is as much 'known source' as quality. Heck, if you have a digital camera take a picture of the animal on the hoof to show to prospective buyers of the beef, "This is where your meat came from." Also buy a package of Wally World beef just for get a label so you can point out it actually says brine was injected into the beef.

    On pricing, Wally World plus 30% may be a good starting point. If you sell out, raise price. If you don't either adjust prices downward or go the hamburger route.

    Sides (or even quarters) are going to become even more difficult to sell in the future. Fewer and fewer homes now have a large freezer, which would be required. Family sizes are smaller, resulting in a decreased demand for beef, particularly in bulk. The ready convenience of supermarkets, which often put beef on sale as a marketing lure. Two income families, resulting in more and more meals either being eaten out of the home or meals being purchased precooked. Past bad press on possible health hazards of eating red meat, coupled with frequent advertising by the poultry and hog industries as healthier alternatives. Although people say they want quality food, getting them to buy it is difficult. The vast majority of people are no longer accustomed to buying a product in bulk. Assuming half of the 125 pounds of red meat eaten by the average American annually is consumed at home, a typical beef carcass would last a family of four for almost two years and, despite years and years of advertising and good press, buyers of organic products still account for about five percent of residential consumers. Probably should add to this fewer parents are passing on cooking skills to their children. Home cooking is a skill lost in a single generation.

    Ken Scharabok
     
  5. cloverfarm

    cloverfarm Well-Known Member

    Messages:
    717
    Joined:
    May 31, 2004
    Location:
    Michiana
    Its true not everyone makes a good customer!

    We sell *all-natural no hormones no antibiotics no animal-by-products* do it by word of mouth and sell halves, quarters and mixed quarters (half from the front -- chuck and ribs -- and half from the rear, steaks and roasts) In the past we set a price about twice the live price and marked it up a little every year. When cattle were selling in the 50s we are much better off selling freezer beef at $1.30 a pound (65 cents live) This year we are doign better at the auction. I should add until recently these were all Holstein bull calves out of our dairy cows so to get 65 cents a poudn (live) for Holstein steers consistently helped a lot.

    Some of the best times to market are spring, because people are thinking of Memorial Day, Fathers Day and 4th of July cook-outs. Fall is good because people want to stock up for winter and have roasts on hand for cold winter days.

    DH lines up customers and cattle, sends them to the local packer and then the customers pay the packer for the processing, and us for the beef. He does spend some time on the phone but he enjoys doing that. (He-s a great front man for my mom and dad at craft shows!) He even makes cold calls if he ever got a hint from someone that they might vaguely be interested in freezer beef.

    We have never gotten into pricing it otu by the cut or by the pound although our packer could probably help us with that. If we wanted to do it. One of the other producers sells by the pound at the farmers market.

    The packer charges $12 a head for kill fee and inspection, and about 33 cents a pound for processing. Less for simple cuts, more for making hamburger patties or corned beef or whatever. The customer pays the processing. (My SIL, a college student, got every possible cut and process and we were going to give them the meat and about passed out when we saw the processing bill :haha:

    Our outlets are word-of-mouth sales and the local auction. Right now fat black cattle have been selling well but that is always subject to change.

    Not everyone wants to buy 325 pounds of beef at a time, thats for sure.

    It took several years to build up a customer base and part of that is our local culture. This is an Amish Mennonite area and folks see freezer beef or pork as a good deal but snort at $5 a piece for chicken raised outdoors. Also, people around here still cook and know what to do wiht various cuts of meat. (I-m not slamming my fellow home-makers -- the gal that cuts my hair said she wouldn-t know what to do with a whole chicken :confused: No one that we sell to is real hepped up about organic. We had one customer that wanted to know in detail if the animals were treated humanely. Apparently they were satisfied.

    What works for us might not translate into a different area. We have LOTS of small farms in this area, three local packers we can ship cattle to, two good local auctions and people are comfortable with the idea of buying a 300-pound side of beef once or twice a year. Also, DH sells more to men who like the idea of gobs of red meat in the freezer. Works for him!

    I dont know if htat helped or not but its how we-ve done it for a long time. It will be interesting to see if local marketing continues to grow as more people get turned off of conventionally produced meats. Hope so, anyway!

    Ann
     
  6. Jena

    Jena Well-Known Member

    Messages:
    2,490
    Joined:
    Aug 13, 2003
    It is corn fed, but...

    I feed no animal proteins and these animals were born on my farm. They are mad-cow SAFE. I don't do anti-biotics or hormones. The corn I raise to feed them is non-GMO, food grade corn.

    Those are the reasons they ought to buy it, but most of the locals don't care about that. They do care about taste and want a non-feedlot beef, but they really don't see a reason to buy mine rather than someone else's.

    The people who buy my burger are not quite as farm-savvy. They like the taste and there are a few who care about the other stuff. I have lots of chicken customers who care about the health stuff, but they don't eat red meat!

    I have not advertised a lot for beef. Mostly when I make other sales and give a brochure, they ask about it, or I point out that I have beef, pork and turkey too.

    From the dismal results so far...I'm reluctant to put much money into advertising it until I think I can justify the cost with sales. If I do the retail cut deal, I would be more confident that I could meet anyone's needs...whatever they ask for, I ought to have! I would then feel the advertising dollars would be more justified.

    Jena
     
  7. goatlady

    goatlady Well-Known Member Supporter

    Messages:
    1,731
    Joined:
    May 31, 2002
    Location:
    No. Cent. AR
    Around here several friends sell by the side and quarter, byt they take the beef to the processor, meet their customer there, collect their price per pound, and leave so the customer then deals with the processor on how to cut and wrap and pay the processor for same. 2 quarters and 1 half = 3 customers. They line up their orders in the summer, call the customers a week prior to delivering the animal and finalize times and dates. Works well for them.
     
  8. Ross

    Ross Moderator Staff Member Supporter

    Messages:
    13,084
    Joined:
    May 9, 2002
    Location:
    Ontario
    No farmers markets near by? Maybe you should start one, a reasonable alternative to the butcher shop idea if there's enough people around to be vendors and patrons. I sell by the cut at the local farmers market, mark up over the price by the side is about 35%. If you can sell vac packed it helps a lot. Odd cuts make great steak and mushroom pies or steak and kidney pies that sell at a premium fully cooked and frozen. I am looking at a way to sell here on the farm between market days (People do ask!) , and I think I may be close to working out the problems. The biggest problem I have is that we have a kennels here and while I want the kennel customers to think about the lamb cuts, free range chickens and the beef pies we sell, (I don't raise beef any more but we do make beef pies), I don't want every scruffy hound sniffing and jumping up on the freezer or that thought going through their minds. It needs to be seperate but where they'll walk by. Only process enough to sell in 6 months but good vac packing will preserve meat for 18 mos. Paper wrapped retail sales is a bother I won't repeat, people want to see the cut they are buying. To be frank you want to see what you're selling too. You'll probably need legal for trade scales, I have a set of TEC sl2200 which if I can find the printer that matches it will be a nice unit, but for now the price computing feature is very handy on it's own.
     
  9. cloverfarm

    cloverfarm Well-Known Member

    Messages:
    717
    Joined:
    May 31, 2004
    Location:
    Michiana
    I was ruminating (pardon the lame humor) about all this this AM and realized I left out a segment of people that we market to ... extended families. We have several customers where Grandma and Grandpa buy the half and then divide out amongst the grown kids ... or the most responsible sibling organizes a buy for the brothers and sisters.

    Also ... we have a yuppie cousin in Chicago who is part owner of one of the farms and he has tapped into some health-wary buyers.

    We have heard rumbles from teh local produce auction taht if you can get stuff into Chicago farmers markets the prices are good. (The logistics are staggering for us, though.)

    However, if farmers markets are like the arts & crafts shows my folks took us kids to, somedays you get the gold mine and some days you get the shaft.

    So ... our buyers are: farm-raised rural folks who can and freeze stuff already ... red-meat eaters like DH-s bow hunter friends ... family groups ... and a few folks wiht food fears or humane concerns.

    I wonder about ethnic (Hispanic) markets since from what I hear, home-making and good food are more highly valued than in our society at large. For instance the *Got Milk?* campaign didn*t work for them because it would be embarrassing to be such a poor home-maker that you ran out of milk. so they changed it to *Feel the love* or something along those lines, milk (or wholesome food) = love

    We read a lot about farmers markets in Stockman Grass Farmer but every community is so different.

    For my in-laws this all started out as what to do with butcher cows and bull calves, it grew by word-of-mouth and DH is continuing with it. Its not a majority of the farm income but is a good part of it.

    Interesting to read all the thought on this ...
    Ann

    PS ... another thought ... for various reasons we have lots of stay-at-home moms and large families in our community so there might be more meals cooked at home. Also we have bartered the beef for goods and services and often get repeats and referrals from that.
     
  10. Jena

    Jena Well-Known Member

    Messages:
    2,490
    Joined:
    Aug 13, 2003
    Chicago is a lucrative market, but it's just a bit too far for me. The guy who does my chickens sells 2400 a WEEK there!

    I have no ethnic market here.

    I guess I want to move away from the rural folks who buy my chickens and get the townies for the beef. I won't leave my chicken customers and hopefully can add chickens to the beef orders for townies.

    I'm going to wally world to write down prices. I've heard they will boot you out if they see you doing this, but we'll see. I gotta buy groceries anyways...i hate grocery shopping!

    My license works like this...I get the stuff packaged from the processor. It is labeled, weighed, etc. I cannot alter that in any way. I can't re-package, can't change the label or whatever.

    I don't do any farmers markets and don't really want too. When I read their rules, it sounds like a bunch of jerks suffering from a bunch of petty political infighting...no thanks! I also don't want to spend a whole day sitting there to sell nothing. I'd rather keep my sales independent. I can take orders when I'm out working or whenever they call. I like that and think it provides good service.

    Jena
     
  11. mysticokra

    mysticokra Well-Known Member

    Messages:
    329
    Joined:
    Feb 5, 2003
    Location:
    Estillfork, Alabama
    One tip I got was to price the meat by the ounce and them compare it to a candybar. It's funny how people think. They perceive the value in their bar of chocolate, but not in their free-range, poision free food by the pound.

    I think it was Proverbs that said, "It is not, it is not.. sayeth the buyer, but then in his heart, he laughs."
     
  12. Ken Scharabok

    Ken Scharabok In Remembrance

    Messages:
    6,844
    Joined:
    May 11, 2002
    "I'm going to wally world to write down prices. I've heard they will boot you out if they see you doing this, but we'll see. I gotta buy groceries anyways...i hate grocery shopping!"

    Put the meat packages in your cart and shop around, not prices discretely and then put the packages back as if you changed your mind. Or do you have a cell phone. Call someone and have them write-down prices as you dictate them. Unless they overhear you, who is to known? "Oh, my goodness Charleen, top round is $2.89 pound. Better get down here. OK, I'll see what else they have..."

    Ken Scharabok
     
  13. vtfarma

    vtfarma Well-Known Member

    Messages:
    988
    Joined:
    May 6, 2003
    Location:
    VT
    Pardon this phrase, but we have found that the people who are referred to as "Tree huggers" here in Vermont - Yuppies, folks with some comfort in their wallets and a set of standards about what their families eat are the people we target. We have gone the small route a few packages of steak or hamburg then they have decided that they need to get a freezer. They also pass our name along to others. We have had many people split orders down to 1/4 or even 1/8! They have to do it on their end - we won't mess with it that small! They usually call to say they really wish they had gotten a half. They want the best for their family, they see our babies out here everyday. They like to buy from us. We have had 4 different customers go buy freezers this year! We actually don't have enough beef to sell for this fall but have sold 2 for next year already to non freezer folks. I think the difference in these people is that they do have a little more in the wallets and will spend a little to get the best meat they can. One thing we have started is offering prospective customers a free chicken, steak, package of burger.

    Pricing wise we do the beef etc at a set price per pound for the larger orders so hamburg and sirloin are all the same price. We charge usually around $2.00 a pound for burger in the #2 packages. Steak is based on what we have been seeing in the stores. More expensive cuts 6 or 7 per pound. People actually just stop by on their way home and get a chicken for the weekend. Chickens were 1.25 per pound whole or $1.50 per pound if I have to cut it up. We are smoking some birds for customers this year. Have not decided on pricing there... probably 3.00 or so. Turkeys were 2.25 per pound and the pork was $1.65 then if the customer wanted stuff smoked it was .65 cents more per pound of smoked meat.

    Hope this helps. We started by listening to what everyone was paying. Mentioning free freezers we hear about to customers and have even stored an elderly couples purchases in one of our freezers for a month or so.
     
  14. tinknal

    tinknal Well-Known Member Supporter

    Messages:
    17,240
    Joined:
    May 21, 2004
    Location:
    Minnesota
    A friend of mine markets hogs to the Hmong (southeast asians). They come to the farm, kill, scrape and butcher the hogs, (they leave a dang small gutpile), and pay cash. They do an extremely clean job, and they network among themselves, so once you find a customer you will have a hundred. They also like poultry, but want colored stuff. Not sure if most of them will tackle beef or not. Anyway, just wanted to put a marketing option out there, don't know if it would work for you.
     
  15. Maura

    Maura Well-Known Member Supporter

    Messages:
    15,981
    Joined:
    Jun 6, 2004
    Location:
    Michigan's thumb
    Could you work up a price per pound you would expect to get for each cut of meat (or each group of meat). Then, price a package deal. Say, two of this cut, two of this cut, a roast, a couple pounds of sausage, and so many pounds of hamburger. This package would almost fill a tiny freezer, half fill a large freezer (I mean on top of the frig type). Your second package would include either a group of different meats, or more of the better cuts plus more burger. This could half fill a large upper freezer unit or more, however this works out. Your third package would be about 1/8 of the animal, your next package would be 1/4. People can see they save a little money by purchasing a package instead of two steaks, while seeing how much room it actually takes up in the freezer. You basicly show them how much two T-bones cost, versus the package deal.

    I wonder if you could also have the hamburger made into patties and sell them to restuarants. They could be put into 1/4 pound or 1/3 pound or 1/2 pound patties. If you are going to do hamburger patties, you could even offer plain burger, as well as more of a meatloaf blend, or other blend, even according to that chef's recipe.
     
  16. Mike in Ohio

    Mike in Ohio Well-Known Member

    Messages:
    3,143
    Joined:
    Oct 29, 2002
    Jena,

    Your visitor didn't have any ideas? Let me put my thinking cap on.......

    If you are selling by the cut, you don't have to make a large profit margin on each type of cut. Everything you sell helps against your expenses. Some cuts you may sell at breakeven or even at a slight loss. The really special cuts will help you make your overall targets.

    You might want to speak with whoever sells freezers in the area. Make up a flyer that they can give as a special incentive to customers. This creates greater perceived value for the appliance seller and helps you get new customers

    Can you sell the cuts you have too much of to local restaurants?

    I'll have to ponder a bit. I'm still too tuckered out from my weekend jaunt (!400 miles).

    Mike
     
  17. Ross

    Ross Moderator Staff Member Supporter

    Messages:
    13,084
    Joined:
    May 9, 2002
    Location:
    Ontario
    "I don't do any farmers markets and don't really want too. When I read their rules, it sounds like a bunch of jerks suffering from a bunch of petty political infighting...no thanks!" :haha: Well yes there are a few around here like that too! I must say ours is run quite a bit friendlier than that!! Of coarse it helps if you're on the board to help run things too...... I will add that food sales are a steady trade at farmers markets, second would be plant sales, then it hits the arts and crafts to duke it out for the nickles. Yeah one day a gold mine the next the shaft for those poor folks. I'm trying to graph our markets sales over 2 or 3 years so they can at least target the higher market weeks! Selling beef you wouldn't be sitting around all day not selling, There would be days when sitting would be appreciated at most markets! I have handed out hundreds of cards and maybe sold a tiny bit more as orders off the farm, not counting the ethnic sales that never buy at teh market. I would sell more to our walk in trade if they knew they could. Like I said I have to get a workable system that won't interfere with our other business.
     
  18. cloverfarm

    cloverfarm Well-Known Member

    Messages:
    717
    Joined:
    May 31, 2004
    Location:
    Michiana
    Still ruminating ...

    If one is hte first person in the area to direct-sell beef, then, there-s no sense of *this is how its done around here.* So you can be the trend setter, if you want to sell individual cuts by the pound, or sell the animal.

    Is there a college nearby? I used to read a different poultry board (like this one better BTW) that said the college-town folks are some of the ones to target.

    In this area, selling halves and quarters at a general price-per-pound is what everyone (including DH-s folks, who got this all started years ago) has always done.Except for the farmers market, which has two meat vendors. One of the vendors goes to the same church as the small local grocery so they sell by the pound there at the store.

    One of the things people here like about picking up their meat at the local packer is that they can get it customized. If they want all patties, OK, if htey want all bulk hamburger, OK, if they want five steaks to a package or steaks 2 inches thick, or filet mignon + New York strip instead of T-bones, it can all be arranged. One guy even got a kick out of seeing his name on all the packages. And one of the Hispanic families loved getting ahold of the steer heads for a special barbecue. I dont think they can do that anymore, though. Anyway ...

    I am optimistic that over time, more and more people will want to buy more of their food locally. Hope so anyway!

    Ann
     
  19. Jena

    Jena Well-Known Member

    Messages:
    2,490
    Joined:
    Aug 13, 2003
    I thought of that too. Make like an "A" list that inlcudes all the steaks..."B" list...and so on. Then make a package where they can choose so many pounds from each list for a set price. I could maybe do pork the same way too, so they can mix and match the beef and pork to get what they want.

    I was thinking of a smaller package...30 pounds to start, then up from there.

    Jena
     
  20. Jena

    Jena Well-Known Member

    Messages:
    2,490
    Joined:
    Aug 13, 2003
    I went to wally world and forgot to bring a pen...yeah I know...

    I can go back tomorrow.

    From what I saw thought steaks are going around $7.50-$8.50 a pound. I had been figuring on about $8.99 so if anything I'm a bit low.

    Roasts were $4-5...which again was about right where I was thinking. I didn't even see any chuck roasts to see what they were, but then they are always out of everything on sunday afternoon!

    I'm going to check Kroger's tomorrow too. They have higher quality meat and are always higher in prices.

    Ross....maybe I ought to give the farmer's market a try. The way their rules were though...it put me off right off the bat! You can tell when folks are writing rules based on problems (but maybe they solved them with the rules!) The nearest one that is large enough to really warrant the trip is about 1 1/2 hours away. I guess I can always quit if it doesn't work out. I also have to find out the regs on taking meat. I have freezers, I have a trailer, I have a genny, so I think I'd be ok, but I have to check on it all.

    We do have a very small, very informal market here. People just plop down at the square with a table. I don't even know who to contact about going, but I suppose I ought to go plop down and at least hand out cards.

    Jena