Show Me the Money!

May 17, 2018

A few days ago a customer asked if I could write about how we price our products.  Since we're all about transparency, and I'm always on board with not coming up with blog ideas myself, this week's #whatswithWednesday is all about how we decide what to charge you.

 

The process for pricing beef and lamb is roughly the same.  I start with the cost of production, factoring in the cost of pasture, fed grain, vet care, breeding, processing, etc.  Then I look at what I would get if I took the same animal to the sale barn auction, rather than having it processed.  This gives me a rough estimate of what the whole animal is worth, either live or hanging.  Hanging refers to the weight/value of the carcass after it's been slaughtered, cleaned, and hung, but before it's divided in to the cuts you buy from us.

 

Then I look at the price of processing.  There's a base price for slaughter, inspection, and cutting.  Anything more processed gets charged at a higher rate, like smoking, sticks, etc. I also consider things like the mileage to the locker.  

 

Next I shop around to see what the closest comparable product costs, both locally and at specialty grocers in larger towns.  I can tell you we're actually not much at all above Wal-Mart or Fareway, and we're substantially less expensive than the co-op or a store like Trader Joe's.

 

Then I take what it costs me to produce an animal and figure my break even by pound, which is complicated by the fact that you lose approximately 40% of your animal between live and hanging, and another 40% between hanging and the freezer, depending on what cuts you order.  The last step is straight supply and demand. For each steer we butcher we get a LOT of hamburger, but not a lot of steak.  Lambs still take a lot of work, but yield a lot less meat, which is why the price is higher. 

 

We also get a lot of questions about why wholesale pricing is lower.  Our wholesale customers (restaurants, food hubs, etc) generally pre-order and tend to take much larger amounts at a time than an individual customer will.  This means I spend a lot less money and time marketing to them and have pretty regular guaranteed sales.  This gives us the stability to be more flexible with our market sales.  

 

I hope this helps make sense of what can really be a pretty confusing process.  We changed processors over the winter as well, which is why you may have noticed changes in some of our prices.  We switched from a state inspected locker to a federally inspected locker because it helps us be able to sell to more customers as we can sell to federally funded institutions and across state lines.  

Please reload

Featured Posts

I'm busy working on my blog posts. Watch this space!

Please reload

Recent Posts

July 9, 2018

June 27, 2018

May 17, 2018

May 14, 2018

April 30, 2018

January 4, 2018

January 3, 2018

December 6, 2017

Please reload

Archive