Financials of Pasture-Raised Meats

I forgot to write about this last week.  I like to start the winter by bringing to light the financials behind pasture raised, artisan meats.  Eating a healthy, all natural diet isn’t easy nor cheap.  It is my goal to work intelligently with my producers to get you the most bang for your buck.

Over the winter, because we’ll feature more meats, I’ll spend some time educating you on meat production and the distribution challenges associated with locally raised meats.  By subscribing to Fresh Fork, I think it is pretty safe to say that you believe in changing our industrial food-system and that you are voting for change through your purchases.

This week I’ve provided everyone with the same cuts.  In the future, you may get a choice because it is not possible to get enough of any one cut without wasting a significant part of the animal.  In this article, I’ll touch on processing and costs by telling a story.

One of the biggest challengs I have with selling to restaurants is their demand for specific cuts and specific sizing.  This expectation has been created and catered to by large meat packers, most notably IBP (Idaho Beef Packers).  IBP specializes in servicing restaurants and grocers.  For example,  they can order 75, 14 oz ribeyes each week, each with a ¾ inch cap on them (fat cap/trim).

Last year I had a restaurant ask me for 75, 14 oz grassfed ribeyes each week.  They were willing to make a “commitment” to purchasing them every week.  Sounds like a great deal right? I quickly said no.  I’ve been down that path befoore.  Each cow has two sets of ribs, the ribeye is cut from rib 2 to rib 12.  So in total you can get 20 ribeyes per animal.  However, to get that specific size of 14 oz with a specific cap, you may only get a dozen.  Why? The “rib-roll” is thicker at one end and thinner at the other end.

So for me to get 75, 14 oz ribeyes per week, I’d have to harvest about 7 cattle.  A cow walks into the processor around 1,200 lbs.  It then hangs at about 750 lbs.  You end up getting about 550 lbs of usable meat.  So for me to sell from each cow 12, 14 oz ribeyes, I’d have 540 lbs of meat left.  Multiply that by 7 and and you see that I’d be sitting on two tons of beef to sell 75 steaks.

Add to that equation that a grass-fed beef cow takes 30 months to raise.  A confined animal feeding operation (CAFO) can finish a beef cow out on grains in 14 to 16 months.

You can see in that example that even without punching the numbers…a local, pasture raised beef cow is going to cost a bit more.

Same goes for hogs.  Last week we featuring pasture raised, organic Berkshire pork.  My cost to produce that hog was about twice the price that you can buy a commodity pork shoulder for in the grocery store.

Berkshire hogs are prized for their good inter-muscular marbeling.  However, they are leaner overal (less bacon) and slower growing.  This doesn’t make them a good “commercial” hog.  Instead, they are a heritage breed raised by small scale producers.  You won’t find Berkshire pork in the grocery store.

Last week’s Berkshire pork was raised in Chardon, OH and a small dairy farm in Holmes County, OH.  I was able to work with the producers on the feed program, the breeding program, etc, to ensure him a fair market price and me a price I can resell.  Still, the price per lb on Berkshire hogs is around $2.50 per lb hanging weight…that’s the weight of the carcass before it is cut and trimmed.  That price is down by about $0.50 per lb over last year because we were able to get a much better price on “feeder pigs” this year.

After the animal is hanging, there is about 30% loss to bone and fat.  Then you must pay $0.60 lb to have the meat cut and packed, and up to an additional $1 per lb for sausage and smoking.

Overall, the cost of the finished meat product is around $4.50 per lb.  Commodity feeder hogs (99% of all pork) are going for $0.71 per lb right now, so the packaged price is around $1.80 per lb.

Why do I bring this all up?  When I first learned what I was up against I was astonished.  I want to pass this knowledge to you and thank you for being willing to vote for change with your dollars and to be flexible in accepting the cuts I offer you and how I must “bundle” the products to move the inventory in an affordable manner. Thank you again.  Over the winter I’ll describe more about the processes for raising your food.

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