Retail Beef prices

[grassfarmer]

Further to my post on retail beef price and packer/retailer profiteering yesterday I got this info from canfax.
"Retail prices for beef in 2007 were higher.... overall the average retail beef price was $12.00/kg. Compared to 1999 the average retail beef price was $3.57/kg or 42% higher in 2007. Higher beef prices at the retail level is good news, as it means that consumers are demanding beef products and are willing to pay higher prices for them."

I would highlight the comment "Higher beef prices at the retail level is good news" it begs the question good for whom?? clearly it has not been good for the cow/calf producer, feedlot operator or consumer. Are we getting 42% more for our cattle than in 1999?

[charliep]

An interesting program. A third party program (not buyer or seller) and not government supported.

Alberta crop insurance has a somewhat similar program with the spring price endorsement. AFSC has also looked at using contract prices over time versus the current coverage price process based on forecasts. A combination of the two could provide this type of coverage. The coverage risk could be covered by calls for commodities that have futures backing them and weather based processes for those that do not.

[farmers_son]

There is a spreadsheet you can access at:

http://www.ers.usda.gov/Data/meatpricespreads/Data/beef.xls

It is U.S. information and the numbers would be quite a bit different in Canada. Apparently the price of beef rose 24% from 2002-2007 and in the U.S. the farm gate portion of retail meat sales actually rose from 43% to 47%.

[grassfarmer]

Those figures don't make any sense to me. I know our own fat cattle that we sell for beef average about 1175 lbs (straight out of the field) They yield 660lb carcases and the customers take home about 440lbs of beef per animal. If these 440lbs (200kgs) sold for $12 per kg it would bring $2400. If I were to receive 47% of this retail price at the farm gate it would equate to $1128 for my steers. Assuming a 4% shrink off their field weight that would mean the packer paying me $1.00 for my fats.

[farmers_son]

I would presume that retail beef prices are higher in Canada than in the U.S.

There is some information at this link that suggests wholesale beef prices are comparable between the U.S. and Canada:

http://www.georgemorris.org/User/Doc/CBBRMarch%2026%202007.pdf