Hamburger

[cowman]

Two ads in the local paper for lean hamburger. Both farms named and saying home raised beef, no antibiotics, no hormones. The one guy is selling 1 lb. packages, minimum 10 packages...$2.25/lb. Delivered!
So on a 1300 lb. cow I figure about 400 lb. meat(might be high?) or $900? Both stated govt. inspected and wrapped. If we figure the cost of cutting, grinding and wrapping at $400-500 then he is getting $400-500 for his cow? Is the extra money worth the hassle?

[laxdal]

We sold hamburger in early January for $1.50 lb (Safway had a sale on for $1.49 lb), now I know this was to cheap but even selling farm gate your at the whim of the market place, when we told people we where going to do this it looked like we'd be lucky to get $0.10 lb for these cows at the auction.
We took in 3 cows that averaged 473 lb of hamburger each (we kept the tenderloin), kill, cut and wrap was $464 each ($0.98/lb).
This left us with $245/cow or $0.19/lb live wieght if they were 1300 lb cows which is close to market value right now so definitly not worth the trouble.
People where keen on buying it (the price?), said it was superior to the lean hamburger at the store and wanted more for their friends.
We're going to do this again but we're not sure what to charge yet. At $2.25/lb it would be another $350/lb and worth the trouble.

[ValueChainFX]

Just a small suggestion! If you are looking at a price customer only than as soon as a lower price comes along you no longer have a customer. Since you have farm raised product (and if you have extras ie no additives) you can charge what you believe is fair for you and fair for your customer! We have had many people tell us our prices are to high but we have been gathering a good customer base and the repeat customers no longer tell us the price is to high!

[Cedar]

ValueChainFX:
" We have had many people tell us our prices are to high but we have been gathering a good customer base and the repeat customers no longer tell us the price is to high!"

How have you been gathering this customer base? i.e.: what type of advertising? What factors would you say have contributed to this success? i.e.: what does your product have to offer the customer that others do not? It appears that you have been able to develop repeat customers...this is great....what do you suppose changed their minds about the pricing? What prices do you charge for the various cuts? How do you "deliver" your product? Is it in a store, or delivered directly to the customer, or..??

[ValueChainFX]

We deal with both internal and external customers, our advertising is limited to word of mouth, fliers and personal key contacts.

Our internal customer base comes from the producers we are working with to develop the programs and their customer base. The external customers have worked with us closely to meet their customer or family needs. Our products are mostly "Core" muscle cuts and stews, grinds and stir fry’s with all sinew removed. We have a good cross section (by choice) of family customers, caterers, restaurants and lodges. The price structure has developed through first matching retail prices and moving beyond them to our present price through cutting tests and production costs. Although we have grown quickly we are careful not to compromise our quality assurance for the sake of more production. Our shop is small and set up for fabrication and we are preparing to go out into partnerships for more value added product. Oven and microwave ready. The customers we have now have been our best sales people as they share the eating experience with people in their own sphere of influence. We will be opening another separate room this month to carry frozen product mostly variety packs, patties etc. Our challenge is still kill spots but so far we have managed to work with what we have and keep our customers well informed. Price is not a barrier at this point now that we are past the initial "sticker shock" and they have seen and tasted the value! Most people pick up at the shop, but we have delivered as well.

[laxdal]

Yes people were impressed with the product it was leaner than the store "lean ground beef" and they felt good about where it was coming from and knowing what went into it. About a third of them asked about other cuts (the spare 4-H steer is called for).
I think we could move the rest of the culls this way at something closer to $2.00/lb and there is a pen of hiefers I wish I had sold in Nov. that perhaps could be sold farm gate. But it would have to be at a premium to pay for the hassel with the hiefers, in the past being a middle man between the city folk and the locker plant has been stressfull ( "I want my 1/4 in sirloins please" ).
Would be nice to have some of Safeways money in our pocket!

[ValueChainFX]

laxdal understand your position and empathize with you for sure. At a recent meeting on trace back some of the larger retails were there and the meeting after the meeting was very open as far as how much support a system that did the trace back and worked with primary producer participation would have.

Some of the challenges we have is the ability to coordinate a continuous flow of product on a consistent basis. We have been asked to provide elk and bison for a market back east! The specifications for the product are very hard to handle at the moment and the supply (although lots around) needed to provide a specific type of product throughout the year! I believe we can compromise here to some extent, but whatever plan has to meet the retail needs (customer needs) and put more money in the producers' jeans!

The retails (In Canada)by the way are very interested in the trace back trace forward programs!