The price of BEEF!
There has been a lot in the news lately about the price of beef. I wanted to clear up a few things so that you the consumer can hopefully have more information to make an informed decision.
First I am only speaking for our operation and not in general.
In our operation Carey Ranch sells most all of its calves in the fall in either private sales to backgrounders/ feeders or on video auction. The cattle leave here at around 650lbs and make their way through the supply chain usually on grass then to a feedlot to finish, then processed for retail at around 1600lbs. This process takes close to two years, around twenty months. So almost two years from birth to harvest to grow a steak. We don't have any control of price when we sell this way, the market sets the price. Right now it is high because of low supply and big demand. More years than not we have been on the other side of this market, trying to break even. The only control we have at this point is to hold on to them and hope the market goes up. Cattle are a live commodity, so the longer we hold them the more we spend in feed. It’s a gamble. Will the extra cost of feed pay out in pounds gained, or should we have taken the price and saved the feed. Any way you slice it the market sets the price, and like I said it’s gamble.
In 2020 we kept some cattle back to finish and sell direct to consumer. After covid we realized how bad the supply chain was, and wanted to be able to supply folks especially local folks with beef if and when grocery store shelf were empty again. We were also very frustrated with the confusion in beef labeling. We should not be importing beef and labeling it Product of the USA.
So Circle Bar Beef was started. We do have some control over the prices in this direct to consumer situation. Although it still runs off the basic principle of supply and demand. The reason why direct to consumer beef is higher than what you find at the store is because our cost is higher. One of our biggest expense is processing. Small USDA processors can't kill and cut for the same price as Tyson, or JBS, they aren't doing the volume. Small USDA processors are also hard to come by. We use a great one, but it is a 8 hours round trip to drop cattle off and pick up beef.
All in with just the cost of the animal, feed, and processing, our break even cost is $9.50 per pound. That is not even factoring in fuel, labor, and all the other small things like website, shipping ect.
This is different for everyone selling direct. Our break even cost has gone up from when we first started because the price of cattle have gone up. We have to factor in the price of the animal because Circle Bar Beef has to pay Carey Ranch market price for it. Even if producers don't have that caveat in their operations they should still be adding in the cost of the animal into their break even price, so they know if it’s worth finishing or selling at five hundred pounds.
So why do consumers buy direct when beef is less expensive in the grocery store? Because they want to support local independent producers. They like to know where their beef comes form and who is raising it. They enjoy the quality, and to them it is worth the price. This is not to disparage anyone who wants to get a better deal. I have raised a family and know sometimes you just need to find the best deal, and there is nothing wrong with that. That is why it is nice to have some choice. You can buy great beef at the meat counter, and there are great people all over the US raising it, us included. US beef is the best in the world, that is what drives demand, and why it should be labeled as such.
I do think that as a whole Americans have gotten comfortable with low cost food. On average a pound of ground beef at the store is $6.50 per pound. That has caused folks to scream about price. Many of these same folks don't think twice about picking up a $6 latte. That latte didn't take two years to grow, and won't make a nutritious meal for two. So I think some perspective might be in order. If ground beef gets down to $3 or $4 bucks a pound again more US producers will go out of business. Folks like to talk about sustainability, that is not sustainable.
Despite the higher cost of cattle and our break even cost rising, I have tried to keep our prices reasonable, and still make it worth doing. My margin has shrunk because I haven’t wanted to pass the entire rise in cost on to you. It is a balancing act!
There are still some great deals to be found buying direct. We offer stock up bundles with a great variety that cheapen the per pound cost by a great deal compared to buying by the cut. We are also working on some beef quarters and eights that will drop the price even further. Less popular cuts are also a great way to save. There are some delicious recipes for roast, ribs, brisket, and some of these less expensive cuts that will feed your family more than one meal.
If you have the freezer space there are producers that do great deals on wholes and halves. There are choices and options for everyones budget. Beef is so good for you it is worth the investment in good health, and US beef is an investment in food security for our nation.
I got down in the weeds a little on the subject, and I'm sorry for that, but I hope this clears up some confusion on the cost of beef, it is confusing. If you have any questions don't hesitate to contact me, I am happy to try to answer them.