Why Direct Market Meat
Keith Vander Velde
UW Extension Livestock Specialist Marquette County
February 25, 2010---Mauston
Why Direct Market Meat
Options:
• Sell at Auction
• Direct to Packer
• Market To Consumer
Why Direct Market Meat
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Sell at Auction:
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Advantage:
Paid day of auction
 Sell on live weight basis
 Little time in transaction
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Disadvantage
Price Set by Buyers
Yardage and Sales Cost
No buyer loyalty
Today's Prices:1,200 lb steer @$0.92 cents per lb.
$1,l04 -$25(sales expense)= $1,079
Why Direct Market Meat
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Selling Direct to Packer(Selling on the Grid)
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Advantage:
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Price is usually based on carcass weight
Price is usually based on set price for each carcass grade
Can build packer relationships with high grading cattle
Premiums paid for high choice and prime cattle
Premiums paid for yield grade 1&2 cattle
Disadvantage:
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Poor grading cattle sell at discount
Discounts on yield grade 4’s and 5’s
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Payment usually 3 days from delivery day
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1,200 lbs live @ 62 dressing %=744 lbs x
$1.49=$1,108
Why Direct Market Meat
Selling Direct to Consumer
Advantages:
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You set the price (Market plus)
Method to capture special production methods
 Organic
 Natural
 Hormone Free
 Anti-biotic Free
 Home raised source identified
Why Direct Market Meat
Selling Direct to Consumer
Disadvantages:
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You Must Sell the entire animal as meat
Few clients want the whole animal
Must sell as halves, quarter, bundles
A steer is not all “Steak”
Must schedule with local processor for harvest date
You are responsible for collecting from clients
If Dissatisfied with product client may want refund
Unhappy can disrupt future sales
744 carcass weight @ $.175=$1,302
Why Direct Market
Lets Compare:
Auction= $1,079
Grid= $1,108
Direct Market: $1,302 a $200-$223 Premium
Why Direct Market
Pricing Example
Steer: 1,200 pounds live weight
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Yield at 62% provides 744 lbs of carcass
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Yield will range from 56-65% Dressing Percent
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Higher for Beef Breeds
Lower for Dairy and Dairy Crosses
Fatter Cattle have higher dressing %
Pig: 250 pounds live weight
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Yield at 70% provides 175 pounds of carcass
Yield will range from 65-75% Dressing Percent
Sheep: 140 pounds live weight
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Yield at 50% provides 70 lbs of carcass
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Yield will range from 45-55% Dressing Percent
Why Direct Market
Yield Example
Expected
Cutting Yield
Carcass
Weight
Packaged
Meat Weight
Beef
Pork
Lamb
55-68%
65-75%
45-65%
744 lbs
175 lbs
70 lbs
400-500 lbs 114-132 lbs
32-46 lbs
(40% of Live (50% of Live (30% of Live
Weight)
Weight)
Weight)
Why Direct Market
What’s in the Package
Beef
Untrimmed
Cuts
Trimmed
Cuts
Ground Beef
Usable
Product
% Total
Cuts
Sirlion Tip
Round Steaks
Round Roast
Rolled Rump
Round (22%)
164
73
32
105
14
Loin (16%)
119
45
16
61
8
T-Bone
Porterhouse
Sirloin, NY Strips
Tenderloin
Rib(9%)
67
41
13
54
7
Rib Steak & Roast
Ribeyes, Short Ribs
Chuck(27%)
200
82
67
149
20
Chuck & Arm Roast
Chuck Steaks
Flank, Plate
Brisket,
Shank(20%)
148
40
58
98
13
Flank Steak
Brisket, Short Ribs
Soup Bones
Miscellaneous
(6%)
45
7
7
1
Total
744
193
474
63%
281
Why Direct Market
Determining a Price
Beef:
 744 lbs of Carcass at $1.75 (a $.25 premium)
 Processing $275
 $1,302 =(744 x $1.75) + $275 ==$1,577
 474 lbs of saleable meat
 Price per pound received by client=$3.33
Why Direct Market
Determining a Price
Beef:
 $3.33 per lb for the entire combination
 Cheap for Steaks
 High for Hamburger
 Price Sensitive Buyers are not your Clients
Why Direct Market
Finding Clients
Most Likely Buyers Are:
 Wanting Source Identified Meat
 Health Considerations Important
 Organic or Natural
 High Quality
 Consistency
 Accept Variety of Cuts
 Lean Ground Product
 Have Freezers
Why Direct Market
Finding Clients
How to Market in Direct Selling:
Best Method Hanging Carcass Weight paid to you
 Work with Processor to Collect for Processing
 Sell halves or quarters
 Avoid individual wholesale cuts
 Consider Marketing unsold portions to processor if
they have retail outlet for product
Why Direct Market
Keeping Clients
Client Retention and Promotion
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Satisfied Customers Come Back
Satisfied Customers Tell Friends
Know Your Clients Family Size-Estimate Their
Time to Consume Your MeatDo a Follow-up phone call one month after the
client picks up the meat-learn about their
satisfaction level
Why Direct Market
Keeping Clients
Client Retention and Promotion
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Dissatisfied Customers Are Hard to Get Back
Dissatisfied Customers Tell Everyone
Without Follow-up With Clients They Feel You
Are Not Interested in how they feel about the
meatConsider some method to win customers back (ie
Refund, Discounts)
Why Direct Market
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Have Time to Market
Start Small
Develop a Market
Have Good Product
Make Product Special
Take Some Risks
Place Premiums on
Product