A grey day in the Skagit Valley.
A couple months ago, I received an e-mail from one of our pork customers asking if they could reserve a quarter beef, and if so, what would the price be. I told them it would be $3.50/lb based on hanging weight, and they got back to me with every farmer's dream: "You should charge more. You're too cheap compared to other farms in the area." I told them that I would put some research and thought into it, and try to sum it all up in a blog post. This is that post.
Last year, we charged $1.75/lb for beef, based on the fact that we'd never raised beef before and we we weren't sure of the quality for a relatively young steer (about 13 months old). The quality turned out to be excellent for our tastes: very tender, flavorful meat, and lean, but not so lean that there was no flavor. We weren't producing marbled, corn fed steaks, but we were producing healthy, tasty meat. Compared to the richness of our pork, this was a good companion. Plus, Jen was raised on ground turkey and likes lean, ground meat.
We want raising beef to be an important aspect of our business, but not a dominant one. Most of our effort should go into our core, which is raising pork. Raising a few steers makes sense because the pigs don't eat all the pasture. A good ratio might be one steer for every sow. To that end, I don't expect we will ever develop a breeding herd of cattle--it's easier for us just to buy young bulls and raise them on our lush pastures.
And our pastures are really good. The goal of grass fed beef is to make sure your animals are getting an abundance of calories right before slaughter. For us, it makes sense then to only slaughter in the fall--that way they fatten on the fall pastures and it saves us from feeding costly hay over the winter. I'm still not sure what the ideal timing is: to buy young bulls in spring or fall or to buy slightly older bulls in the fall, but either way, we will likely be keeping them on the farm one winter and slaughtering the following fall.
Therefore, I'm confident we can produce high quality, lean grass-fed beef. If the quality there, the price I want to charge then depends on the cost of production. Here's a link to the spreadsheet I'm using to do the math:
Last year, we charged $1.75/lb for beef, based on the fact that we'd never raised beef before and we we weren't sure of the quality for a relatively young steer (about 13 months old). The quality turned out to be excellent for our tastes: very tender, flavorful meat, and lean, but not so lean that there was no flavor. We weren't producing marbled, corn fed steaks, but we were producing healthy, tasty meat. Compared to the richness of our pork, this was a good companion. Plus, Jen was raised on ground turkey and likes lean, ground meat.
We want raising beef to be an important aspect of our business, but not a dominant one. Most of our effort should go into our core, which is raising pork. Raising a few steers makes sense because the pigs don't eat all the pasture. A good ratio might be one steer for every sow. To that end, I don't expect we will ever develop a breeding herd of cattle--it's easier for us just to buy young bulls and raise them on our lush pastures.
And our pastures are really good. The goal of grass fed beef is to make sure your animals are getting an abundance of calories right before slaughter. For us, it makes sense then to only slaughter in the fall--that way they fatten on the fall pastures and it saves us from feeding costly hay over the winter. I'm still not sure what the ideal timing is: to buy young bulls in spring or fall or to buy slightly older bulls in the fall, but either way, we will likely be keeping them on the farm one winter and slaughtering the following fall.
Therefore, I'm confident we can produce high quality, lean grass-fed beef. If the quality there, the price I want to charge then depends on the cost of production. Here's a link to the spreadsheet I'm using to do the math:
| steerplan.xlsx |
The summary of the plan is this: I have two scenarios I'm modeling: buying 4-5 month old steers in the fall, or buying day-week old bull calves in the fall. Both are similar in terms of the price I need to charge: about $4/lb. I'll discuss the 5 month old steer scenario from here on out: I buy at $450, I spend $200 on hay over the winter, I add $855 of labor (at $15/hour), I estimate 1.5 acres of land needed per steer, which at my current rental rate is $150. I add in $171 for miscellaneous costs, and $188 for profit to get to a price of $2069. I'm estimating a hanging weight of 525 lbs to get to $4/lb. If I perform the labor, I make about $1048 per animal. The acquisition cost is variable, and I may not get the deal I got this year again. The labor cost is large, and it reflects that I'm estimating in my rotational grazing scheme I'd need to move them twice a week, taking an hour each time--in line with my experience thus far. The other aspect of the labor is feeding hay, replacing bedding, and handling manure in the winter.
This seems like a reasonable plan to me, and $4/lb is indeed higher than what I quoted our customer to begin with, but it's still $.50 less than what she suggested I charge. Perhaps after another year or two of data I'll find that I do need to raise prices, but for now, this seems fair, and pays me a fair wage for my labor.
This seems like a reasonable plan to me, and $4/lb is indeed higher than what I quoted our customer to begin with, but it's still $.50 less than what she suggested I charge. Perhaps after another year or two of data I'll find that I do need to raise prices, but for now, this seems fair, and pays me a fair wage for my labor.
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