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Why Direct Market Meat Keith Vander Velde UW Extension Livestock Specialist Marquette County

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. Sell at Auction:

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Why Direct Market Meat Keith Vander Velde UW Extension Livestock Specialist Marquette County

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  1. Why Direct Market Meat Keith Vander VeldeUW Extension Livestock Specialist Marquette County February 25, 2010---Mauston

  2. Why Direct Market Meat • Options: • Sell at Auction • Direct to Packer • Market To Consumer

  3. Why Direct Market Meat • Sell at Auction: • Advantage: Disadvantage • Paid day of auction Price Set by Buyers • Sell on live weight basis Yardage and Sales Cost • Little time in transaction No buyer loyalty Today's Prices:1,200 lb steer @$0.92 cents per lb. $1,l04 -$25(sales expense)= $1,079

  4. Why Direct Market Meat • Selling Direct to Packer(Selling on the Grid) • Advantage: • 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: • Poor grading cattle sell at discount • Discounts on yield grade 4’s and 5’s • Payment usually 3 days from delivery day • 1,200 lbs live @ 62 dressing %=744 lbs x $1.49=$1,108

  5. Why Direct Market Meat Selling Direct to Consumer Advantages: • You set the price (Market plus) • Method to capture special production methods • Organic • Natural • Hormone Free • Anti-biotic Free • Home raised source identified

  6. Why Direct Market Meat Selling Direct to Consumer Disadvantages: • 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

  7. Why Direct Market Lets Compare: Auction= $1,079 Grid= $1,108 Direct Market: $1,302 a $200-$223 Premium

  8. Why Direct MarketPricing Example Steer: 1,200 pounds live weight • Yield at 62% provides 744 lbs of carcass • Yield will range from 56-65% Dressing Percent • Higher for Beef Breeds • Lower for Dairy and Dairy Crosses • Fatter Cattle have higher dressing % Pig: 250 pounds live weight • Yield at 70% provides 175 pounds of carcass • Yield will range from 65-75% Dressing Percent Sheep: 140 pounds live weight • Yield at 50% provides 70 lbs of carcass • Yield will range from 45-55% Dressing Percent

  9. Why Direct MarketYield Example

  10. Why Direct MarketWhat’s in the Package

  11. Why Direct MarketDetermining 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

  12. Why Direct MarketDetermining a Price Beef: • $3.33 per lb for the entire combination • Cheap for Steaks • High for Hamburger • Price Sensitive Buyers are not your Clients

  13. Why Direct MarketFinding 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

  14. Why Direct MarketFinding 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

  15. Why Direct MarketKeeping Clients Client Retention and Promotion • Satisfied Customers Come Back • Satisfied Customers Tell Friends • Know Your Clients Family Size-Estimate Their Time to Consume Your Meat- • Do a Follow-up phone call one month after the client picks up the meat-learn about their satisfaction level

  16. Why Direct MarketKeeping Clients Client Retention and Promotion • 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 meat- • Consider some method to win customers back (ie Refund, Discounts)

  17. Have Time to Market Start Small Develop a Market Have Good Product Make Product Special Take Some Risks Place Premiums on Product Why Direct Market

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