Why Direct Market Meat Keith Vander Velde UW Extension Livestock Specialist Marquette County February 25, Mauston

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

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 cents per lb. $1,l04 -$25(sales expense)= $1,079

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 62 dressing %=744 lbs x $1.49=$1,108

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

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 $.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 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

Why Direct Market Yield Example BeefPorkLamb Expected Cutting Yield 55-68%65-75%45-65% Carcass Weight 744 lbs175 lbs70 lbs Packaged Meat Weight lbs lbs32-46 lbs ( 40% of Live Weight ) (50% of Live Weight) (30% of Live Weight)

Why Direct Market What’s in the Package Beef Untrimmed Cuts Trimmed Cuts Ground BeefUsable Product % TotalCuts Round (22%) Sirlion Tip Round Steaks Round Roast Rolled Rump Loin (16%) T-Bone Porterhouse Sirloin, NY Strips Tenderloin Rib(9%) Rib Steak & Roast Ribeyes, Short Ribs Chuck(27%) Chuck & Arm Roast Chuck Steaks Flank, Plate Brisket, Shank(20%) Flank Steak Brisket, Short Ribs Soup Bones Miscellaneous (6%) Total %

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, 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 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

Why Direct Market Keeping 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)

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