Beginner Farmer Meat Marketing Analysis & Strategies
Market Channels & Pricing
Part 4
This presentation template was developed by NC Choices and project partners to be shared in full for educational purposes. NC
Choices, funders, and project partners are not responsible for content selected or adapted outside of the original slide deck
presentation. The project is supported by the Beginning Farmer and Rancher Development Program competitive grant no. 2018-
70017-28550 of the USDA National Institute of Food and Agriculture.
Beginner Farmer Resources
Profitable Meat Marketing
In this section
•
Identify the farm’s desired profit per head.
•
Determine the pricing needed to reach the goal, in each channel.
•
Determine which channels are viable based on pricing.
•
Learn how price can be used to aid inventory management.
Average NY Freezer Trade prices on
MeatSuite.com
:
▪
Beef: $4.10 HCW (104 farms)(1/4)
▪
Pork: $3.89 HCW (70)(1/2)
▪
Chicken: $4.13/lb. (51)(whole)
▪
Lamb: $7.64 HCW (34)(whole)
Observations of pricing in the market:
Freezer Trade
Prices include processing. Observed Dec. 2017
Prices observed Oct. 2017, Tompkins Co. NY
Observations of pricing in the market:
Farmers Market
What are the farm’s financial goals?
How much do we need to
Gross
?
How much do we wish to retain as
Profit
?
Per Head
Per Year
Per Species
How many head do we need to market to reach annual goals?
Can use this to create monthly sales projections and write
specific objectives!
Channels for Meat Sales
By the carcass
By the cut
Commodity
Small/regional brand
Co-op brand
Freezer trade
Retail stores
Restaurants
Institutions
Farmers’ Markets
Farm Store (own)
Meat CSA
Retail stores
Restaurants
Institutions
Channels with high prices come with greater demands
More time.
More skill.
More cost.
Each Channel has different costs.
Each cut comes in a proportion.
Each cut has a level of demand.
Therefore, we need unique pricing for each channel.
In fact, why expect different levels
of profit in different channels?
We can create a scenario where profit/head is
fixed and the cost of marketing is the variable.
Each step has opportunity.
Each business must profit.
What is my break-even cost of production?
How much profit would I like my
PRODUCTION business to make on 1 head?
Calculator Prep 1:
Production
Example:
$1300/head
$
100/head
What is the value of time I invest selling?
How much profit would I like on 1 head?
Example:
$
600/head
$500/head
Calculator Prep 2:
Processing &
Marketing
5 markets, 8 hours each, $15/hour = $600
That means selling ≈ 80 lbs per market.
Go to Calculator
http://calculator.meatsuite.com/
•
To ensure a profit.
•
To test & adjust current market channels.
•
To account for labor & costs.
•
To manage inventory of cuts.
•
To evaluate and price for new opportunity.
•
To aid wholesale buyers.
•
To develop channel-specific pricing that works!
What’s the point?
What does it mean if you develop pricing but
determine that your customers in that
channel “would never pay those prices?”
What’s the point?
Target Market identification
Marketing Strategy
Market Research = Pull Marketing
Marketing Budget
Consumer Communication
Time
The difference between $4 & $8
ground beef?
Applied Marketing
Management
Good bull genetics
Body Condition Score
Castrated
Weaned
Started on-feed
Vaccinated & boostered
Factors influencing feeder calf
prices at auction:
Applied Production
Management
•
Prepare in advance.
•
Set aside the time.
•
Estimate COP.
•
Decide Production
Profit/head.
•
Estimate Marketing Time.
For Successful Use:
•
1 head data (or AVG).
•
Weigh all cuts.
•
Processing invoice.
•
Trucking time & $.
•
Current channel prices.
Title slide
Explore pricing strategies, market channels, and financial goals for beginner farmers in profitable meat marketing. Learn to identify desired profit, determine pricing per channel, and select viable sales avenues. Analyze market observations and plan sales projections for different meat types. Discover various sales channels for meat, including carcass sales, retail stores, restaurants, and farmer's markets, among others.
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Presentation Transcript
Beginner Farmer Resources Profitable Meat Marketing Market Channels & Pricing Part 4 This presentation template was developed by NC Choices and project partners to be shared in full for educational purposes. NC Choices, funders, and project partners are not responsible for content selected or adapted outside of the original slide deck presentation. The project is supported by the Beginning Farmer and Rancher Development Program competitive grant no. 2018- 70017-28550 of the USDA National Institute of Food and Agriculture.
Beginner Farmer Resources In this section Identify the farm s desired profit per head. Determine the pricing needed to reach the goal, in each channel. Determine which channels are viable based on pricing. Learn how price can be used to aid inventory management.
Beginner Farmer Resources Observations of pricing in the market: Freezer Trade Average NY Freezer Trade prices on MeatSuite.com: Beef: $4.10 HCW (104 farms)(1/4) Pork: $3.89 HCW (70)(1/2) Chicken: $4.13/lb. (51)(whole) Lamb: $7.64 HCW (34)(whole) Prices include processing. Observed Dec. 2017
Beginner Farmer Resources Observations of pricing in the market: Farmers Market Cut Name Cut Name Farmers Market Farmers Market Avg. Avg. $5.79 (n=6) Wegmans (FYFGA*) Wegmans (FYFGA*) Ground Beef $5.99* Strip Steak $13.43 (n=7) $19.19* Eye Round Roast $7.25 (n=3) $3.69 Sirloin Steak $10.21 (n=7) $14.99* Short Ribs $5.05 (n=5) $7.29 Chuck Roast $6.75 (n=5) $11.49* Prices observed Oct. 2017, Tompkins Co. NY
Beginner Farmer Resources What are the farm s financial goals? Per Year Per Species Per Head How much do we need to Gross Gross? How much do we wish to retain as Profit Profit? How many head do we need to market to reach annual goals? Can use this to create monthly sales projections and write specific objectives!
Beginner Farmer Resources Channels for Meat Sales By the carcass Commodity Small/regional brand Co-op brand Retail stores Restaurants By the cut Farmers Markets Farm Store (own) Meat CSA Retail stores Restaurants Institutions Freezer trade Institutions
Beginner Farmer Resources Channels with high prices come with greater demands More time. More skill. More cost.
Beginner Farmer Resources Each Channel has different costs. Each cut comes in a proportion. Each cut has a level of demand. Therefore, we need unique pricing for each channel.
Beginner Farmer Resources In fact, why expect different levels of profit in different channels?
Beginner Farmer Resources We can create a scenario where profit/head is fixed and the cost of marketing is the variable.
Beginner Farmer Resources Each step has opportunity. Each business must profit.
Beginner Farmer Resources Calculator Prep 1: Production Example: $1300/head What is my break-even cost of production? $100/head How much profit would I like my PRODUCTION business to make on 1 head?
Beginner Farmer Resources Calculator Prep 2: Processing & Marketing Example: $600/head What is the value of time I invest selling? $500/head How much profit would I like on 1 head? 5 markets, 8 hours each, $15/hour = $600 That means selling 80 lbs per market.
Beginner Farmer Resources Go to Calculator http://calculator.meatsuite.com/
Beginner Farmer Resources What s the point? To ensure a profit. To test & adjust current market channels. To account for labor & costs. To manage inventory of cuts. To evaluate and price for new opportunity. To aid wholesale buyers. To develop channel-specific pricing that works!
Beginner Farmer Resources What s the point? What does it mean if you develop pricing but determine that your customers in that channel would never pay those prices?
Beginner Farmer Resources The difference between $4 & $8 ground beef? $8.00/LB Target Market identification Marketing Strategy Market Research = Pull Marketing Applied Marketing Management Marketing Budget Consumer Communication Time $4.00/LB
Beginner Farmer Resources Factors influencing feeder calf prices at auction: $2.00/LB Good bull genetics Body Condition Score Castrated Applied Production Management Weaned Started on-feed Vaccinated & boostered $1.00/LB
Beginner Farmer Resources For Successful Use: Prepare in advance. Set aside the time. Estimate COP. 1 head data (or AVG). Weigh all cuts. Processing invoice. Trucking time & $. Current channel prices. Decide Production Profit/head. Estimate Marketing Time.
