# How to sell beef?



## BrokeFarmerJohn (Mar 11, 2016)

Hey everyone,

Can someone explain how to sell beef. I'm new to cattle and have bee raising 3 cattle and now one is ready to butcher, I plan to directly sell the beef. My question is what do I charge? What can I expect in butcher costs ext. 

I have 3 buyers lined up so far that are interested in buying a quarter, but I haven't given a price because idk anything about that process.

The steer i plan to butcher is 50% Jersey, 25% angus, 25% brahman. One steer is 100% Jersey and will be next. Cattle are grass fed, the last month and half have been given unlimited hay and I also gave them pumpkins and cracked corn daily. Age is around 16 months on the two steers, I have a 11 month old bull calf also. 

I need to iron down buyers so I need to get a plan on what to charge and how to sell the beef. Thanks

John


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## Empire (Jan 7, 2016)

Figure out what your costs are and then divide that cost by the hang weight of the animal to come up with your break even point. Then add what you feel is a reasonable price per pound for profit and you have your hang weight per pound price.


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## haypoint (Oct 4, 2006)

No idea what state you live in. In Michigan, it is illegal to sell meat without a license and inspection.
But the easy way around that is to sell your steer to the four buyers, provide the delivery service to slaughter house. Butcher can legally cut up their beef for them. That way you aren't selling meat.
You need to call the butcher and find out what he charges per pound, plus the killing charge. Given the steer's live weight, he may be able to guess the hanging weight. The hanging weight is the steer without head, hide,hooves and guts.
You need to call the local livestock auction and ask the price a steer like yours is selling for. You'll need a good guess of how old it is and what it weighs.

What the auction gets for a steer, plus what the butcher charges to cut it up is a good baseline for the value of your meat. If you think it is special, up that price.

Pumpkins are good if they aren't pooping enough. How much corn and for how many months is important to the beef quality.

The bull will make some nice lean hamburger.

Farming is a capitol intensive business with a razor thin profit margin. Taking your costs and adding a profit to set your price is often wishful thinking. Unless you have convinced buyers that you have a superior product, well above average beef, don't expect anything for a profit.

Last year and much of this year, price of calves was high. Fat cattle and those ready to butcher have dropped in demand/price. Many farmers will not be getting their expenses back this year.

Jersey are the cheapest calves to buy and sell for less per pound than beef breeds.


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## gwithrow (Feb 5, 2005)

Here in our area, western NC, there are a couple of ways folks sell beef

the first way is to finish the animal to the point you are happy with, weight/size wise....then sell quarters, based on live weight..say 3 dollars per pound.....deliver the animal to the processor.....customers pay you for the animal and pay the processor for creating packages of beef....

another way is to finish the animal, take it to the processor....get them to divide it equally into quarters....you pick up the finished product, packed into boxes and you deliver it to the customers at so much per packaged pound....around here from 6-8 dollars per pound.....

However, you must have a meat handlers license to do this..not expensive or too tedious to get this, but if you are going to do method B, then you must have this, and use an inspected facility for processing...

you can also set a price per pound based on hanging weight, which is less of course than live weight, and then let each customer deal with the processing fees and the picking up of the finished product....

I think the going rate for processing around here is 60 cents or so per pound, based on the hanging weight, for the packaging....in vacuum sealed plastic...plus the kill fee.....

once you do this a time or two you will figure out what works best for you and your buyers....right now the profit margin is not as great as it was a year or so ago, but you may make more this way than just selling at the livestock auction...


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## Empire (Jan 7, 2016)

Haypoint, while I agree with most of your post, I don't agree that people shouldn't expect a profit. If you figure costs, and divide that by the hang weight, that's break even point every time. Add something to that number and that's profit. If a person doesn't calculate cost of their time, then a nice profit can be made if costs are kept low. If pasture is available, then most of a steers food can be had without much investment. 
Things like tractors, fence, stock tanks, and other capital improvements are assets and wouldn't be calculated into the costs of the animal. If you derive costs on an animal by animal basis, then profit can be had. If not, why would people farm?


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## Alaska (Jun 16, 2012)

We charge $4.50 per lb hanging weight. The buyer pays the butcher fee $.75 per lb hanging weight. Buyers must be aware that there will be significant weight loss during the butcher process.
example ; hanging weight 500lbs
1/4 125lbs at 4.50 = $562.50 purchase of 1/4
125 lbs at .75 = $93.75 butcher fee (cut wrapped and frozen)
weight after butcher approximately 100 lbs
$200.00 deposit to reserve a 1/4
compare to grass fed products in the store.


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## BrokeFarmerJohn (Mar 11, 2016)

haypoint said:


> No idea what state you live in. In Michigan, it is illegal to sell meat without a license and inspection.
> But the easy way around that is to sell your steer to the four buyers, provide the delivery service to slaughter house. Butcher can legally cut up their beef for them. That way you aren't selling meat.
> You need to call the butcher and find out what he charges per pound, plus the killing charge. Given the steer's live weight, he may be able to guess the hanging weight. The hanging weight is the steer without head, hide,hooves and guts.
> You need to call the local livestock auction and ask the price a steer like yours is selling for. You'll need a good guess of how old it is and what it weighs.
> ...



I had planned to take the steer to the butcher, they kill it ext ext, I pictured each person calling the butcher, telling them how they want there steaks cut ext and they pay the butcher fees and pick up the meat. I don't plan to butcher or actually sell the meat physically but I do want something from each buyer for the meat if that makes sense, just not sure what to charge each customer for my cut. 

I don't want to add up what I have in it and divide to find my break even point because I had to install a lot of fence, buy feeders, waterers, hay, corn, the cattle ext. that's a number I can easily come up with because I kept track of it all but I feel that's not a good measure. I was hoping for a across the board number other people charge for there meat so I'm competitive and get the most out of my cattle I possible can. 

If I broke even with what I have in materials with the 450ft of fencing, gate and all the gear for cows, I will be happy. 

That being said I got the cattle really cheap so hopefully I break even with everything included.

I'm in Ohio, as for the quality of meat, no idea how it's gonna come out, never even touched a cow before I bought one let alone raised one. I went off what research told me.

Most the time I had them they had pasture grass, salt block, fresh water and fly treatments (back rub), I started feeding them corn daily or every other day just in the past 45 days or so. I bought 500lbs of cracked corn and will be out in 2 days, so an average of 11-12lbs of corn a day with unlimited hay. A few weeks before I started to finish them I took all the fly treatments away as per instructions of the insecticide label.


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## BrokeFarmerJohn (Mar 11, 2016)

Alaska said:


> We charge $4.50 per lb hanging weight. The buyer pays the butcher fee $.75 per lb hanging weight. Buyers must be aware that there will be significant weight loss during the butcher process.
> example ; hanging weight 500lbs
> 1/4 125lbs at 4.50 = $562.50 purchase of 1/4
> 125 lbs at .75 = $93.75 butcher fee (cut wrapped and frozen)
> ...



What kind of beef? What breed?


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## BrokeFarmerJohn (Mar 11, 2016)

I just figured it up, with the feeders, waterers, 12ft gate, 500ft of 4-5ft tall chainlink fence on 8ft T-Post 8ft apart with barbed wire 6-8in above the chainlink, 500lb corn, 75 bales of hay, vet, all the fly stuff and buying the cows that total is around $2750 right now, maybe a bit more for something I forgot about to add to my list. I guessed light the two steers are around 700lbs and the bull around 500lbs, I estimate 50% roughly is loss so I would have to get around $2.90 a pound just to break even with the fence and all that stuff being the profit.

Would $3 per pound hanging weight be reasonable to charge plus butcher/kill fees? On all 3 (two steers and bull calf) breed listed above in first post. Or should I charge more? I think all three are about 100lbs more each than my estimate but that's a total guess


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## mustangglp (Jul 7, 2015)

Here they charge 1.10 a pound for processing so that makes your beef 4 dollars a pound including the bones.


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## Gravytrain (Mar 2, 2013)

BrokeFarmerJohn said:


> I just figured it up, with the feeders, waterers, 12ft gate, 500ft of 4-5ft tall chainlink fence on 8ft T-Post 8ft apart with barbed wire 6-8in above the chainlink, 500lb corn, 75 bales of hay, vet, all the fly stuff and buying the cows that total is around $2750 right now, maybe a bit more for something I forgot about to add to my list. I guessed light the two steers are around 700lbs and the bull around 500lbs, I estimate 50% roughly is loss so I would have to get around $2.90 a pound just to break even with the fence and all that stuff being the profit.
> 
> Would $3 per pound hanging weight be reasonable to charge plus butcher/kill fees? On all 3 (two steers and bull calf) breed listed above in first post. Or should I charge more? I think all three are about 100lbs more each than my estimate but that's a total guess


Don't try to get infrastructure paid back the first year...figure that out over say...5 years.

Most guys selling dairy cross freezer beef around here are around $2/lb hw. Most dedicated beef breed sellers are around $3/lb. Guys like me are selling higher grade beef for $3.50, $4.00, or more, but have higher inputs for pasture quality, longer feeding, etc. Some guys will use buzzwords in order to charge more, but usually don't get much return business. 

IMO, the key to succeeding in direct marketing meat is to keep your customers happy and turn them into return customers every year. Some people will be most happy filling their freezers with cheap beef. Others are happy to spend 3 or 4 times as much for quality. Find your spot. Don't try to be all things to all people.


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## haypoint (Oct 4, 2006)

Empire said:


> Haypoint, while I agree with most of your post, I don't agree that people shouldn't expect a profit. If you figure costs, and divide that by the hang weight, that's break even point every time. Add something to that number and that's profit. If a person doesn't calculate cost of their time, then a nice profit can be made if costs are kept low. If pasture is available, then most of a steers food can be had without much investment.
> Things like tractors, fence, stock tanks, and other capital improvements are assets and wouldn't be calculated into the costs of the animal. If you derive costs on an animal by animal basis, then profit can be had. If not, why would people farm?


Good question. I think I mentioned the razor thin margin. We are discussing a half Jersey steer. 
In farming, farmers don&#8217;t have the luxury of adding up all their expenses, adding extra to be their profit and selling on the market. The market sets the price. More specifically, the competitive nature of most agricultural products maintains the supply/demand price threshold at a nudge above the profit/non-profit line. 
Pastures involve an investment in real estate. Often that parcel requires financing that includes interest charges. Many states capture operating costs by levying a tax on land. Even existing fences need repairs.
Things like tractors, fence, stock tanks and most other capital improvements depreciate. These depreciating assets are subtracted from the gross income from the sale of off farm products. In this case it is a half Jersey steer. 
I did mention creating the illusion that this product is rare, unique or otherwise more valuable than common beef could produce a profit. Reference magic beans.
If the calculations, discounting land cost and labor, bring us to an investment of $3.00 a pound hanging weight and he can get it butchered for $1.00 a pound, about 10% ends up as bones and waste fat. So the &#8220;break-even&#8221; point requires the buyers to pay about $4.40 a pound, cut and wrapped.
Hats off to the guy that can sell four quarters of a Jersey for $5.00 a pound and walk off with $175. Profit.
If he took none of his expenses, sold the beef at $3. a pound hanging weight, let the buyers pay the butcher, he could say that he made a profit of a grand.

700 pound Holstein steer at current market price of 70 cents a pound gets you 350 pounds hanging weight at a cost of $1.40 per pound.

http://www.napoleontack.com/marketrpt.htm


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## BrokeFarmerJohn (Mar 11, 2016)

Gravytrain said:


> Don't try to get infrastructure paid back the first year...figure that out over say...5 years.
> 
> 
> 
> ...



It's all just a hobby to me, I started out with one steer, then got a good price on two more, all the chainlink fence was off Craigslist, all the T-Post and other supplies was from rural king and the only reason I did that was because what I had fenced in wasn't enough so I desperately needed to open more pasture, so I bought up used chainlink fence and pounded T-post in by hand 2ft down. 

Who I'm selling to are just friends, I'm not marketing meat in anyway or expanding, was one of those, I have the place to do it, I wanted to do it, had fun doing it and the hobby will pay for itself. 

The money I get from the cows will be money used to buy higher quality cattle next year, and keep friends and family fed while killing some time in the process.

I'm glad to have been thrown some numbers at me to where I stand on what to charge, this year will be 100% experimental to me, I'm happy with the progress I have made getting set up for cattle to this point.


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## BrokeFarmerJohn (Mar 11, 2016)

haypoint said:


> Good question. I think I mentioned the razor thin margin. We are discussing a half Jersey steer.
> In farming, farmers donât have the luxury of adding up all their expenses, adding extra to be their profit and selling on the market. The market sets the price. More specifically, the competitive nature of most agricultural products maintains the supply/demand price threshold at a nudge above the profit/non-profit line.
> Pastures involve an investment in real estate. Often that parcel requires financing that includes interest charges. Many states capture operating costs by levying a tax on land. Even existing fences need repairs.
> Things like tractors, fence, stock tanks and most other capital improvements depreciate. These depreciating assets are subtracted from the gross income from the sale of off farm products. In this case it is a half Jersey steer.
> ...



Crunching the numbers which is what I did also it's not much profit lol, if you add the land and my time, I lost big time not to mention the 05 4320 cab JD I picked up about a month ago so I could feed my cows round bales, there's absolutely no way of making that money back, if it wasn't for the fun of it and wasting some time, there's absolutely no point in working such a small operation, I'm very limited on land also. 

3 cattle was too much for the amount of land I have fenced in. So in that aspect I can never expand, can never really ever gain a larger profit margin, more cattle and I have to buy more hay to substitute the lack of pasture which lowers the profits even more. My only option is to buy higher quality cattle. 

But anyway my market is friends and family, selling point would be knowing where your meat comes from, not using hormones ext ext. so I may get away with charging a bit more than market value. 2-4 cattle a year is absolutely max for me.


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## Alaska (Jun 16, 2012)

BrokeFarmerJohn said:


> What kind of beef? What breed?


 Percentage angus lowlines. We use no hormones or antibiotics no grain/corn.
And we finish with an alfalfa product (chaffhaye).


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## gundog10 (Dec 9, 2014)

Here is my .02 along with my story. We started off last July (2015) with 9 head, 1 jersey, 5 holstein, 3 wagyu/jersey cross and one holstein heifer. Butchered one at a year due to bad rear legs so no profit there but he was mighty tasty. These were all sales barn rejects and cost 350-650 each. This was when Angus steer calves were bringing 1200-1500 a head. I fed them a 5 gallon bucket of grain a day along with a little hay along with all the green grass they could eat ( I have great grass). During the last three months, I increased the grain to 2 five gallon buckets a day. At 18 months my cattle began to fill out and round over their backs. When I felt my first three were ready I placed an add on craigs list and let my family know they were ready for sell. Well, not a single call off craigs list but had two of my daughters friends come over to take a look. My cattle were big, strong, and healthy cattle and it showed. Both bought a steer of their choice of the ones that were ready and paid in cash. Called the slaughter man out for the kill and transport to the butcher shop. I paid the kill fee and they paid for cut and wrap. I charged between $1,100 and $1,200 per head and guaranteed a fresh hanging weight of 500lbs/600lbs respectively. They had friends over to try my beef and within two weeks all my beef were sold. In fact, others have asked since I ran out. I spent $4500 on calves and $3500 on grain and hay. I made right at $ 6,000 on the sale of the beef as two of the beeves went into my daughters and our freezer. Now, I took $3000 of that money and bought 13 steers, 5 angus/holstein cross, one jersey/holstein cross and 7 holstein along with 2 holstein heifers, AND these steers are of a much higher quality then the first ones for their age. Did I break even, Yep, in my book. My family has beef in the freezer and I can now run my operation off my first investment. So my point to all of this is raise good beef and sell for a good (fair) price for your area and over time you will build a reputation and sell all you can raise. Oh, and as far a the jersey steer, he sold for $1,100 and the buyer has already requested the jersey/holstein calf be saved for him and his family. Lastly, 5 (some bought halves) have called and asked for a steer be saved for them next year.


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## BrokeFarmerJohn (Mar 11, 2016)

Thanks for everyone's input, I have an idea what to sell beef at, next is what to look for on a quality butcher?


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## Alaska (Jun 16, 2012)

BrokeFarmerJohn said:


> Thanks for everyone's input, I have an idea what to sell beef at, next is what to look for on a quality butcher?


 Hope you can find one close to home. I would hate to have travel far for a butcher.


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## TerriLynn (Oct 10, 2009)

We sell a few cows or steers every year. Our cattle are grassfed and we normally grain them out for about 75 days.

How we started was to call the local processing place, we have a few around so I called them all and asked for the name of someone they used who would come out to the farm, make the kill and quarter the animal here, then transport to the processor. We kept getting one name from multiple processors and called him. He charges a flat rate for what he does and we pass that along to the customer.

We work with the same processor every time and what they do is to collect the money for the guy who comes out to the farm and they pay him directly for us as a courtesy, they also collect the money for the meat for us at the time the customer picks up their processed cow, and will mail us a check.

We provide the processor with the names and phone #s of the buyers. Some people want a whole cow, some half, and some just a 1/4. We wait until we have a whole cow sold before we start the process of having the guy come out to the house.


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## BrokeFarmerJohn (Mar 11, 2016)

I called around and found a few processors who kill at there place, butcher and pack the meat, it's down two 3 places 

1. Charges $80 kill fee $80 disposal fee of $5 and .80lb

2. $50 kill, $10 disposal and .65lb

3. $40 kill, no disposal and .55lb

So there in the .75-$1 per pound for field to freezer. I never called anyone about killing at my site. 

Depending on who it is I was going to ask $2.85-$3 per pound plus butcher, I was leaning towards the middle one but am going to visit all the shops tomorrow and see which one I like the best before I haul any cattle. 

Let me know if those prices seem par. First one going in is the 50% beef 50% dairy steer, by the time the first goes to butcher he will be around 67 ish days into his finish. Earliest I could get him in would be Jan 10th and I started finishing end of October/beginning of november.


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## oregon woodsmok (Dec 19, 2010)

How to sell? If you are just starting out and do not have a return customer base?

Locally, there is a free advertising newspaper called The Nickel Ads. That's where farmers offer beef by the side or quarter. So, you check the price that everyone else is charging.

Then you call the local custom butchers and see what they are charging for a side. I also take into consideration what meat sells for in the supermarket.

You balance that all out with the quality of the beef you are selling and basically, you take a guess at what you think you can get.

To get higher than average prices, you must be offering something special. If you are selling a standard sort of cow, raised and fed just like everyone else's beef, you get the same price that they get.

You will get considerably more than you would get to sell the cattle at auction.

Your butcher will make or break you. The quality of beef in the freezer is heavily dependent upon how well the butcher handles and ages meat.


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## oregon woodsmok (Dec 19, 2010)

Veering not too wildly off topic, some of the small local farmers and the local breweries have gotten together to sell what they call "barley beef". The cattle are fed on the spent grain from the brewery. They advertise this beef, both on the telly and on the radio.

I haven't looked into it too closely, but I suspect that the beef is quite good and the price isn't too far out of line. It has to be a large co-op to pay for advertising to sell meat.

This is an area chock full of boutique breweries, so there is plenty of spent brewers grain to feed to cattle. By banding together, it is possible to pay for advertising, and they are offering something special, not what everyone else is selling.


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## oregon woodsmok (Dec 19, 2010)

Forgot to say, you do not include the cost of land, fencing, and equipment as cost of producing beef, Those are capital improvements not expenses. They do come off your taxes. Most of it has to be depreciated not expensed.


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## gundog10 (Dec 9, 2014)

I would go with #2 or three. #1 is way to high. I have mine farm killed and it is $80 a head. If I was taking them to the shop the kill fee is $15. Cut and wrap is .45-.55 a pound. I would never haul a beef to the butcher until I had money in my hand for the beef. Nothing worse then a beef sitting at the butcher and someone changed their mind. Get your money up front. Just my .02.


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## BrokeFarmerJohn (Mar 11, 2016)

oregon woodsmok said:


> Veering not too wildly off topic, some of the small local farmers and the local breweries have gotten together to sell what they call "barley beef". The cattle are fed on the spent grain from the brewery. They advertise this beef, both on the telly and on the radio.
> 
> I haven't looked into it too closely, but I suspect that the beef is quite good and the price isn't too far out of line. It has to be a large co-op to pay for advertising to sell meat.
> 
> This is an area chock full of boutique breweries, so there is plenty of spent brewers grain to feed to cattle. By banding together, it is possible to pay for advertising, and they are offering something special, not what everyone else is selling.



I wanted to do this exact same thing, but there are or any brewery's near by, one is opening right down the road soon so I plan to do this with them.


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## BrokeFarmerJohn (Mar 11, 2016)

oregon woodsmok said:


> How to sell? If you are just starting out and do not have a return customer base?
> 
> Locally, there is a free advertising newspaper called The Nickel Ads. That's where farmers offer beef by the side or quarter. So, you check the price that everyone else is charging.
> 
> ...



I'm selling to friends mainly right now, here nobody reads the paper, it's all electronic. We have CL but not many on there selling beef.


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## mustangglp (Jul 7, 2015)

I very good luck selling my lambs on Craigslist .


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## coolrunnin (Aug 28, 2010)

BrokeFarmerJohn said:


> I wanted to do this exact same thing, but there are or any brewery's near by, one is opening right down the road soon so I plan to do this with them.


You can buy DBG (dried Brewers grain) from most feed stores it's expensive and considered an ingredient, but you can buy it...lol


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## Alaska (Jun 16, 2012)

Our 21 month old lowline (3/8) looking ready for the butcher appointment jan 10th. Finished on Chaffhaye (alfafa).


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## tree-farmer (Jul 5, 2015)

You guys are so lucky to be able to have your animals farm killed or even have a choice of processors. The rules are so strict here no one finds it worthwhile to deal with all the red tape, and most producers just end up selling to the auctions.

But when we sell anything we do a bit of research to see what the going rate is in our area and that's what we sell for. Your costs should be irrelevant. No one wants to pay $1/lb extra because you spent more to raise your animals than everyone else.


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## BrokeFarmerJohn (Mar 11, 2016)

coolrunnin said:


> You can buy DBG (dried Brewers grain) from most feed stores it's expensive and considered an ingredient, but you can buy it...lol



There is a brewery about 2 miles from the house that just opened up yesterday


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## BrokeFarmerJohn (Mar 11, 2016)

tree-farmer said:


> You guys are so lucky to be able to have your animals farm killed or even have a choice of processors. The rules are so strict here no one finds it worthwhile to deal with all the red tape, and most producers just end up selling to the auctions.
> 
> But when we sell anything we do a bit of research to see what the going rate is in our area and that's what we sell for. Your costs should be irrelevant. No one wants to pay $1/lb extra because you spent more to raise your animals than everyone else.



I took the first one in 3 weeks ago and sold all the meat, was gonna keep a quarter for myself but sold it instead. I got $3 a pound hanging weight plus butcher fees, everyone was happy paying that.


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## BrokeFarmerJohn (Mar 11, 2016)

Alaska said:


> Our 21 month old lowline (3/8) looking ready for the butcher appointment jan 10th. Finished on Chaffhaye (alfafa).



I finished mine with corn, all grass fed before that. I am going to get with a lab and see what my pasture grass quality is and come up with a diet so they gain faster.


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## FarmerJoe (Nov 14, 2009)

BrokeFarmerJohn said:


> everyone was happy paying that.


That is what matters most, everyone was happy!


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## BrokeFarmerJohn (Mar 11, 2016)

Feed back on my beef was everyone thought it was awesome, the steaks were a little small being the steer was only around 700lbs but everyone agrees the price was fair. 

I'm just glad it's spring now and the grass is growing, hay was putting a dent in the ol budget lol.


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## sammyd (Mar 11, 2007)

The place we used in the past charged 50 bucks to come out and kill and quarter then animal. The process fee was 45 or 55 cent a pound if I remember correctly. There was no disposal fee.

The way we did things was to check with a couple of the local places and see what they charged for a half a beef ( we never sold quarters, just halves) Then we would add 20 or 25 cent a pound onto that. We would have the animal slaughtered and quartered on the farm and once it was weighed up I would tell the processor who to call to make out the cut sheets. I would collect the money and pay all the fees at the butcher shop.


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## Allen W (Aug 2, 2008)

Alaska said:


> Our 21 month old lowline (3/8) looking ready for the butcher appointment jan 10th. Finished on Chaffhaye (alfafa).


Looks good


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## WadeFisher (Sep 26, 2013)

oregon woodsmok said:


> Forgot to say, you do not include the cost of land, fencing, and equipment as cost of producing beef, Those are capital improvements not expenses. They do come off your taxes. Most of it has to be depreciated not expensed.


Fine tune this a little:
Depreciation IS an expense and you MUST include it in considering your costs. You don't expense the amount you spent in a single year, you expense what 1 year of this long term investment as an expense. Business 101. Some how you have to pay for that new fence, feeder or barn (etc). Real estate.... different yet. BUT it MUST be calculated in if you are running a business.
Just my 3 cents. Two extremes seem to persist. Capital expenditures should be returned on the year 'invested' or NOT AT ALL. Neither are correct. To make it worse, tax code depreciation is not REAL. GAAP; Generally Accepted Accounting Practices are more correct. Sometimes you may have to even put that to a reality test.
Think about it. I just bought a new self feeder it cost $1200. It feeds 6 beeves. Should I get $200 per beef. *NO*. Will it last 10 years... YES. Each year I raise 6 beeves using this feeder. Now the $1200 was really spent to raise 60 beeves. -->> $20 per beef cow. And this was simplified even a little. Because we still have what the resell value after using it for 10 years to deal with. You don't have to master it, just understand it and 'make your best guess' and you will be on your path to success.


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