As a result of the article in Business Week, I have received a couple of good questions / requests from readers that I would like to take a couple of blog posts to answer.
One reader asked “Could you please share your experience whether or not you have faced any difficulty in selling your produce or livestock?”
My farm is the “last stop prior to harvest” for the cattle that I raise. Therefore, selling my animals is a very important part of my job as Boss Lady. Over the years, I have learned to recognize when my animals are ready to become beef by using a combination of data and visual appraisal of the animals to determine a harvest date.
When I determine that a group of animals is ready for harvest, I contact my packing plant partner to arrange the logistics of transporting the animals to the packing plant and the subsequent harvest process.
I market the majority of my animals on a quality merit basis to the same packing plant. I made the decision to do this many years ago when I decided that I wanted to be more involved in following the performance of my animals after they left my farm. I also wanted to receive a premium over the commodity market for my animals since I knew that they were of higher than average quality.
While the partnership that I have with my packing plant is not perfect, we have developed a working business relationship that is beneficial to both of us. I spent a long time last year tracing a calf from birth to harvest (those posts are archived under the Topic Beef Life Cycle-Calf #718), so I invite anyone that missed that series of posts to take a look at them to gain a better idea of what the life cycle of a calf is, along with the logistics of harvest. The posts toward the end of the series explain how I market my animals.
The bottom line is that “No”, I do not have difficulties marketing my animals. The combination of the high quality of my cattle and the partnership that I have with a packing plant allows for relative liquidity related to marketing. That being said, I do not always get the price that I desire for my animals.
The economics of supply and demand, in addition to outside interests “investing” in the livestock future’s board affects the base price of my animals. I have little or no control over this, so sometimes the amount of money that I receive for my animals at harvest is smaller than the cost that I have in the animals…
That leads me to the second reader’s question, “Is it true that cattle make only $20 per animal? That just doesn’t sound right to me. When I buy a New York steak from the market I typically paid around $6 – $7. That is one piece of steak. Where did the money go?” which I will attempt to answer in the next post…