Episode Transcript
[00:00:00] Speaker A: Right now, beef is at a record high.
Processors are losing around $300 per head of cattle when they produce them, and families are sitting wondering, are we going to be able to continue to afford to grill a burger? Welcome to the Dust or Mud podcast. I'm Shelley.
[00:00:18] Speaker B: I'm rich.
[00:00:19] Speaker A: After 25 years of rich serving the United States Air Force, we left Washington, D.C. moved to the Ozarks in Missouri and started a regenerative farm farm. We produce beef.
[00:00:31] Speaker B: We do, yeah.
[00:00:33] Speaker A: And on this podcast, the Duster Mud Podcast, we like to talk about food freedom and farming. And today we're going to talk about farming and food prices.
[00:00:44] Speaker C: Yeah, for sure.
[00:00:45] Speaker A: Yeah. So what do you have?
[00:00:47] Speaker B: Well, everybody's getting hit in the pocketbook right now when it comes to beef.
[00:00:51] Speaker C: Yeah.
[00:00:52] Speaker B: And by everybody, I really mean that the only people that might be doing okay with beef right now is like a rancher that's selling cow calf pears or maybe a backgrounder, but they're probably getting hit as well. So what we're going to do on the podcast today is we're going to talk through some of the realities of beef right now and what that means to everybody, why it's going on, and then we're going to end it with some recommendations for the consumer, the farm to table producer, like we are, and then your normal, what you would call like standard cattle rancher or farmer.
[00:01:34] Speaker A: But before we get into that, I just want to take a second and thank our listeners for continuing to support this podcast. And we did take a little bit of a break.
[00:01:43] Speaker C: We did, yeah.
[00:01:45] Speaker B: It was nice, actually.
[00:01:46] Speaker A: Yeah. Some of our dear friends I know are, you know, kind of been jumping at the bit on when we were going to put out another podcast.
[00:01:52] Speaker B: Well, here we go, talking about beef again.
[00:01:54] Speaker A: We are back and we're talking about beef because beef just continues to really be a very volatile market. Well, for everyone.
[00:02:03] Speaker C: Yeah.
[00:02:04] Speaker B: For over a year now, we've been saying, hey, beef, beef, beef. And prices are going up and they're going to continue to go up in the store. And you know, when we said that, I don't know, a year ago or more, it looked like, well, they're already high. They can't possibly go up any higher.
[00:02:21] Speaker A: And as we all know, over the past 12 months, they've gone up another 11%.
[00:02:26] Speaker B: In the past 12 months.
[00:02:27] Speaker C: Yeah.
[00:02:27] Speaker A: Pretty steadily.
[00:02:28] Speaker C: Yeah. Yeah.
[00:02:29] Speaker B: So one of the things that's happening is that processors now are starting to slow down their processing lines.
[00:02:37] Speaker C: Yeah.
[00:02:37] Speaker B: There was a headline recently from Tyson, and I actually read through their entire quarterly Earnings call that they had. And one of the things that Tyson is doing, we did a podcast on Tyson, we did about four or five months ago, saying, hey, guys, Tyson's losing money on beef.
And the only reason they're able to do that is because of their chicken. And we used a thumbnail of a massive chicken.
[00:03:04] Speaker A: Holding up a cow.
[00:03:06] Speaker B: Holding up a cow.
That's still going on. Tyson is still losing money on beef. And as Shelley mentioned during that podcast, that can only go on for so long.
[00:03:16] Speaker A: Yeah, large corporations just don't really end. Their shareholders, more than anything, don't tolerate losses.
Actually, the only thing that a corporation, the only legal responsibility that any corporation has, especially publicly owned, is to their shareholders. And if they continue a model of loss, their shareholders are not going to be happy for very long, even though they're still making millions and millions of dollars on chicken.
What's the game plan?
[00:03:49] Speaker B: And during. During the shareholder earnings call at the end of it, the questions, I would say I didn't count them, but I would say probably 75% of the questions dealt with beef.
[00:04:04] Speaker A: Really?
[00:04:04] Speaker C: Yep.
[00:04:05] Speaker A: No kidding.
[00:04:06] Speaker C: The.
[00:04:06] Speaker B: The big shareholders were asking, hey, what's your plan for beef? And one of the things that processors like Tyson are doing is they're slowing down, literally slowing down the speed at which beef goes through their processing lines. And they say that they're being able to save, like, $100 million just by slowing down beef. So they're taking their time. They're getting more out of every carcass that goes through the line. And just in that slowdown, they're being able to save money. They're still losing money overall.
[00:04:44] Speaker A: Right, but they're saving. They're still losing money, but they're saving $100 million.
[00:04:49] Speaker B: That's correct.
[00:04:50] Speaker A: So by slowing it down, are you saying that before this idea to slow down or concept, they were like, there was waste? Yeah, just more waste on, like, left on the carcass in general.
[00:05:04] Speaker B: Correct.
It's interesting because they. They touted this as like some. Some big, I don't know, revelation or, you know, awesome invention or something that they've slowed down and they're now saving money.
[00:05:19] Speaker A: So also, the slowdown is causing a slowdown of how many head of cattle they are actually slaughtering over a certain period of time.
[00:05:30] Speaker B: So keep backing this up.
[00:05:32] Speaker A: Yeah, exactly. So back it up. And now you have.
Okay, we're only going. Instead of doing. Let's use some round numbers. Instead of doing 10,000 cows today or 10,000 cows this week, whatever the number is, we're only going to do 8,000.
[00:05:49] Speaker C: Right.
[00:05:49] Speaker A: So those other 2,000 cows are going to have to just stay alive somewhere.
[00:05:54] Speaker C: Right.
[00:05:55] Speaker A: Okay. Well, what they're trying to do is kind of like when gas prices are really, really high, they're trying to spread it out and make it go.
Make the beef that's available go further. And so as they spread it out, it's going to start backlogging.
[00:06:14] Speaker B: There will be. There will be less cattle purchased at the livestock markets.
[00:06:18] Speaker A: I see. So the. So the demand will begin to. They predict the demand. They're going to force the demand down.
[00:06:26] Speaker B: They're forcing the demand.
[00:06:28] Speaker A: They're forcing the supply down.
[00:06:30] Speaker B: Right, let's start that over.
[00:06:32] Speaker A: Start that over.
[00:06:32] Speaker B: They are forcing the supply right at the demand.
[00:06:36] Speaker A: I guess the demand I was talking about for them, they're not demanding is really. I was thinking about them not the end consumer.
So. But they're literally controlling the supply chain and they're slowing down the supply going into the consumer market.
[00:06:55] Speaker C: Yes.
[00:06:55] Speaker B: The other thing that they're doing is right now they're buying cattle at today's prices for future delivery.
[00:07:04] Speaker A: So whenever, like I was just saying, sort of like when gas prices are super high and you fill up your tank, you're probably not just going to just go on a, you know, Sunday drive on a Wednesday afternoon.
[00:07:17] Speaker B: Well, this is what they're doing right now.
[00:07:19] Speaker A: You want to make it go further.
[00:07:20] Speaker C: Yep.
[00:07:21] Speaker B: That's what they're doing, like with slowing down the line.
[00:07:23] Speaker A: Yeah.
[00:07:23] Speaker B: The other thing that they're doing would be similar to. I'm going to fill up my gas cans, too.
I'm going to fill up my tank and I'm going to fill up my gas cans so that I have gas in the future at today's price.
[00:07:37] Speaker A: Yeah. Because they will buy. From my understanding of the commodity beef market, they buy on futures. Basically.
They'll have a contract and they will buy, say, X number of steers or cows to be processed at today because they continuously going up, guys. Every single week, the United States cattle sale barns are breaking records. Every single week, somewhere in the nation is breaking a new record for the price per pound alive.
That the, that the, the feeders are costing them.
[00:08:17] Speaker B: Yeah, the, the. Them buying them on the futures. What that's contracted.
[00:08:24] Speaker C: Yeah.
[00:08:24] Speaker B: What that's proving is they believe that prices are going to continue to go up.
So when we talk about, hey, how can you predict, you know, you small farmer, how can you predict what's going to happen with beef prices across the nation?
I'm looking at Things like the processors are buying live cattle right now at today's prices for future delivery. They would never do that if they assumed the price was going to go down.
[00:08:55] Speaker C: Right.
[00:08:55] Speaker A: So let's talk about a few reasons why the prices are so high for the live cattle coming through the, the auction barns. What are some of the, what are some of the things going on around the nation and around the world that have literally just skyrocketed the price of a five, six month old steer?
[00:09:24] Speaker B: Yeah, there's. There are a lot of things and we've talked about a lot of them during previous podcasts, I would say. One is there has been an extended.
[00:09:34] Speaker A: Drought across the United States.
[00:09:36] Speaker B: Across the United States.
We got a lot of rain in the spring right now for us. Our grass is crispy and we're feeding hay. And that's. We're not alone. Certainly not everyone in the US Is experiencing what we're experiencing now. But it like if you look at.
[00:09:54] Speaker A: A large swath, the Southeast has been just, it's been brutal.
[00:09:58] Speaker B: We have been experiencing a drought. So the cost of raising that calf has increased.
[00:10:06] Speaker C: Right.
[00:10:07] Speaker B: The national beef herd, the number of cattle in our nation, beef cattle, is lower than it has been since the 1950s, early 1950s, it was the lowest last year. And this year it's even lower.
[00:10:26] Speaker A: Drought has affected the size of the herd because with drought comes cost. And a farmer who's barely making any money, if they're making it, or a rancher is barely making any money, if any at all, has been subsidizing with their off farm job. Right. And huge drought hits in 2022, 2023.
We got hit really hard as a nation. And those farmers took those cows to the sale barn and thousands and thousands of them were heifers, which are your herd builders. And they sold them off because the prices were good and the hay price was high. So they ditched. You know, they really downsized their herd.
[00:11:08] Speaker B: Selling the heifers is another one that is a factor here. And the drought is one reason. The other is just the prices are great right now for selling calves.
[00:11:19] Speaker C: Yeah.
[00:11:20] Speaker B: And so as producers are looking at what is my future potential for this heifer as a producer on my farm versus what can I get for selling this heifer? Right now they're making the decision to sell their heifers. Yeah, many talks now that is starting. Tyson said in their earnings call they're starting to see that reverse.
[00:11:44] Speaker A: So at the sale barns, they're seeing less heifers coming through.
[00:11:49] Speaker B: They're headed, they're starting to see that.
[00:11:50] Speaker A: Okay.
[00:11:51] Speaker B: I don't know.
[00:11:52] Speaker A: Headed to go be food, not just trading replacement heifers.
[00:11:55] Speaker B: Nobody's willing to say yet that heifer retention has started.
[00:11:59] Speaker C: Right, right.
[00:12:00] Speaker B: They're not making that as a. As a declaration, but they are starting to see the trends that there are less heifers now at the barn.
[00:12:09] Speaker A: But even if it starts, let's just say they said yes, people are starting to retain their heers. Rebuild has begun.
That's going to take till 2028. If we started right now, today. That's going to take until 2028 to see the, to see any kind of result in it to hit the kitchen table. It's going to take years.
[00:12:31] Speaker C: Yeah, years.
[00:12:32] Speaker A: Three years at best. That's in the commodity beef market. Ours is going to take longer than that if we start it because grass fed just takes an exorbitant amount of time. Longer.
Another thing that we were looking at is the imports slowing down.
[00:12:51] Speaker B: That's another one. So we've got the New World Screwworm re emergence. We did a podcast on that.
[00:12:58] Speaker C: Yep.
[00:12:58] Speaker B: About how the Mexican cartels are.
[00:13:03] Speaker C: Involved.
[00:13:03] Speaker B: In money laundering and how they're circumventing some of the checks. And the New World Screwworm has become an issue again. So as a result of that, they closed the border to Mexico as far as beef imports go back in June. So the. The number of beef being imported from Mexico is drastically reduced. Maybe looking at, if the border stays closed, It'll be like 1/4 in 25. It'll be 1 quarter of what it normally is. And then additionally, as far as imports go, we get a lot of beef coming in from Brazil. And recently an additional 50% tariff was added to imports from Brazil to include beef. So that has slowed down the number of imports from Brazil. So the amount of beef coming into the country imported is less right now.
[00:14:00] Speaker A: So again, supply shrinkage.
[00:14:02] Speaker C: Yeah.
[00:14:03] Speaker A: Across the board. Whether it's the American ranchers being affected by a numerous, by numerous circumstances or just globally. The beef. The beef is a. Is a problem.
It's a real problem.
[00:14:19] Speaker C: Right.
[00:14:19] Speaker B: The supply of beef.
[00:14:21] Speaker C: Right.
[00:14:21] Speaker A: The supply of beef. Now, one thing that hasn't changed, one thing that has not gone down is people's appetite for beef.
[00:14:29] Speaker B: Demand for beef has remained steady.
[00:14:32] Speaker A: So people still want it.
People are still eating it on the regular, but the supply is. I don't know.
As they, as they bring the supply down, as the packers slow down production and we're not getting the imports and people are still just as hungry. And macroeconomic supply and demand dictates that if we continue to demand, which I hope we do, let's continue.
Supply goes down, price goes up.
[00:15:07] Speaker C: Correct.
[00:15:07] Speaker A: I mean that's just, we all learned that in high school economics.
[00:15:11] Speaker B: Yeah, and, and I mentioned earlier, but beef is 11% higher than it was this time last year. Ground beef is at risk. Record highs. Your cheap fatty mix in the ground beef is now over $6 a pound.
[00:15:27] Speaker A: Lean stuff is running about 8 if you get lean.
[00:15:30] Speaker B: National average is now over $8 a pound for lean ground beef.
[00:15:35] Speaker A: Yeah, but people are still getting it, they're still eating it even with the increase in prices.
[00:15:42] Speaker B: But the traders, the markets, they call it, trading down is what's happening with the consumer right now. So your prime premium cuts, your ribeyes and T bones and porterhouse, the consumption for those has gone down. The price of those has gone up exorbitantly.
The, the demand for those has actually come down. The demand for ground beef has gone up. So consumers are in their terms trading down from the premium cuts to the cheaper cuts like ground beef, your, your chuck roasts, things like that, rump roast.
[00:16:25] Speaker A: Cube steak, things that have been possibly need to be cooked for a longer period of time in order to tenderize it or mechanically tenderize, you know, through the machine. But it's still beef. It's delicious. But we're trading down for the, from the prime cuts to things that we, that are more affordable.
There's lots on a cow that's still affordable because there's a very limited supply of the prime cuts. We see an entire trays of ribeyes sitting in front of us when we go to Costco.
But the truth is you get about 30 pounds maybe of rib eye off.
I'm guesstimating off of, based on what I've unloaded and stuff off of one, you know, thousand pound steer.
[00:17:19] Speaker B: So when we have beef processed for our store for air to ground meats, it we take one animal to the processor and then we go pick up one animal from the processor and put that in our store.
So um, we see that there's a very limited number of each of the different cuts. And you know, while you may get a couple hundred pounds of ground beef, sure. You're only going to get, you know, ten pounds of fillets.
[00:17:51] Speaker A: Right. Well, why is filet mignon so expensive? Well, because you only get 7 to 10 pounds. It's one, you know, chunk of meat, well times two of the, the tenderloin from the animal. You know, you can't just make an entire beef out of, you know, out of fillets.
[00:18:09] Speaker B: We did, we did have one lady, though. Not beef, but pork.
She wanted a whole hog. And she asked if she could please, as we were talking through filling out her cut sheets for how she wanted it processed, she asked if she could please get the whole thing as bacon.
[00:18:25] Speaker A: Yeah, she wanted the whole pig and bacon. And you know, that. Not to knock on her or disrespect her in any way, but the point is people don't really understand the carcass breakdown and what you get from a half of a side of beef or a whole pig. Where do, where do the different parts and things come from? You can have the whole thing turned into sausage. Now that is true.
And there are things like turkey bacon which would lead someone to think that you could get pork bacon as like the whole thing into bacon. But the truth of the matter is pork bacon is the pork belly. It is the side of the pig. And that fat cap around the side of the pig with a little bit of muscle, that's the bacon. That's true bacon. And so just, it's just our, it's our society, it's our culture. We go to the store and we buy a box or a package or whatever and it says smoked hickory, smoked bacon on it. And it, it looks sometimes like it was maybe even somehow machine made, but it's not. You know, it comes from a place on the animal, from a specific muscle group or fat. And when it comes to the beef, you know, the rib eye, it's pretty much the loin of the animal. And you're only going to get so much of that.
[00:19:52] Speaker B: So what we're seeing is those premium cuts. The price is going up.
[00:19:56] Speaker C: Yeah.
[00:19:57] Speaker B: And more and more demand.
50% of beef consumed now in America is ground beef.
[00:20:04] Speaker C: Yeah.
[00:20:05] Speaker B: So the, the demand for ground beef is increasing.
The demand for the, the premium cuts is decreasing while the price for both are going up.
[00:20:18] Speaker C: Right.
[00:20:19] Speaker B: We had, we'd had a gentleman talking to us about he was going to buy a half a beef from a friend of his and he was very, very hesitant and he said, yeah, you know, it was going to be fifteen hundred dollars for a half a beef. And I used to pay $800 for a half beef.
And I just thought that was crazy.
[00:20:42] Speaker A: We both looked at him very wide eyed and was like, whoa, if you can get a half of a beef for fifteen hundred dollars, you should take that deal now because that's a steal. And I'll tell you why. Because right now if you want to buy a ready to go to the processor. Beef walking around in a pasture, grass fed, lovely, taken care of. You want to take this thing and go get it processed, it's going to cost you about $3 per pound alive or more.
[00:21:16] Speaker C: Or more.
[00:21:18] Speaker A: And so if you do the math and you take a 1400, 1400 pound steer, which is a nice size fat, you know, going to make beautiful ribeyes, and you take that to the processor, you have over $3,000 in the animal before that animal crosses the scales and is actually slaughtered. So if, what did I say?
[00:21:42] Speaker C: Over three.
[00:21:43] Speaker A: Oh, over four.
I should do better math. Over $4,000 for the animal before it crosses in the slaughterhouse.
[00:21:54] Speaker B: You haven't processed it yet.
[00:21:56] Speaker A: You have not processed it yet. And so, you know, whenever it's processed, all the head and the hide and the feet and all of the insides are removed and you're left with two hanging beef sides.
You have just lost about 45% of the weight.
So now, now there's your kind of potential meat.
And you actually are going to probably walk out of the, the processor with about £400 worth of meat. 500 on a big guy.
[00:22:31] Speaker C: Yeah.
[00:22:32] Speaker B: For over, maybe a little more than that.
[00:22:33] Speaker A: For over $4,000.
[00:22:35] Speaker C: Yeah.
[00:22:36] Speaker A: Before it was processed. And it's going to cost you another thousand dollars to get it processed.
[00:22:40] Speaker C: Plus.
[00:22:41] Speaker A: So the point is, in the market today, if you can find a good price, you should take it for sure. But I can also tell you just based on those prices, when you get down to the nitty gritty of a pound of grass fed ground beef, it, it's valuable.
The producer, the processor, everyone has high stakes in this. The costs have gone up. Yeah, that's just, it's just simple math.
[00:23:13] Speaker B: I think before we get into the.
So what, you know, what do we do from here? Like, I would, I would wrap this section up by saying prices are high. And all indications are that they are going to continue to go up.
[00:23:28] Speaker C: Right.
[00:23:28] Speaker A: But demand is still there. People still want to, I want to eat beef, right? Oh, I'm going to eat beef, you know, even if I have to eat the lesser cuts. And we start, you know, acting like beef is a little bit more of a luxury, you know, food, but we're still gonna try to get the nutrition out of it.
[00:23:46] Speaker B: All right, so, so what, what does this mean for the consumer?
The, the, the person who just, you know, purchaser of beef has nothing to do with the production?
[00:23:59] Speaker A: Well, I, I would maybe change some of my purchasing habits because I still want to feed my family good food.
I probably am going to buy in bulk when I can maybe do say like our store, oftentimes we will run a deal bulk packaging. If you buy ten pounds of hamburger, I'm going to, I'll, I'll throw in one for free. That's going to drop your price a little bit per pound.
If you can find places who do subscriptions, you could join a subscription service because a lot of times you get a percentages off of the cost of the entire bundle.
If you will commit to buying every month or whatever that subscription is.
[00:24:47] Speaker B: Finding a half or whole beef, it may mean that you have to get yourself a freezer. That's a one time purchase though. And when you buy a half or whole beef, what you're doing is you're averaging the cost across all of the cuts. So your cost for rib eyes and fillets is the same as ground beef. So if you can find somebody, even if the price seems higher than it has for you in the past, if you can find somebody that is selling a half or a whole, do a little bit of math and, and you can use the Internet or, or one of the artificial intelligences to help you say, you know, what can I expect at this price? They want this for their half beef or whole beef. What can I expect my average cost per pound across the entire animal to be? And you know, a lot of times what you'll find is that average cost might be higher than what you would be able to buy ground beef for in the grocery store, but it will be considerably lower than, and what you could buy ribeyes and New York strips and T bones and stuff.
[00:26:00] Speaker C: Yeah.
[00:26:01] Speaker A: And it, you know, it will be expensive because you're buying probably close to a year's worth of beef, but you're sort of doing what the packers are doing. You're buying at today's prices. Buying today's, today's, you're buying now for tomorrow's beef as you're, as you're storing it. And when you're eating a ribeye at, you know, $15 a pound instead of $50 a pound, you're sitting there pretty happy that you made that choice. Keep your freezer stocked whether it's beef or chicken or pork or lamb or whatever it is that you eat. You know, when we buy in bulk, we always save money. I was looking at Facebook earlier and colleague friends of ours from years back. She posted on Facebook some things that she had learned and done and she went to what appeared maybe to be Costco and she boug an entire loin beef loin.
And she opened it up, she learned how to slice it herself. She sliced it into one inch thick or, you know, whatever thickness she wanted. She vacuum sealed them. She took the, the lard or not lard, it would have been tallow or suet off of the, the tops. She trimmed it, she rendered that down so that she would have some to cook with. And then she had individual steaks at both bulk price in her freezer for the future.
And I just like, yes, girl. Yes. You know that.
[00:27:27] Speaker C: Yeah.
[00:27:28] Speaker A: That. Those are the types of decisions and things that we can do to keep the food that we want in our freezer at a more reasonable cost.
[00:27:37] Speaker B: I would say another thing that you can do is get real familiar with your crock pot or your instant pot or, or your oven for braising.
Like, don't be afraid of the cheaper cuts. They are still beef. They just need to be cooked differently. It's not. You can't just take it out and throw it on top of a fire and then expect that you can chew it.
[00:28:06] Speaker A: Hey, the plus side of that is if you've done it before you went to work, it's ready when you get home.
[00:28:11] Speaker C: Yeah.
[00:28:11] Speaker A: So that is. But you know, a lot of those cuts that people don't quite know what to do with. You could take a chuck roast and put it in your crock pot. I do a little sear before I put it in there. My cast iron. Cook it in your crock pot all day while you're out working.
When you come home, that's going to taste like a, like a prime rib, really. You know, it's, it's going to have, it's going to be succulent, it's going to have amazing flavor. It's going to be tender. You just got to give it a little extra time.
[00:28:40] Speaker C: Yeah.
[00:28:40] Speaker B: And people look at it and they're like, I don't have eight hours to cook a chuck roast.
[00:28:44] Speaker A: Yes, you do.
[00:28:45] Speaker B: It's like, no, no. You throw it in there in the morning and then let the crock pot cook.
[00:28:50] Speaker A: That's right. You know, we have electricity and technology and, you know, devices that we can use outside of a grill.
[00:28:57] Speaker C: Yeah.
[00:28:57] Speaker A: You know, there's way more ways to cook a delicious meal than just throwing something on the grill.
[00:29:02] Speaker B: So again, using maybe AI or just an Internet search, you can find yourself some recipes for your cheaper cuts of meat. So you could even, you know, pregame that a little bit and say, I know that chuck roast is going to be cheaper. Cheaper than ribeye. So I'm going to buy a chuck roast this week. Get yourself a recipe in mind at least. And then when you go to the store, you're like, oh, yeah, look at that.
[00:29:30] Speaker C: Right?
[00:29:30] Speaker B: I'm going to make out with a few pounds of chuck roast that is less than even one pound of some of your premium cuts.
[00:29:39] Speaker A: And if you're like so many people that we know, and maybe you're empty nesters, it's just the two of you, or maybe even you're by yourself and you cook that chuck roast one day, you've got meals, you've got several meals all cooked in one.
[00:29:51] Speaker C: Yeah.
[00:29:52] Speaker A: One fell swoop.
[00:29:53] Speaker B: And that's the last point, which is don't abandon beef. It's still very good, very nutritious.
Just we have to figure out how to stretch it. How do we make our, you know, dollar per pound of beef go further.
[00:30:07] Speaker C: Right. Yeah.
[00:30:08] Speaker A: And, you know, people do it in a lot of different other, I guess, purchases or sectors of life. Like I was mentioning earlier, with gasoline prices, we're more judicious. You know, if I'm going to buy a half a beef or a whole beef, maybe I'm not going to throw, you know, every ribeye on the grill right out the chute. I'm going to, I'm going to ration and I'm going to put variety into our menus. You know, what is a Pike's Peak roast? I don't know. It's a big old hunk of beef.
[00:30:39] Speaker B: And I'm gonna figure it out.
[00:30:41] Speaker A: I'll figure it out. You know, and one thing we, we do is we get back to figuring out to do what to do with all of the animal.
[00:30:49] Speaker C: Right.
[00:30:50] Speaker A: Because there's more to, more deliciousness to a beef than just the ribeye or the filet.
[00:30:56] Speaker C: Sure.
[00:30:57] Speaker A: You know, an arm roast is amazing.
[00:30:59] Speaker B: Great flavor.
[00:31:00] Speaker A: Oh, my goodness.
[00:31:01] Speaker B: Got to cook it slow.
[00:31:02] Speaker A: Got to cook it slow. But it is fantastic beefiness, man. And you know, I discounted sirloins for years because, I don't know, they just kind of started being blah to us. But these be this beef we've been raising. The sirloin steaks are what we remember.
[00:31:19] Speaker C: They're our favorite.
[00:31:20] Speaker A: Yeah, yeah. Like from years and years ago when we were kids. But anyway, there's just so much more to it. And we encourage you all to really, really, you know, keep beef in your diet, but figure out how to do it a little bit more economically as we all are navigating the tumultuous beef market.
[00:31:41] Speaker B: So let's move on to the farm to table beef producer. The us's that are out there.
[00:31:48] Speaker A: Ooh, okay, I'm, I'm all ears.
[00:31:50] Speaker B: So I'm gonna, I'm gonna go back to what Shel just mentioned. We, we just purchased a steer from a partner farm of ours. The steer was 1400 plus pounds at $3 a pound liveweight.
So we've got $4200 dollars.
[00:32:11] Speaker A: Before process.
[00:32:12] Speaker B: Plus and then we're going to have over $1000 in processing. So we're looking at $5500 cost.
Not counting anything for our time. Nothing for fuel, nothing for transport, none of that.
[00:32:27] Speaker A: Nothing for air conditioner for the store. No overhead is included in that.
[00:32:30] Speaker B: No overhead. We've got over 5,500 bucks in the beef that in two, three weeks we're going to have in our store.
[00:32:39] Speaker A: Now what do we do?
[00:32:40] Speaker B: The thing I would say to the us's out there, the farm to table beef producer is you can't lose money.
And that's where, that's what we got to. We're not Tyson. I can't afford to lose $300 ahead for every beef that comes through our store. We will be out of business.
So pricing is going to be of the paramount, utmost importance and comparing your prices to Walmart is not going to make it for you.
[00:33:20] Speaker A: Well, that's not fair.
[00:33:21] Speaker B: It just at all.
[00:33:23] Speaker A: It's not fair to you.
It's not fair to, it's actually not even fair to the consumer because the consumer believes that if they're going to a local farm to table, direct to consumer grass fed grass, blah blah blah, that they are actually getting a premium product that they know was like not commodity beef. And if they're paying a commodity beef price for your product, where's the differentiation?
[00:33:52] Speaker B: They don't believe it.
[00:33:54] Speaker A: Like I want if I'm going to buy a really like if I'm going to buy an, let's just say Apple versus Asus, you know, a computer. If I'm buying an Apple I'm going to pay a lot more money. But, but I'm going to expect.
[00:34:11] Speaker C: More.
[00:34:11] Speaker A: Out of it too. And so, but I know it's kind of like, I know I'm paying a lot more money. Of course I am. It's a better product. Yeah, that makes sense to me.
And so we have to also be fair to the product is what I, is what I'm getting at. And we're going to have to price and really pay attention to the value of every single package of meat that comes into to Our store. And you should too, as a, as a farm to consumer producer.
[00:34:42] Speaker B: And that the tie with that is you have to educate the consumer.
So why is it more expensive?
Why is it better? Yeah, you know, this is not ground parts and pieces and, you know, all of the yuckiness. This is steak trimmings that have been ground up and from one animal.
[00:35:10] Speaker C: Yeah. Right.
[00:35:11] Speaker B: This isn't 1300 animals worth of DNA smashed into a tube.
[00:35:17] Speaker C: No.
[00:35:17] Speaker B: Right. This is, this is one animal and it is higher quality.
So that's the reason the ground beef is 2, 3, $4 a pound higher than the ground beef that you can find in a discount grocery store. So education is paramount and spending the time, whether it's emails or Facebook posts or YouTube videos or whatever it is, standing and talking is probably the most important.
Spending the time educating the consumer on why it's different is, is going to, to be very, very helpful for you in getting people to actually make that decision to give more of their dollars.
And then I think probably a final recommendation for the farm to consumer is if you can find it, if you have cuts that are remaining.
So, you know, there are, there are times when there are pieces that don't sell or cuts that don't sell as fast as others.
For us, it's often like short ribs. You know, if you can find a way to offer bundles that includes some of those cuts that are sort of, I don't know, slow rollers, if you will, as far as going out of, out of your store or out of your inventory, make a bundle that includes those and get those things gone as well.
[00:36:45] Speaker A: One thing though I've thought about doing is whenever I do that or put a bundle in with it, offer a recipe for those lesser known cuts.
[00:36:53] Speaker B: Absolutely.
[00:36:54] Speaker A: Education again, teach people how. I don't even know what to do with this cut of meat. What's the best way to cook it? What's a good recipe? So that's another thing that we can do to offer to the consumer to get them on board with things that they don't see at, you know, the Costco counter.
[00:37:11] Speaker C: Yeah.
[00:37:12] Speaker B: And then the last discussion will be with the, the rancher, the cattle producer, the cow calf, the backgrounder, the replacer. Like, where, where are you in this whole thing?
Right now, those of you who are taking your cattle to the sale barn, to the livestock markets are seeing prices higher than we've ever seen. Like, as Shelley mentioned, nationally records are being broken across all weight classes every week. We're watching it and it just is.
So if, if you are older and you've been waiting for that perfect time to get out.
You're getting there.
[00:37:57] Speaker A: Yeah.
[00:37:58] Speaker B: You know, now's you've never been able to get more for your cattle than what you can get right now. I hate saying that because I want our cattle and beef producers to stay in business.
[00:38:10] Speaker A: I want, and I want that to remain independent because if we continue to sell and the, the independent rancher gets out, somebody's going to grow that, somebody's going to grow beef and it's going to continue to swing more towards the, the corporate setting. And we would, we, we direly need for our meat production in this country to be run by independent ranchers and farmers out there.
[00:38:38] Speaker C: Absolutely.
[00:38:39] Speaker B: Altruism, in my opinion, altruism goes so far.
[00:38:42] Speaker A: Yeah.
[00:38:42] Speaker B: And then.
[00:38:44] Speaker C: Yeah. Then it, it doesn't.
[00:38:46] Speaker A: And then it ends.
[00:38:47] Speaker C: Yeah. Yeah.
[00:38:48] Speaker B: If, if you're not, if you're not looking to get out. Thank you. Neither are we. And I would say for you, it's going to be incumbent to really pay attention to the, the price that you're getting for the animal that you're selling versus the price that you are going to have to pay to, to replace that animal. So there were a couple of weeks there when I was looking at the reports where if you were selling a seven or eight weight, meaning a 700 pound, 800 pound class animal, you would be getting less than buying a 500 pound replacement.
So if you said I'm bringing ten 800 pound steers to the market, I want to sell them, buy ten 500 pound steers for less than what I sold those 800 pounders for so that I can make money when I grow those up and they're now £800. What you would find is instead of walking out from the market with a check, you would walk out from the market writing them a check. It was costing more to buy the 500 pounders than, than it was to sell the money you were getting by selling the 800 pounders.
So don't just assume that because it's always been this way, you know, and it just makes sense. I would get more money for an 800 pounder than I would have to pay for a 500 pounder.
[00:40:25] Speaker A: Watch the trends, watch the dollars.
[00:40:27] Speaker B: It was reversed. Those 500 pounders were going at a premium.
So people were leaving the market owing money by replacing their 8 hundreds with 5 hundreds.
[00:40:39] Speaker C: Wow.
[00:40:40] Speaker B: So really pay attention.
[00:40:41] Speaker C: Yeah.
[00:40:42] Speaker B: And I would say the last thing is have a, have a, a long thought about your heifers and what you're doing. With your heifers and the fact that we all know that it takes time before that heifer is actually making you money when it stays on your farm.
But if you don't replace them, you're not going to have the cattle in the future.
So there's a sit down and run your numbers.
Work with an accountant, work with an AI assistant.
[00:41:15] Speaker A: Like maybe you already know how and you're sitting there nodding your head right now, you know, in agreement. But right now we're holding all of ours.
That's right, we're holding them all. You know, just, and we'll see as, as they get older and, and what their, what their genetics look like and, and whatnot. But right now, you know, we are, we know the nation and writ large is in a hurt for cattle production.
And right now if you are a heifer, if you are a female, you are eligible to reproduce. And that's what the nation needs. Not every single one of them. But we need to regrow our herd and we need to.
Apparently this, this beef thing goes in 10 year cycles.
[00:42:06] Speaker C: Yes.
[00:42:08] Speaker B: And it does this macroeconomic supply demand price up down.
[00:42:12] Speaker A: You know, this is, this is Right. But right now this, it's being this really prolonged weird curve that's happening that is not normal on the 10 year cycle.
[00:42:23] Speaker C: Yeah.
[00:42:23] Speaker B: The other thing for those of you that we're speaking with right now is historically it peaks and then it drops.
And one of the articles that I was seeing was, you know, a producer was saying I hope that it drops at the same slow rate that it has gone up. Right. Like it has just steadily been increasing. Right. And if it peaks over and steadily decreases, everybody can adjust to that. Historically though, that is not always what happens.
[00:43:01] Speaker A: Yeah. Because if you're sitting there buying at top dollar, it's just like the stock market. If you're buying at the top and the bottom falls out of it, you're stuck holding. You know, you've, if you've borrowed $500,000 to buy these, these feeders and now the bottom falls out of it.
You're, you're, look, you're in trouble.
[00:43:25] Speaker C: Yeah.
[00:43:25] Speaker B: Have long hard thoughts.
[00:43:26] Speaker A: Yeah. About hopefully it comes down real slow about. But I don't know if it's normal.
[00:43:31] Speaker B: Debt and, and how much you're incurring in order to, to replace or, or keep doing what you're doing. So that would be my, my last thoughts.
[00:43:41] Speaker A: Yeah. Totally. Very tumultuous times in the, in the beef market.
[00:43:46] Speaker B: So I would, I would love to hear from you.
Are you a consumer a farm to table producer like us. Are you a cow calf pair operator?
[00:43:57] Speaker C: What.
[00:43:57] Speaker B: What's happening in your world with beef?
Throw us a comment that I'm, I'm very curious.
[00:44:03] Speaker A: Yeah, for sure. Me too. Yeah, yeah. What are the prices that you're seeing in your area for a pound of ground beef?
[00:44:11] Speaker B: And what decisions are you making? Where we were we close as we were talking through some different things to think about for everybody, I'd like to know not only what's happening, but based on that, what decisions are you making?
[00:44:23] Speaker A: And we absolutely encourage you to support a local farmer or rancher that is doing direct to consumer, farm to table. Call it what you want. If they're doing it in your area, support those guys. And we keep our independent small farm food resilience within our communities and keep ourselves fed.
[00:44:48] Speaker C: Well, yeah, yeah, yeah, yeah.
[00:44:51] Speaker B: Because all it takes when we've talked about before, one supply chain interruption, you know, one of the big four that produce 80% of our beef in this nation, you know, it only takes one thing and then you're really hit if you're relying solely on commodity beef.
[00:45:08] Speaker C: Right.
[00:45:09] Speaker A: Hey, thanks for hanging out with us again today at the Duster Med podcast. And until next time, bye, y'.
[00:45:14] Speaker C: All. Bye.
