Growing Local by Unknown

Author:Unknown
Language: eng
Format: epub
Tags: BUS070010 Business & Economics / Industries / Agribusiness
ISBN: 9780803258167
Publisher: University of Nebraska Press
Published: 2014-11-17T16:00:00+00:00

Cut

Yield (lb)

Cut

Yield (lb)

Ribeye

24

Roasts

64

NY Strip

20

Ribs and Brisket

26

Tenderloin

9

Stew Meat/Stir Fry/Other

42

Sirloin

24

Ground Beef

285

Total Yield 494 lb

Source: This is based on an example in a document that describes the beef cutout calculator (National Cattlemen’s Beef Association n.d.).

Marketing and Retail Operations

The meat department in each Kowalski’s store includes backroom facilities for cutting, trimming, and packaging meat from boxed beef primal and subprimals; a full-service custom meat counter; and self-service refrigerator and freezer cases. Meat and seafood account for approximately 12.5 percent of sales in a typical Kowalski’s store, and beef product sales represent approximately one-third of meat and seafood sales. With $425,000 average weekly sales at the Grand Avenue store, weekly sales of meat and seafood are approximately $53,125 and weekly sales of beef products are approximately $17,700. Kowalski’s All Natural beef products are labeled “Kowalski’s Premium All Natural Beef. No added hormones/antibiotics! Source verified. Product of the USA. USDA Choice/Prime.” This provides the consumer with information about production methods, quality, and country of origin.

Oase notes that Kowalski’s tries to price beef products so that over time the mix of cuts purchased comes close to matching the cutout from whole animals. Median prices for “Kowalski’s All Natural” 85 and 87 percent lean ground beef and ribeye steak in the Grand Avenue store during 2009 were $3.99/lb and $13.99/lb, respectively.

Table 15 shows a sample whole-animal cutout for a 1,300-pound steer supplied through Creekstone. This assumes a hot carcass weight of 800 pounds and an estimated retail yield of 494 pounds of beef. With the exception of product specials, beef prices in Kowalski’s stores are relatively stable—varying only in response to longer-term fluctuations in national beef prices.

For calculations in this case study, we estimate the 2009 retail value of the meat from one steer to be approximately $3,054. Assuming a 50 percent markup on cost, this implies a wholesale cost of approximately $2,037, with $750 of that going to Creekstone and J&B and the remainder to the producer/finisher.

Food Miles and Transportation Fuel Use

Meat sold in the Kowalski’s Grand Avenue store typically moves through a five-segment supply chain from cow-calf producer to the retail location. Calves, weighing 600–650 pounds, are transported from Nebraska and surrounding states to farms like those owned by the Verdoes in Marshall, Minnesota, for finishing. A trip from the cow-calf operation to the Verdoes finishing lot is 250 miles one way and requires 83.3 gallons of diesel fuel for the roundtrip. Assuming that 55 live feeder cattle, which will eventually yield 27,200 pounds of meat, are hauled by semi-trailer, this implies fuel use of 0.31 gal/cwt of meat. Once ready for slaughter, live animals weighing 1,300–1,350 pounds are transported by semi-truck to Creekstone, 615 miles away in Arkansas City, Kansas, for processing. Each semi-truck of slaughter-weight steers can haul 40 animals, which will eventually yield 19,800 pounds of meat. The roundtrip requires 205 gallons of diesel fuel or 1.04 gal/cwt of meat. After processing, J&B arranges for transport of the finished meat to its distribution facility 720 miles away in St. Michael, Minnesota, and finally another 60 miles to Kowalski’s Grand Avenue store using a semi-truck.

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