The Bottom Line on Beef Retail PricesTue, 25 Aug 2015 15:42:34 CDT
When retail beef prices are high, who is striking it rich? Probably nobody, says Brent Eichar, Certified Angus Beef senior vice president.
"A lot of our beef producers, they eat their own product," Eichar said. "They don't need to go to the grocery store to buy beef. So I think at times, there's maybe a bit of a disconnect from between how we go from about $1.60 cattle to that $14.99 ribeye steak."
Walking through the rough proportions can shed light on the basic math behind beef prices.
"Certainly, we know that through processing, we drop 35 percent of the weight of the animal," Eichar said. "As we take that through a side of beef down to a retail cut, we drop another 50 percent. So, you know out of 30-35 percent of the live weight actually beef."
If the product doesn't sell before its freshness date expires, the other beef sales must cover that cost, too.
"We don't want to villainize, whether it be the packer or the retailer, each of them are working on many times very narrow margins," Eichar said. "When they pay their meat cutters, pay their staff, pay for their real estate, their overhead, no one in this entire industry is getting entirely rich."
Eichar says cattlemen and the people who sell their products have a lot in common.
"I think at the end of the day, it comes down to passion and doing the right thing to feed families and to make a living and yet to generate a profit so they can grow their businesses," Eichar said.
When you think of it that way, everyone along the beef supply chain is a partner.
This video news is provided by CAB and the American Angus Association.
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