Tuesday, August 26, 2008

By the Cut, Half, or Whole?

As we inch closer to our first farm meat sales I am beginning to consider the different ways to sell our pork, beef, and possibly poultry. Our pigs should be ready around November/December (if you are interested in buying shoot us an e-mail) and I am starting to wonder if there are benefits to selling by the cut or at least in smaller packages. Of course if we decided to sell by the by the package there would be other hoops to jump through, but would the positives outweigh the difficulties?

Right now we are planning on selling our pigs as halves or wholes and just taking them to our locker or possibly one close to the customer. A couple of the biggest benefits with this sales method is that you have fewer customers to coordinate with and you are able to sell all of the cuts at the same time, not just the most popular cuts. Buying a whole or a half is also less expensive for the customer most of the time because you don't have to use a state/national inspected/certified processor.

The downside of selling by halves or wholes for the consumer is that you get a lot of meat! Of course that isn't a down side for everyone, but smaller families or couples (and singles) may not need or have the space for 80 or 160 pounds of pork and even more beef. I suppose another downside for the producer is that you are dealing with a smaller customer block. It may be a positive thing to be able to sell to many people.

If we decided to go the route of individual cut sales there are a few hoops that we would need to jump through. We would need an approved label, some sort of storage area (does it need to be certified?), and a certified processor. It is becoming more difficult for the small farmer to jump through all of those hoops, but it is possible and is being done by small-scale farms all over the country.

So, what are your thoughts? If you a farmer, potential farmer, customer, or potential customer I would love to hear what some of your thoughts are. Do you love the variety and relative economy of a half or whole? Or, do you like the idea of small package deals and individual packages for sale?

9 comments:

Chris said...

I've been thinking a lot about this same issue, as we'll have pork to sell for the first time this fall as well.

A key reason that I want to sell "by the cut" is that I want customers to compare pricing to the supermarket or organic foods store, rather than to picture themselves buying "half of a hog". I also want to be able to sell to a larger customer base now, in order to build up demand for future years.

But you're very right that there are more hoops to jump through and costs to sell by the cut. And there is the risk that we end up selling all of the bacon and chops with no one wanting the less well-known cuts.

So the way that we're thinking of handling it is to sell by the half/whole, but price by the cut. So when you get a half of a hog, you're going to pay $x/pound for the chops, $x/pound for the bacon, etc. Then, our customers can easily compare what they are buying with "store" pricing to see the value, but we also get the simplicity of avoiding "retail" packaging.

Steven said...

Another option is to do both because both have their merits. Some friends of ours sell wholes and halves that have been reserved and then keep everything else to sell as individual cuts through the rest of the year.

Kramer said...

We do both. It works out great because when we sell whole or half, we don't have to have it inspected, pay processing fees, or store it in our freezers.

However, there are always people that want to buy only certain cuts and are willing to pay more for them because they don't want to have to worry about putting up 240-270#'s of meat. Our last three hogs dressed at 252#, 293#, and 295#. That is a lot of meat.

We try to retail out the larger hogs and whole or halve out the smaller ones. You will find which cuts sell, so the not so desired cuts can be made into pan sausage or ground pork, always good sellers.

Then when you have customers that buy from you repeatedly, you can contact them and let them know you are going to be butchering and see if they want any specific cuts. This really makes it seem like you want to go the extra mile.

Either way, you will be fine whatever you choose.

sugarcreekfarm said...

We started out just doing on-the-hoof, and eventually got into selling by the cut as well. We still do it both ways. You're right that there are hoops to jump through, licenses & permits to obtain, etc. I won't hijack your blog with a big long comment, but will try to write my own post about it soon.

Tim said...

It's a personal choice for you Ethan. By selling cuts, as we do, you can reach a much broader customer base, thereby casting a wider net. You can also realize better pricing margins with individual cuts.

On the other hand, there is a lot you'll have to deal with. You'll need to design and print freezer labels, and have them approved by the USDA and/or your state meat inspection service. That's a process. Then, you'll have to have storage freezers to pick up the cuts in and store the cuts. We have to have a mobile meat license as well as a storage facility license. If the freezers go down for whatever reason, you'll have to be prepared. Conversely, if you sell halves or wholes, customers pick up at the processor and you need no label, no freezer, no risk. But your market is smaller as are your margins.

As Jason says, you can make it work either way. No wrong answer.

Tim
Nature's Harmony Farm

Chris said...

I definitely agree with the desire to sell to a larger base, as we're all trying to grow our customer list. But I'm wondering why the margins are always assumed to be lower in selling entire sides or whole animals. Sure, customers expect some kind of discount by buying 100+ pounds of meat, but is that discount necessarily larger than the cost savings involved? If I can sell 100 pounds of pork for a 15% discount over the "by the cut" price, but by doing so I save on freezers, gasoline, using a cheaper butcher, less expensive packaging, etc. then I might actually have a higher margin.

Mrs. J. said...

Hi,
I won't be buying from you because I live too far away :). But I regularly buy meat from a biodynamic farm near me. They send an email to customers when the meat is ready, and you pick up a crate of about 14 kilos of all sorts of cuts (including minced meat, sausages and a bone for making soup) for a fixed price per kilo (around 13 euro). The meat is still fresh, you have to race home, divided into the portion size you want and freeze it yourself.
About one third of the crate is filled with what Chris called the "less well-known cuts", i.e. stuff I probably wouldn't have bought given the choice (liver, for instance).
I expect here in Holland we eat less meat per meal than you do in the US, I usually share a crate with my brother and my 7 kilos last about a month.
I'm very happy with this system.
Best wishes,
j.

Michelle Kruger said...

In my opinion you should start out with selling halves and wholes. When we used to buy a pig, if we felt it was more than we wanted then we would coordinate with family or friends and split it up. We don't buy them anymore since we raise a few for ourselves and the kids 4H projects each year. If I was a potential customer and I felt that a whole hog was too much it would be nice if you could sell me a half.

The reason I suggest not starting out with selling cuts is that it sounds like you have enough going on already. Selling retail cuts would take up a lot of freezer space also, and I assume you'd get stuck with some cuts and always be short of others. (unless you can figure out how to raise hogs with multiple tenderloins and hams)

JMO, hope this helps.
Michelle

Mellifera said...

I'm a big fan of starting small and working up from there, so if you care what I'd do, here it is. ; )

Start out selling wholes and halves. #1, while the paperwork for selling cuts isn't going to kill you, it might take longer than it takes to fatten a hog. #2, there will be some people/restaurants who will buy wholes and halves. #3, it gives you time to smart smaller, figure out how to grow delicious hogs, and time for word of mouth to spread. Selling individual cuts has the potential to reach a lot more people but there's no guarantee of actually having a customer base to buy them all right away until you have some kind of fan base going already. Starting with wholes and halves could give some good lead time both for your farming skills and from a marketing standpoint.

I wouldn't view the tendency of people to only buy certain cuts if they have the choice as a bad thing. It means you can take the cuts that would normally net you less and grind them up into (drumroll) value-added sausage. The profit-per-pig has a good chance of going up under individual cuts... once the paperwork's done.

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