A Child's Lesson In Direct Marketing

This is a true story told to me recently by a friend. I've changed the names of those involved and done some calculating of live weight vs. carcass weight prices to make equal comparisons.

Ashley has shown a beef steer each of the last three years at the local county fair, including this year. She and her dad, Tom, buy three calves to raise, one for the fair and two to sell. The only difference between the beef they raise and the beef one buys at the supermarket is that it's raised in a pen of three instead of a pen of three thousand. That is, the beef is not by any means organic, grass-fed, etc. The standard 4-H protocol is followed which is the same as the standard industrial/chemical agriculture protocol. The steers are raised primarily on grain with just enough hay to keep the animals from dying from total rumen failure.

The two steers that are sold go for $1.45 per pound live weight. This is one of the highest prices I've ever seen for bulk beef without a price premium for being organic, grass-fed, etc. The kids selling at the fair can usually expect a premium price just for being kids in 4-H. This year the champion beef animals, of which Ashley's was not included, sold for $1.30 per pound. The other animals would be expected to go for less. Tom promptly got on the phone and lined up buyers for the four quarters of Ashley's steer and went to the fair board office to pull her steer from the auction.

When asked why he was taking the steer out of the sale, Tom explained that the champion animals only brought $1.30. The fair board official replied, "We'll make sure every kid gets $1 a pound." "Not good enough," Tom said and they took their steer home from the fair and sold it for $0.45 per pound more money than the "premium" bids given the kids at the fair. For a 1400 pound animal, this equaled $630 more money.

The only reason I can see that Tom got such a good price out of his beef is simply that some people like to know where the meat on their plate comes from. The key is to find these people. Another key is to convince them that the price they're paying is really a bargain compared to the individual cuts in the supermarket. I estimate the total price at about $3.25-$3.50 per pound for actual wrapped meat in the freezer. That may be a lot for 80/20 ground chuck but them's some durn cheap ribeyes.