Do you want to know how much money butchers & abattoirs make? If YES, here is an analysis of the income & profit margin butchers & abattoirs make on a cow.
A slaughterhouse, also called abattoir is a facility where animals are killed and butchered, most often (though not always) to provide food for humans. Abattoirs supply meat, which then becomes the responsibility of a packaging facility to package and ship out.
America’s beef business seems straightforward enough – wean the highest percentage of calves possible per cow exposed, wean the most pounds possible per cow exposed, do so for the least cost possible, and sell them off for meat.
Cattle and calf sales were worth about $61.2 billion in 2007, according to the most recent USDA Census of Agriculture. Those receipts represented about 20% of the total market value of agricultural products in the U.S. that year, making it the leading commodity.
This shows that the meat industry is quite huge and would keep growing because meat consumption in the united states is not coming down any time soon. If you are wondering the amount a butcher can make out of a single cow, here is a rough estimate on that, including factors that can affect the profit.
How Much Profit Margin Can a Butcher or Abattoir Make on a Cow?
The profit a butcher or abattoir can make out of a single cow usually depends on certain variables such as the age and the body condition of the animal in question. Remember, a heavier carcass may not mean more money for the butcher.
The profit that can be made off a cow can vary considerably, depending on time of year, who has been speculating in beef futures, weather (drought or flooding), grass fed or lot fed, and where you are.
Also, the half a beef size can vary quite a bit, depending on what breed the steer is, and the age at which it is butchered, grass fed or lot fed, etc.
That said, usually a reasonable price would be in the vicinity of $3.00 per pound, nowadays. A thousand pound steer slaughtered would provide roughly 400–450 pounds of the usual Grocery Store cuts, somewhat more than that if you’re frugal, and reclaim the head, blood, and innards. Mostly people aren’t reclaiming the brains because of mad cow disease.
Basically, you need to look around and see what’s available, and, as with anything else, weigh the benefits of better prices vs the distance you need to go to get the better prices vs what you actually get for your money.
The Grade Defines the Price
An animal that hasn’t yet cut any adult teeth and still has a full row of baby teeth on the lower jaw is the most desirable, and the carcass is stamped with a purple letter ‘A’.
The carcass is then graded according to conformation; good conformation with good muscling is a ‘3’, and poor conformation a ‘1’. This number is also stamped onto the carcass.
An animal with one or two adult teeth is marked with a green ‘A/B’ grade. While it is not worth as much as an A-grade carcass, the meat is still quite tender and the price is usually higher than for older animals.
An animal with three to six teeth is graded ‘B’ (brown). The meat is somewhat tougher than the A/B grades and the price per kilogram of carcass weight will be lower.
Animals with seven to eight teeth are fully mature; they are marked ‘C’ (pink/red). Their carcasses are the least valuable.
Put another way, a decent A-grade carcass may realise as much or even more money than a C-grade carcass that is considerably heavier. This is important to know, so that you do not invest far more money and time in older C-grade animals than in A- or B-grade animals.
Other Variables That Affect the Amount a Butcher Can Realize from a Cow
Yet another variable that affects beef cost is whether it was grass fed or conventionally finished in a feedlot. The age of the beef is another as well as its grade. A fourth is your location—proximity to producers means lower costs. Custom processing costs may vary depending on the cuts and packaging. This cost probably has some local variation as well.
Custom processors can charge a “dressing fee” of $40.00 and $0.91 per carcass/pound. Depending on your specific packaging requirements, there may be other costs involved. There’s a “patty” fee, for example, to grind and make meat patties.
The “hanging weight” for a side of beef averages just over 300 pounds. The total processing cost, here, would be about $320 or just about one dollar per pound.
That should “net” out to something over 200 pounds in packaged beef—let’s use 220 pounds as an example. That means your net—in the freezer—cost for processing is around $1.46 per pound. But that doesn’t include the beef, it’s just the processing.
Beef prices change every day so all we can do here is give some idea based on current prices. First, on the high end, a grass fed beef might cost $3.50 – $3.65 (or more) per pound, hanging weight. For conventional beef, based on current USDA data, it looks like $1.80 up to almost $2 per pound (hanging weight) depending on grade and other factors.
If you are actually purchasing live cattle to split with someone else, you can expect the hanging weight to be about 60% of the live weight. Currently the average price for a steer (80%+ Choice) is about $1.10 per pound (live weight).
In reality, you will probably buy a side of beef from a processor, pay their price for the beef and the processing, and collect the packaged meat—one stop shopping.
But the total of what you pay includes all the items discussed above. All things considered and based on the hanging weight, you should come out around $3.00 per pound or maybe a little more. On a “net” (in the freezer) basis, that might translate to something around $4 per pound.