Selling grass finished freezer beef
Considerations for producers pricing grass finished beef.
Grass-finished beef is in high demand. Many farmers are selling grass-fed beef as freezer beef. Grass finished freeze beef will typically have a lower dressing percentage than grain finished beef and producers should consider that and other factors when setting a price.
In a group of 54 cattle finished on grass through Michigan State University Extension research, there was an average live weight of 1,224 pounds with carcass weights averaging 668 pounds. This equates to an average dressing percentage of 55 percent. Typically grass-finished beef will range in dressing percentage from 53 to 58 percent depending mainly on the amount of fat cover, muscling and carcass size.
The leanness of grass-finished beef may attract some customers but it is still advantageous to aim for 0.3 to 0.4 inches of backfat opposite the 12th rib. This will allow for a carcass that has enough cover to stay in the cooler for 14 days of aging without drying out too much. It will also allow for enough fat for the ground beef. Depending on the genetics, type and size of the animal, decent marbling can be achieved in grass-finished beef if enough high quality forages are available.
The Grass-Finished Freezer Beef Pricing Worksheet on the Michigan State University Extension Beef Team website takes into account the lower dressing percentage and goes step-by-step through calculations to determine the live weight price comparison and average final packaged price. The worksheet gives current averages as of Aug. 2013 but producers are encouraged to determine their own production costs and marketing margin before setting a carcass price.
Using the average of four grass-finished beef carcass prices obtained recently from different meat processors, the average carcass price (typically hot carcass weight but sometimes cold carcass weight is used) for grass-finished beef is $2.88. On a 1,200 pound steer that has a dressing percentage of 55 percent, that equates to $1.58 per pound on a live weight basis. Current wholesale grass-finished beef is worth $2.50 per pound on a carcass weight basis or $1.375 on a live weight basis. Current grain-finished cattle are bringing $1.25 to $1.30 per pound on a live weight basis.
Using the $2.88 per pound carcass weight price and a 70 percent yield of the carcass weight makes the final packaged price around $4.88 per pound. The average retail price of all Choice beef cuts in July 2013 was $5.35. Additional value can often be captured if individual cuts of grass-finished beef or smaller bundles of beef are sold.