Supermarket margins

kk.man

Bought an organic sirloin steak in Tesco (don't buy organic often). Beautiful steak and then I started to look at the packaging.
Cost me 6 euro and tbh it was worth it.
The meat weighed 213g.
Then I did my figures.
Thats €28.17 per kg. That s what has me boiling.

The farmer who killed this animal got probably 4.10/4.20 per kg and the Supermarket charges almost 7 times the price! I know there are high end verses low end cuts but this is taking the mick.

There is something very rotten in the state of Denmark.

It was killed and processed in ABP Cahir.

patsy_mccabe

Was in a butcher myself yesterday. Huge sirloin steaks, propably from a 400kg plus carcass. €29/kg they were. I was only killing time having a look around, but half tempted to get stuck into the butcher on what type of animal they ere etc.
We're slaving away for nothing. No other way to put it.

Odelay

patsy_mccabe wrote: »

Was in a butcher myself yesterday. Huge sirloin steaks, propably from a 400kg plus carcass. €29/kg they were. I was only killing time having a look around, but half tempted to get stuck into the butcher on what type of animal they ere etc.
We're slaving away for nothing. No other way to put it.

How many kgs of sirloin would be in a 400kg beast?

zell12

Same price in UK https://www.tesco.com/groceries/en-GB/products/252506569

TheChizler

Odelay wrote: »

How many kgs of sirloin would be in a 400kg beast?

This is important. Of course it will look bad if you're comparing the rate for one of the most highly sought after cuts with the rate for all cuts good and bad (is 400kg just usable meat or the weight of the whole thing out of interest?).

brightspark

Would it be an idea for farmers to get together and sell steaks themselves instead of via supermarkets. It would take a bit of cooperation but I guess it would mean the farmers could get a greater share of the retail price. They could call it a CO-OP...oops forgot they had them and then sold them for a lump sum, farmers of all people should understand that you reap what you sow.

patsy_mccabe

% weights of 280 Kg Bullock carcass

Fillet - 1.9%
Striploin - 4.5%
Topside - 6.5%
Silverside - 6.4%

Bone - 16.2%
Fat - 5.8%

Odelay

patsy_mccabe wrote: »

% weights of 280 Kg Bullock carcass

Fillet - 1.9%
Striploin - 4.5%
Topside - 6.5%
Silverside - 6.4%

Bone - 16.2%
Fat - 5.8%

What is the other 60% of it?

Odelay

It’s all a bit simplistic pricing sirloin.

Reminds me of this video.
https://m.youtube.com/watch?v=6A7bq1HFygs

patsy_mccabe

Odelay wrote: »

What is the other 60% of it?

You want me to list every single cut?:D

epfff

patsy_mccabe wrote: »

You want me to list every single cut?:D

Id be interested in ball park figures of rest bulk mice etc together

patsy_mccabe

Hard to quantify mince. Well you know yerself, could be from anywhere.
Here's the document, I got it from;

http://www.qsmbeefandlamb.co.uk/books/beef-yield-guide/index.html#12

Simmental.

I think the cost of goods would include wages, transport, advertising etc.

Grueller

Simmental. wrote: »

I think the cost of goods would include wages, transport, advertising etc.

They do for the farmer too

wrangler

epfff wrote: »

Id be interested in ball park figures of rest bulk mice etc together

That's the reason I keep repeating that BPM etc should process and sell their own beef for a couple of years, these spurious claims that are uttered are only back of the cigarette box efforts.
Often saw irish lamb carcases priced in Rungis meat market in Paris at the same price as we were getting at home, when I asked the agent that was with us how they did it he'd say that the Offall pays for the processing charge.
That was before BSE, and skins were £8 at the time, they're worthless now if they're salted and if they're not salted you're charged to dipose of, don't know what the position is now as regards offal paying for processing now

Butcher Boy

The poor butcher must make a pound too .

kk.man

wrangler wrote: »

That's the reason I keep repeating that BPM etc should process and sell their own beef for a couple of years, these spurious claims that are uttered are only back of the cigarette box efforts.
Often saw irish lamb carcases priced in Rungis meat market in Paris at the same price as we were getting at home, when I asked the agent that was with us how they did it he'd say that the Offall pays for the processing charge.
That was before BSE, and skins were £8 at the time, they're worthless now if they're salted and if they're not salted you're charged to dipose of, don't know what the position is now as regards offal paying for processing now

I totally agree with you but my point is the supermarket shelves are very very profitable for very little effort.

wrangler

kk.man wrote: »

I totally agree with you but my point is the supermarket shelves are very very profitable for very little effort.

Some supermarkets expect to be supplied for a month free of charge as Hello Money, rumored to be common with milk suppliers years ago,
I also know an independent supermarket that used to get an artic of breakfast cereals every Christmas, i'm sure he reached targets to achieve that but a feckin lorry load

Some agri merchants even stopped giving th'ould tin of biscuits, feckin house is full of flamin calenders

Water John

The cuts and amounts from a carcase were in the IFJ a few weeks ago. I think it was just under 100 steaks of various sorts plus other joints, brisket etc.
Does that make sense?

kk.man

wrangler wrote: »

Some supermarkets expect to be supplied for a month free of charge as Hello Money, rumored to be common with milk suppliers years ago,
I also know an independent supermarket that used to get an artic of breakfast cereals every Christmas, i'm sure he reached targets to achieve that but a feckin lorry load

Some agri merchants even stopped giving th'ould tin of biscuits, feckin house is full of flamin calenders

I have no doubt Larry would give six months credit to a large supermarket chain if it meant getting a big deal over the line.

Water John

My yarn. Sent some cattle to the butcher 2/3 weeks ago, not paid yet.
Anyway saw some meals in my local shop, supplied by this butcher. Each item priced at €4.75 or 3 for €12, €4 each. Took the 3 offer. One item was meatballs in pasta and sauce. Might even be one of my own animals.
The meal had 5 meatballs each one bite, just bigger than a marble. The five together wouldn't make a burger pattie. Possibly 100 grms meat.
You can be sure that meat wasn't steak. Quite tasty, but had to put on the sausages as well.

Suckler

kk.man wrote: »

I totally agree with you but my point is the supermarket shelves are very very profitable for very little effort.

Very little effort? There are huge amounts of overheads and expenses shops have to cover as well as the fact that the price on the steak doesn't guarantee they'll see a cent from it.

yosemitesam1

Suckler wrote: »

Very little effort? There are huge amounts of overheads and expenses shops have to cover as well as the fact that the price on the steak doesn't guarantee they'll see a cent from it.

They surely get over 40% of the final price, no idea on their costs but it would make the factory's margin tight.

Suckler

yosemitesam1 wrote: »

They surely get over 40% of the final price, no idea on their costs but it would make the factory's margin tight.

What I meant by not getting a cent is that there is always the possibility that it doesn't sell and has to be dumped.

Say my name

Suckler wrote: »

What I meant by not getting a cent is that there is always the possibility that it doesn't sell and has to be dumped.

The bigger supermarkets don't buy the stock they just charge a margin for having the stock put on the shelves by that brand or that wholesaler owner's staff.
The smaller retailers would be a different story.

Suckler

Say my name wrote: »

The bigger supermarkets don't buy the stock they just charge a margin for having the stock put on the shelves by that brand or that wholesaler owner's staff.
The smaller retailers would be a different story.

Granted for the big chains but the cost of same will be borne by someone and ultimately be reflected in the price.

farawaygrass

Met a couple at a farm event a few years back and they used to grow vegetables and supply a few supermarkets. The way it worked was they had a supply agreement to supply say 20 boxes of veg. But if them boxes sold out before the week was out they would get a phone call and had to make a delivery pretty quickly. If only 15 of the 20 boxes sold though they were expected to take the hit on the 5. They got out of the business in the end. Found it too difficult

Water John

To get the true figures we need the cuts and selling price. This gives the complete retail price, plus the fifth quarter. We also know the price the farmer gets.

patsy_mccabe

Water John wrote: »

To get the true figures we need the cuts and selling price. This gives the complete retail price, plus the fifth quarter. We also know the price the farmer gets.

Well, here's Tesco Round Roast at €6/kg. That will give you an idea of the price range.

https://www.tesco.ie/groceries/Product/Details/?id=291683189

Water John

That's a loss leader, so standard price of that cut is €12/kg.

lalababa

From various reports the price a farmer gets from the factory is at or just below the cost of production. All the beef rearing to finnishing farming methods profits are neutral or loss. Why is this?? Because Ireland produces too much beef and the producers only have one market and must sell. Also the BFP. keeps things rolling along, most have a off farm job and the farming is a chaperone food producing hobby.

brightspark

Water John wrote: »

That's a loss leader, so standard price of that cut is €12/kg.

The loss leaders are subsidised by the items with high profits, they choose to sell some goods at a loss and some at a high profit

brightspark

lalababa wrote: »

From various reports the price a farmer gets from the factory is at or just below the cost of production. All the beef rearing to finnishing farming methods profits are neutral or loss. Why is this?? Because Ireland produces too much beef and the producers only have one market and must sell. Also the BFP. keeps things rolling along, most have a off farm job and the farming is a chaperone food producing hobby.

But don't forget the farmer also received additional payments in the form of grants etc.

larthehar

I was a BPM meeting and they had the following figures:
The farmer's share is currently less that 20% this would mean that on average a cut is worth around €19/kg.
They then quoted that the farmer in 1995 had a 40% share of the price and this has reduced steadily over the last 20 years to what we have today.
The question on everyone's lips was how do we get that share back or at least some of it..

The BPM 86 point plan is suppose to combat this by trying to bypass the factories, going direct to resellers, producer groups, purchasing groups. I'm certainly interested to see how it develops..

Water John

The divergence between a linear link between what a farmer gets and the retail price started to happen around 1980. Since then not only has the farmer % eroded but the actual return to the farmer has been going down.
This is across many food sectors.
Farming has also suffered because of the complete focus on commodity production. I wonder who benefits from this???

Mooooo

The agribusiness section of the comic was giving out how beef and dairy companies were legally hiding the profitability of their businesses. Supermarkets do the same, Tesco et al should be showing the profits/ losses of their Irish businesses. Every month there is ****e being printed about how much it apparently costs us to produce a litre of milk or a kg of beef, with a share of costs conveniently omitted, and that is often used to knock us

White Clover

brightspark wrote: »

But don't forget the farmer also received additional payments in the form of grants etc.

What additional payments in the form of grants?

yosemitesam1

Water John wrote: »

The divergence between a linear link between what a farmer gets and the retail price started to happen around 1980. Since then not only has the farmer % eroded but the actual return to the farmer has been going down.
This is across many food sectors.
Farming has also suffered because of the complete focus on commodity production. I wonder who benefits from this???

How much has production increased since the 70s?

wonski

I roughly know numbers when it comes to price per kg delivered to the supermarket and the margin is not great.

Running a meat factory is expensive, too. You can't just compare it with what you get per kilo.

Whatever about beef think of the chicken being sold for 3.99 or so on the shelf. That is a mystery to me how these guys survive.

Water John

Well, one factory was advertising for skilled operatives last week, paying €22k/yr.
That's €10.84/hr.

wonski

Water John wrote: »

Well, one factory was advertising for skilled operatives last week, paying €22k/yr.
That's €10.84/hr.

And how many of them does it take to get two pieces of steak cut off the carcass, packed onto the tray, labelled and delivered to the supermarket distribution centre?

Not to mention production line cost etc. Every company these days, especially in food industry, work on tight margin and the bigger the volume the better. That's why abp and the likes succeed.

These are state of the art facilities, too.

lalababa

The only way ATM to make a margin in rearing or beef (without big BFPs)is to go direct to market or a niche product or be very very lucky with high class show and sell breeding. The only way the factory price will rise is to limit the numbers, farmers will have to go down big time in numbers and inputs.
I remember seeing a comic article about a suckler farmer (with a good job in some semi-state!) increase his sucklers from 8 to 15 head by building a bigger shed costing circa 50k. Now how in the hell are 15 sucklers going to pay for a 50k shed...please tell me

Odelay

lalababa wrote: »

The only way ATM to make a margin in rearing or beef (without big BFPs)is to go direct to market or a niche product or be very very lucky with high class show and sell breeding. The only way the factory price will rise is to limit the numbers, farmers will have to go down big time in numbers and inputs.
I remember seeing a comic article about a suckler farmer (with a good job in some semi-state!) increase his sucklers from 8 to 15 head by building a bigger shed costing circa 50k. Now how in the hell are 15 sucklers going to pay for a 50k shed...please tell me

Yep. If there is 10% shortage in raw material supply the processors will eventually fight over it, after they have depleted their stocks. If there is 10% over supply in the raw material, the processors will pay as little as they want. Happens in all industries. Don’t know why the advisers didn’t figure this out.

wonski

One thing you all should "thank" the supermarkets and many other food businesses is the Irish only meat now on the shelves. At least you have some sort of control over the price and supply. They cannot just fulfill their orders with something else being imported.

Not sure how brexit gonna affect food factories that use UK frozen or processed meat etc, but I guess they will find cheap supply elsewhere in the UK. Or you will get additional market share. More likely not, though.

At least you are guaranteed to get orders as I can't imagine buying anything but Irish beef, be it mince or steak. And it is still great selling point.

Odelay

wonski wrote: »

One thing you all should "thank" the supermarkets and many other food businesses is the Irish only meat now on the shelves. At least you have some sort of control over the price and supply. They cannot just fulfill their orders with something else being imported.

Not sure how brexit gonna affect food factories that use UK frozen or processed meat etc, but I guess they will find cheap supply elsewhere in the UK. Or you will get additional market share. More likely not, though.

At least you are guaranteed to get orders as I can't imagine buying anything but Irish beef, be it mince or steak. And it is still great selling point.

It’s the shoppers we should thank for buying Irish, where they know about it. The supermarkets aren’t supplying Irish for the fun of it. The underhanded way some are packing their products to fool the consumer is a sign of how loyal Irish people are to locally produced food.
Supermarkets would buy it from the moon if they could save a few cents,and not be hit with bad press.

G-Man

Odelay wrote: »

It’s the shoppers we should thank for buying Irish,.

Should Irish Farmers be following them on this latest trend .
https://www.farmersjournal.ie/sales-of-plant-based-drinks-rose-by-40-after-veganuary-440044

I notice steak prices are down ..fillet is at 23/kg and striploins at 15/kg..Dublin Supervalu ... Has meat lost places this month.

wrangler

Water John wrote: »

The divergence between a linear link between what a farmer gets and the retail price started to happen around 1980. Since then not only has the farmer % eroded but the actual return to the farmer has been going down.
This is across many food sectors.
Farming has also suffered because of the complete focus on commodity production. I wonder who benefits from this???

What do you call commodities, they used to sell a lot in carcases but now they're processing it further. Have you been through a factory lately, I wonder what percentage of beef gets further processing.
I know ICM in Camolin have spent a fortune on research and development and further processing, It'd be worth your while taking a tour
BPM will have to cater to a the market, not what they think the market should be, I can see them getting a huge education unless the processors they're in 'business' :rolleyes: with saves their hides, excuse the pun

To quote Elvis 'the King'

Walk a mile in my shoes
Yeah, before you abuse, criticize, and accuse
Walk a mile in my shoes…Walk a mile in my shoes

Water John

The farmer is selling commodity. You can cut, chop marinade the animal all you like but the farmer doesn't benefit.

wrangler

Water John wrote: »

The farmer is selling commodity. You can cut, chop marinade the animal all you like but the farmer doesn't benefit.

You wouldn't expect them to unless indirectly because an efficient operator is a better customer

Shelflife

You can focus on the price per kg of sirloin or fillet and compare it to the carcass price that the farmer gets but you may as well be comparing champagne to the price of grapes.

Ive worked in the meat industry and in retail, some of the stuff on here is pie in the sky stuff.

I remember days in our meat factory where we had orders to beat the band for hindquarter but couldnt sell forequarter for anything we were nearly giving it away just to get it out of our stores, the same with fat we made no money at all on it.

So to take the price of sirloin and say that the factory was raping the farmer would be disingenuous.

The hello money to get your product on the shelf is I believe illegal now.

Ive never heard of 40% margins on meat in supermarkets and ive never heard of full sale or return on red meat either.


The margin in the retail area that I work in is approx 25% if I dont sell all the product then I am at the loss for it so your actual margin is lower than that.

Im not sticking up for the factories or the retailers just pointing out some of the inaccuracies in some of the posts.

Farmers deserve a fair price for quality product, but you cant compare the carcass price per kg to the price of a prime cut per kg

Goeasy123

Shelflife wrote: »

You can focus on the price per kg of sirloin or fillet and compare it to the carcass price that the farmer gets but you may as well be comparing champagne to the price of grapes.

Ive worked in the meat industry and in retail, some of the stuff on here is pie in the sky stuff.

I remember days in our meat factory where we had orders to beat the band for hindquarter but couldnt sell forequarter for anything we were nearly giving it away just to get it out of our stores, the same with fat we made no money at all on it.

So to take the price of sirloin and say that the factory was raping the farmer would be disingenuous.

The hello money to get your product on the shelf is I believe illegal now.

Ive never heard of 40% margins on meat in supermarkets and ive never heard of full sale or return on red meat either.


The margin in the retail area that I work in is approx 25% if I dont sell all the product then I am at the loss for it so your actual margin is lower than that.

Im not sticking up for the factories or the retailers just pointing out some of the inaccuracies in some of the posts.

Farmers deserve a fair price for quality product, but you cant compare the carcass price per kg to the price of a prime cut per kg

Completely agree shelflife. Roughly 11-12% of a carcass is prime steak cuts. After that you're down to roasts & forequarter beef.

Risky business a farmer going down the route of waiting 60+ days to hope to be paid for all their product. BPM is talking about shipping beef & payment after the fact. A lot to be said for Larry paying on the day then. The level of credit to be carried by a plant slaughtering 300 cattle a day for 5 days a week + staff + everything else is massive. Very difficult to get on & stay on that wheel I'd say.