Supermarket margins

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.

wrangler

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

I'd have a lot of respect for the way that ICM is selling our lamb anyway, The effort that bord bia and the factory is putting in to moving circa 40000 cattle per week isn't simple either, Farmers giving over €100 for a calf and then expecting the processors to stand on on the same stupid price is irresponsible.

Water John

What I said earlier is, if you want to have transparency, list out all the cuts and the retail price. We can then factor in any problems like, cheaper cuts not selling that well and having to be converted into mince. Otherwise this discussion is about hunches and opinion not based on facts.

BTW the divergence since 1980 of the farmer and retail price is based on published analysis by Con Lucey, Chief Economist of IFA at the time.

Buford T. Justice XIX

Goeasy123 wrote: »

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.

This is where the BPM is going to struggle. They may make it work for a while, they may even make money while building up a customer base.


But at some stage, Larry and friends will decide they're gone far enough and undercut the price of beef charged by BPM to its customers and leave BPM with beef in stores with no customers and a large amount owed to anybody dealing with them.

wrangler

Buford T. Justice V wrote: »

This is where the BPM is going to struggle. They may make it work for a while, they may even make money while building up a customer base.


But at some stage, Larry and friends will decide they're gone far enough and undercut the price of beef charged by BPM to its customers and leave BPM with beef in stores with no customers and a large amount owed to anybody dealing with them.

Hence my comparison to the newbie around the ring at a mart, BPM would be irresponsible to leave farmers waiting for money, don't think there's any export guarantees nowadays
Insist on payment on the day and no one gets burnt

Water John

Bought a piece of beef in Lidl yesterday, Hereford roasting joint @ €12/kilo. Beautiful roast and gravy today. Supplied by Liffey Meats, hope the farmer supplying got a bonus.
The're the type of link ups, with a chain, BPM would have to put in place, at home and abroad.

Green farmer

The other thing I don’t see mentioned here is how the factories are controlling the prices paid to farmers. Any time there’s a hint of a shortage they pick up the phone to their feedlots. Pretty sure I read recently that near 1 in 5 cattle slaughtered now comes from a feedlot.

EvanFahy

Estimated retail value of a 1,200 lb steer
1200 lb steer, half-inch of fat, 750 lb carcass

490 lb boneless trimmed beef
150 lb fat trim
110 lb bone

What is expected out of the 490 lb of boneless trimmed beef?
185 lb ground beef
85 lb round roasts, steaks
90 lb chuck roasts steaks
80 lb rib and loin steaks
50 lb other cuts (brisket, short ribs, skirt steaks)

I figured that all this sold at a good butcher would be around €4,000
and this is excluding hide, a portion of fat and offal

Now I'm not even going to get into the price of the value-added products such as burgers, wraps, stir fry, meatballs, etc but you could figure it would be more

These figures could be wrong and I hope that if you see a mistake or disagree you will let me know as I would like to get them as accurate as possible

Fact: Before and payments from the state the average farm that brings at least 70% of their stock to slaughter, makes a loss of €97 a hectare

Fact: Ireland exports roughly 90% or 537,000 tons of beef per year

Lady Haywire

Where are you going with that post?

Could you not at least convert to kg from your copy & paste?



https://extension.sdstate.edu/how-much-meat-can-you-expect-fed-steer

EvanFahy

Will do it was something I had taken down in my notes months ago, couldn't find any Irish publication stating the price a bullock grosses at retail so I had to look farther afield that's why it was in pounds.

Lady Haywire

EvanFahy wrote: »

Will do it was something I had taken down in my notes months ago, couldn't find any Irish publication stating the price a bullock grosses at retail so I had to look farther afield that's why it was in pounds.

Yes, but what was the intention of your post.