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What goes into the cost of meat?

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In simple terms, the cost of meat is primarily from three sources.

The Animal,

The Processing,

The Transport.

The Animal

The cost of the animal can be determined by the “sale yard’ price, where farmers sell their livestock to other farms, meat wholesalers and supermarket chains. However, this price often does not reflect the costs to the farmer to breed, grow and raise the animals for sale.

Wholesale markets currently for beef, lamb and goat are down by half, compared to December last year, that is to say, a farmer is being paid $50, for an animal that cost $100 just over six months ago.

Unlike many other industries, farmers seem to be one of the few who can’t easily pass their costs onto the consumer. Most sell to intermediaries who buy at rock bottom prices, then sell to the consumer at full retail price.

This “Value Gap” is what we’re trying to address with the Farmer to Fridge platform.

The costs to the farmer include feed, livestock, fencing, general farming costs, mortgages, wages, and all the other general costs associated with running a business.

The Processing

Processing refers to the costs of turning the animal into meat. This includes the Abattoir, and also the butcher. Sometimes a business with do both “processing” and “butchering”. Unfortunately over the last 5 – 10 year, many small scale processors have shut down leaving local farmers with few options. Some farmers currently drive hundreds of kilometers to get their cattle processed. This adds additional cost and stress to the cattle.

Limited local processing options also helps to restrict small farmers from accessing retail markets. Some farmers are restricted on how much meat they can sell, purely due to their abattoir capacity.

We hope to bring change to the industry and re-establish demand for local smallscale processing facilities.

The Butcher

Butchers make up the other half of the processing equation. Turning a full side of beef into the familiar and accessible steaks and mince you buy ever day 🙂 A good butcher is essential for a good customer experience. Typically butchers will charge a per/kg rate of between $2 and $4 to the farmer for their work.

Butchers are responsible for how the meat is cut and packaged, so presentation and the final customer experience comes down to the professionalism of the butcher!

The Transport

A lot of transport goes into meat!

Using beef as an example, the cow must go

  • From the farm to the processor
  • Processor to butcher
  • Butcher to customer!

With Farmer to Fridge your meat will generally have less “Cowlometers” than with the supermarket, as processing, butchering and transportation isn’t done through central hubs.

In fact, in my local Adelaide Hills area, it’s possible to get meat that has gone less far than my daily commute!

Unfortunately, transport has a cost, and with fuel prices going up and up, some of these costs are passed onto the farmers and customers in the way of higher meat prices.

A summary

The cost of meat is a complex interaction of Farmers, Wholesalers, Processors, Butchers and Couriers.

With Farmer to Fridge, you’re buying directly from local farmers, so your money stays local and help support local businesses. You’re also buying close to the source so you’re money is being paid to the people who do the work, not faceless wholesale corporations. About 95% of the money spent through Farmer To Fridge is paid directly back to farmers.

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