Are you curious about the cost of beef on the rail?
With the increasing popularity of farm-direct beef shares, it’s important to understand the factors that contribute to the final price.
From the weight of the animal to the cost of butchering, there are many variables to consider.
In this article, we’ll take a closer look at the price of beef on the rail and what it means for consumers.
So, grab a cup of coffee and settle in as we explore this topic in-depth.
What Is The Price Of Beef On The Rail?
The price of beef on the rail refers to the cost of the animal before it is processed into individual cuts of meat. When purchasing beef directly from a farm, consumers typically buy a fraction of the cow, such as a half, quarter, or eighth. The price they pay for the animal is based on its rail-weight, which is the weight of the carcass after it has been dressed and prepared for processing.
The cost of beef on the rail can vary depending on several factors, including the weight of the animal and market conditions. According to Canfax, a Canadian market analysis company, fed cattle prices have been steadily increasing over the past 10 weeks. As of this writing, the Canfax fed steer and heifer price is around $197.50/cwt.
When purchasing beef shares directly from a farm, consumers may also need to factor in the cost of butchering. Butchers are facing higher labor and packaging costs, which have led to an increase in their rates. For example, kill charges for butchering an animal have gone up from $85 per head to $125-$150 depending on the size of the animal. Cut and wrap charges have also increased from $0.72-$0.75/lb hanging weight up to $0.85/lb hanging weight.
What Does On The Rail Mean?
When discussing the price of beef, you may come across the term “on the rail”. This refers to the cost of the animal before it is processed into individual cuts of meat. Essentially, it is the weight of the carcass after it has been dressed and prepared for processing. This term is often used when purchasing beef directly from a farm, where consumers typically buy a fraction of the cow, such as a half, quarter, or eighth. The price they pay for the animal is based on its rail-weight, which can vary depending on factors such as the weight of the animal and market conditions. It’s important to keep in mind that when purchasing beef shares directly from a farm, consumers may also need to factor in additional costs such as butchering fees.
Factors That Affect Beef Prices
Several factors can affect the price of beef, both at the retail level and on the rail. One of the most significant factors is the supply and demand of beef. When there is a shortage of beef due to factors such as disease outbreaks or weather events, prices tend to rise. Conversely, when there is an oversupply of beef, prices tend to fall.
Another factor that can affect beef prices is the cost of production. The cost of feed, labor, equipment, and other inputs can vary depending on market conditions and other factors. For example, if the cost of feed increases due to a drought or other weather event, producers may need to charge more for their beef to cover their costs.
Consumer demand is also a significant factor in determining beef prices. When consumers are willing to pay more for beef, prices tend to rise. This can be influenced by factors such as income levels, taste preferences, and media coverage of beef-related issues.
Finally, government policies and regulations can also impact beef prices. For example, tariffs on imported beef can make domestic beef more expensive, while subsidies for feed production can help lower costs for producers.
Understanding The Cost Of Butchering
When it comes to understanding the cost of butchering, it is important to know that there are several factors that can affect the final price. The cost of the live animal is just the beginning, as there are additional costs involved in processing and packaging the meat.
For example, when purchasing a live animal, the cost per pound is typically calculated based on the animal’s weight. However, once the animal is processed, there is a reduction in yield due to factors such as the amount of fat on the animal, the type of cuts requested, and whether or not bone-in or boneless cuts are preferred.
According to former Animal Science professor Dr. Christopher Raines, when converting an animal into a carcass, the average percentage of yield for pork is around 70 percent, beef 60 percent and lamb 50 percent. Turning that carcass into individual cuts of meat, bone-in cuts typically have a yield of 75-80 percent for pork, 65-70 percent for beef, and 70-75 percent for lamb.
It is also important to note that aging and further processing can decrease the final product weight due to moisture loss from evaporation or heat processing during curing.
When purchasing beef shares directly from a farm, consumers may need to factor in additional costs such as slaughter fees. These fees can range from $85 per head up to $150 depending on the size of the animal.
The Role Of Weight In Beef Pricing
The weight of the animal plays a critical role in determining the final quantity of beef tonnage available to consumers and the cost of beef on the rail. The hanging weight, which refers to the weight of the carcass after being harvested, is used as a basis for pricing beef shares. Typically, the hanging weight is around 60% of the live weight of a well-finished steer. However, every animal is different, and several factors can affect the yield percentage.
Factors such as the animal’s age, breed, and diet can impact its weight and affect the final yield of beef. Overly finished animals may have a lower hanging weight to packaged meat yield because more is trimmed off. Conversely, if there isn’t enough fat, the yield is also lower because there is more bone per fat/muscle. The dressing percentage can also vary depending on whether the cuts are bone-in or boneless.
As a general rule, consumers can estimate that approximately 55-60% of the hanging weight will be actual beef in their freezer. However, this is just an estimate, and it’s important to keep in mind that every animal is different. Therefore, it’s essential to work with a reputable farmer or butcher who can give accurate estimates based on the specific animal being purchased.
Comparing Prices: On The Rail Vs. Retail
When it comes to purchasing beef, consumers have several options, including buying it on the rail or at a retail store. Buying beef on the rail refers to purchasing the animal before it has been processed into individual cuts of meat, while buying it at a retail store means purchasing individual cuts of meat that have already been processed.
The cost of beef on the rail is typically lower than the cost of beef at a retail store. This is because the cost of processing and packaging the meat is not included in the price. However, consumers who purchase beef on the rail will need to factor in the cost of butchering, which can vary depending on the butcher and the size of the animal.
On the other hand, purchasing beef at a retail store means paying for the convenience of having the meat already processed and packaged. According to a recent study by Market Track, consumers are more likely to research prices online before making a purchase in a physical store, especially for higher-priced items like electronics and major appliances. This suggests that convenience is not always the most important factor when it comes to purchasing beef.
In addition to convenience, retailers may add additional components like availability and service to justify higher prices. However, retailers need to use structured pricing data to ensure they are still competitive in the market. This is because consumers can be swayed by even small price differences and are quick to compare prices and discuss service with peers.
Making Informed Decisions As A Consumer
As a consumer, it is important to understand the factors that can affect the cost of beef on the rail and the final price of individual cuts of meat. When purchasing beef directly from a farm, it is essential to consider the weight of the animal and market conditions, as these can impact the overall cost. Consumers should also be aware of the additional costs associated with butchering, such as kill charges and cut and wrap charges.
It is important to note that there are several variables that can affect the final yield of finished product, and therefore the cost per pound of meat. For example, the type of cuts requested, whether bone-in or boneless, can impact the total pounds of product returned from the butcher. Additionally, the type of animal being processed can also affect the percentage of product ultimately received.
To make informed decisions as a consumer, it is recommended to gather information from multiple sources and compare prices and services. Consumers may also want to consider purchasing meat from farms or butchers who prioritize animal welfare and sustainable practices. By understanding the factors that affect the cost of beef on the rail and the final price of individual cuts of meat, consumers can make informed decisions that align with their values and budget.