How to Sell Beef Cuts
There are many ways to sell beef. The most common avenue to market is selling your animals at auction to a major wholesale buyer (aggregator). However, many Farms and Ranches, also sell directly to Buyers under their own brand, whether it’s selling quarters, halves and whole beef, selling beef cuts or pushing various cuts in a Bundle Box. There is a wide variety of options to consider - each with their benefits and challenges.
Evaluate what works best for your business, based on your goals and objectives, and the expectations of Buyers in your target market. Product selection, package sizes and fulfillment options may differ depending on your ambitions.
When selling direct, many Farms initially start with selling quarter, half and whole beef to a small subset of customers with a chest freezer (note, less than 3% of the US population own a chest freezer). Other Farms and Ranches may offer beef cuts and bundle boxes to anyone with an appetite for pastured proteins. What’s the most logical and profitable choice for your Farm? First, it's important to understand what is worthwhile for your Farm business and your target Buyers.
What Sales Avenue Offers the Most Attractive Price?
Selling at Auction
It is typical for cattle to be sold at auction to be fattened and harvested by major Processors and sold to Major Distributors or Wholesale Buyers at the lowest price. The intrinsic nature of the Auction model is product commoditization, efficiency at high volumes, and offering the slimmest profit margin (if any) to the Farms and Ranches who breed and raise these animals. Additionally, cattle sold at Auction have a very dismal end of life, without dignity or respect.
The Auction model offers the easy benefit of moving a lot of product, without much effort by your Farm. The biggest challenge is the inability to set your own prices, no appreciation for product quality, and the disconnect with Buyers.
Selling Direct-to-Market
In direct-to-market Sales, the animals are owned and grown by independent Farmers. The animals are then harvested and processed by a local USDA or State Processor, with the original Farmer still maintaining control over their products when sold to Buyers. In a Direct-to-Market model, your Farm can sell at a premium price to Wholesale or Retail Buyers who appreciate your product quality and the relationship with a local business owner (increasing Brand loyalty).
The Direct-to-Market model offers the most attractive price point and the opportunity to maximize your Farm profits. However, the biggest challenge is building and maintaining your customer relationships and being responsible for managing Buyer orders and fulfillment.
Should you use a Standard Cut Sheet or a Custom Cut Sheet?
If your Farm sells direct, or is contemplating a shift direct-to-market, the easiest entry point is selling beef by the Quarter, Half or Whole animal. However, cut sheets are not well understood by the general public and can negatively impact your Sales.
Standard Cut Sheets eliminate confusion with Buyers, making their purchase experience simple. This is especially important when selling Direct-to-Market, as the Farmer does not have time to explain every beef cut to Buyers. A Standard Cut Sheet should lay out the most popular cuts that a Buyer will receive from the Butcher when buying a Quarter, Half or Whole animal. Your Farm should not offer any deviation from a Standard Cut Sheet, unless the Buyer is willing to pay a premium (e.g. a $100 surcharge for a Custom Cut Sheet).
Read: Streamline Cut Sheets
With a Custom Cut Sheet, a Buyer will break down their butchering preferences when purchasing a Quarter, Half or Whole beef. The Buyer must understand the nuances of a Cut Sheet and manually fill out a form detailing their preferred cuts for a Butcher. Typically, a Custom Cut Sheet costs more, and some Butchers may refuse to deviate the processing for a small order.
Given that 99%+ of Buyers are unfamiliar with a Custom Cut Sheet, your Farm is best off limiting options to a Standard Cut Sheet altogether. You’ll increase Buyer conversion, save time (avoiding lengthy Cut Sheet explanations), and simplify the entire process for your Butcher.
What are the Alternatives to Cut Sheets?
Specialty Cuts
Specialty Cuts is the practice of selling individual products (e.g. a T-bone Steak) to the Buyer. Many Farms selling direct, assume that Speciality Cuts are required to compete with your local grocery or wholesale outlet. However, Speciality Cuts are overwhelming to manage, and may compel your Farm business to invest a Freezer to manage all the inventory.
Speciality Cuts are typically only worthwhile for well-known Primal Cuts of Beef (e.g. Ribeye, Filet Mignon), where Buyers are willing to pay a premium. Buyers will be more familiar with their names, and you will not overwhelm them with a vast selection from getting too specific.
If you choose to sell Secondary Cuts, it is strongly recommended to move them in Bundle Boxes or as ground beef. Secondary Cuts are foreign to many Buyers and may be overwhelming for customers who may not be as familiar with their preparation (leading to lower Sales conversion).
Bundle Boxes
Only 3% of Americans have a Chest Freezer, so you cannot always rely on Sales of Quarter, Half or Whole beef. Bundle Boxes provide the greatest return to Farms selling direct, to move more product and increase their profit margins (selling at a premium).
Our most successful Farmers offer an assortment of Bundle Boxes to cater to various household sizes - 1, 2 and 4-person families (each are about ⅓ of American households). Typical Bundle Box sizes include 10, 20 and 40lb boxes (with a 25lb box being the most popular). Bundles can feature various Primal Cuts as an inducement to purchase, along with a mix of Secondary Cuts and Ground Beef. This allows Buyers to purchase something familiar and try new ones.
On average, you can move a whole animal by selling 30-40 Bundle Boxes. It is up to your Farm to set a cadence, typically anywhere from bi-weekly to monthly. Top-performing Farmers align their Processing Dates with their fulfillment schedule, to streamline their delivery day labor and stay out of the freezer business.
Subscriptions
Loyal Buyers are keen to purchase a Bundle Box on a recurring basis (aka a Subscription). This offers your Farm the opportunity to build a base of recurring revenue, while providing Buyers with consistent, ongoing access to your products. You can sell Subscriptions to align with your Processing Dates to ensure all of your product is pre-sold, and your beef is ready to move.
Entice your Buyers by offering Primal Cuts in every Subscription box. Offer Deliveries and Pick-ups that are convenient for both your Farm, and your Buyers. Most Farms charge a Delivery Fee to make their fulfillments worthwhile (and customers see the value in paying for convenience).
Pre-Orders
Offer your Quarter, Half and Whole animals for Pre-Order before they go to the Processor. You can secure deposits well ahead of time, paying for the animal before it is harvested. You can market to Buyers that they must Pre-Order to guarantee access to your meat - building FOMO (the Fear-of-Missing-Out), and increasing hype for your products.
With Barn2Door, you can Sell by Weight and estimate prices for these products prior to processing. Then, you can reconcile based on final weight or price, offering transparency with Buyers, while maximizing the profits on your products.
Simplify your final payments for your beef with Barn2Door. You can accept final charges via credit, debit, cash or check on the platform. No matter how you choose to sell your products - as Quarters, Halves or Whole animals, or broken down by Speciality Cuts or Bundle Boxes - you can tailor your Sales to your Farm and Buyers.
Conclusion
Selling beef cuts Direct-to-Market is one of the most profitable avenues for your Farm or Ranching business. Offering a variety of beef cut purchase options for your Buyers can help you move more product, increase sales and access more customers. When you use software to streamline Sales, offering Subscriptions, Pre-Orders and Sell by Weight, your Farm operations will become more efficient.
Barn2Door offers software for Independent Farmers to create and promote their brand, sell online and in-person, and save time managing their business. If you’re curious to learn more, watch this 5-minute video.