New Tool Helps Livestock Farmers Price for Profit
Cornell Cooperative Extension of Tompkins County is introducing new features on the Cornell Meat Price & Yield Calculator. The Calculator is improved and updated in order to better serve livestock farmers. The Calculator is part of MeatSuite.com, an online directory of over 240 New York farms that sell meat in bulk quantities directly to consumers.
The Calculator allows farmers to enter farm and channel-specific data and profit goals, then price their meat with the assurance of meeting those goals. These features make the Calculator a vital tool for farmers to create pricing for each marketing channel they use, whether selling whole animals or meat by-the-cut. Farmers must prepare in advance by gathering their current meat prices, invoices from their processor, and the weights of cuts from one average animal in their herd. With this information on hand, the Calculator takes about 10 minutes to use.
The Calculator addresses barriers in direct marketing, most notably that farmers typically underestimate the value of their time. To solve this, the Calculator includes features that enable the user to account for time and set a desired level of profit, either as a percentage mark-up or as a flat dollar-per-head value. In the final step, users adjust the pricing of cuts or whole animals to reach the set goal in each channel. Additionally, the Price Calculator enables farmers to effectively manage inventory through pricing. The “magic” of the site lies in the farmer’s ability to manipulate the prices of individual cuts based on their proportion of a carcass and the degree of consumer demand while maintaining the desired level of profit per head.
New features include an improved cost of production calculation and the ability to split marketing labor and profit for more accurate cost accounting. These improvements mean that farmers can easily break down various costs and come up with an accurate pricing structure to fit the profit they desire. Another new feature on the improved website is a printable/downloadable price sheet – after a farm is finished generating new prices, the site will gather this information in a PDF to print or save.
Effective pricing that accounts for farm labor and profit are key for farm viability. With each use of the calculator, producers can feel confident that their pricing delivers a profit. This material is based upon work supported by USDA/NIFA under award number 2015-49200-24225.
This article was originally published June 26, 2018, in the Morning Ag Clips.