Mythbusters, The Meat Market
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Mythbuster Monday: highway robbery at retail

We suspect many cattle producers have walked into a grocery store, seen a CAB® brand filet mignon priced at $25/lb., and were tempted to call the police to report that the grocer was committing highway robbery.

Myth: Retailers are ripping us off with those high-priced tenderloins, based on our steer prices

Fact: Cutting demonstrations and math show how the high-quality but tiny muscle pricing adds up correctly.

CAB’s Dr. Phil Bass and VP Mark Polzer consider the pricey tenderloin…

CAB® brand filet mignon at $25/lb. —  How can that possibly be when fat cattle are bringing $1.25/lb.? A little math reminds us how that premium cut of filet mignon, the most desired cut on the beef carcass, gets priced so high.

First we need to remember that the $1.25/lb. price is for the live weight of the finished steer. Most fed steers will produce a carcass that is about 63% of their live weight, so that $1.25 divided by 63% gets us to $2/lb. carcass
weight. Now for the tenderloin: in an 850-lb. carcass, we would typically only get 12 lb. of tenderloin (1 per side weighing about 6 lb. each). This week, CAB tenderloins were bringing about $10/lb. So a cut that represents about 1.4% of the weight of the carcass actually accounts for about 7% of the value.

Now, suppose you bought those two 6-lb. tenderloins and starting cutting steaks. You might be disappointed to learn that those 12 lb. actually yield 3 lb. of trim (think hamburger), 5 lb. of medallions (not big enough for a true center-cut filet mignon), and 4 lb. of those beautiful center-cut filet mignons. You paid $120 for the 2 tenderloins.

The 3 lb. of trim is worth about $2/lb. and the 5 lb. of medallions are worth about $6/lb. Add those up and you only have back $36 of the $120 you spent. That leaves $84 worth of center-cut steaks weighing 4 lb., or about $21/lb. (!!!)

 

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Ride along with the Certified Angus Beef supply development team as we work to help cattlemen put more black ink in their record books with cattle management news, tips and ideas to profitably improve quality. CAB is a nonprofit subsidiary of the American Angus Association. It was founded in 1978 as the first fresh beef brand based on specifications, and remains the largest in the world. We spend every day working with cattlemen and women across the country to help them better supply the CAB brand with high-quality beef. Join us for a view from many a pickups' passenger seat.
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