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Pork butt prices heading towards $2/LB
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Harry Nutczak
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PostPosted: Mar 13 2014    Post subject: Pork butt prices heading towards $2/LB Reply with quote

My latest butt order was $1.57/LB Edited: Oops, make that $1.59/LB
And I was told that next week to expect at least $1.77/LB for butts

Brisket (choice or higher) $2.99/LB
Choice (112A) Ribeye $7.21/LB

So, get ahead of the game if you can, I do not see prices coming down anytime soon.

We are taking a scheduled break after this weekend for 4-6 weeks, I'll watch what the prices are doing in April and make my decisions on what's going to happen at that point.

This is not pretty at all.

Maybe that offer to purchase that I had is looking like a better idea right about now...............?
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Texman
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PostPosted: Mar 14 2014    Post subject: Re: Pork butt prices heading towards $2/LB Reply with quote

Harry Nutczak wrote:
My latest butt order was $1.57/LB Edited: Oops, make that $1.59/LB
And I was told that next week to expect at least $1.77/LB for butts

So, get ahead of the game if you can, I do not see prices coming down anytime soon.


Our business is pork from farm to fork. What is odd is that weekly swine slaughter for the past couple of months, and projected is only 2% to 3% below weekly slaughter the same dates a year ago.

The overall perception is the market is being driven by commodity traders based on emotion rather than facts.
Look at futures: http://www.cmegroup.com/trading/agricultural/livestock/lean-hogs.html

There will be a shortage of pork to the point that some kill plants will have to revert to a 4 day work week, but the shortage is not here yet.

As to beef - a lot of groceries and restaurants are purchasing and successfully using Mexican beef, at a more profitable price.
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Harry Nutczak
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PostPosted: Mar 14 2014    Post subject: Reply with quote

I've had some spectacular Canadian beef and pork bellies,
But I am not going to screw around with brisket out of Mexico,
We only use usda choice and prime graded briskets,
If my break needs to be longer than 4-6 weeks by accepting the offer to purchase, than so be it, it'll give some more time to do things before I get too old
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browe
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PostPosted: Mar 16 2014    Post subject: Reply with quote

Sysco hit 3.04/lb this morning on our briskets. Butts are going up .06 per pound per month based on conversations I had last week with a manufacturer. Sysco is 1.56 this morning on butts. Sam's is close to that.
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nskitts
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PostPosted: Mar 19 2014    Post subject: Reply with quote

I have given thought to informing customers that we may have to adjust prices on a sliding scale due to skyrocketing costs of beef and pork. At least this would be somewhat of a marketing technique that lets the customer know that this is a fresh product that is bought from a dynamic market, not a canned fixed price product.

I have not implemented this but I am thinking hard about it.
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Harry Nutczak
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PostPosted: Mar 20 2014    Post subject: Reply with quote

Hopefully this all blows over shortly, But I doubt it.

We see prices rise, and there are reasons for it. But when the market can reflect lower pricing, that never seems to happen as fast as the rise.

One day left, and it's break time for me. I'll be keeping an eye on prices during that time and be ready to adjust mine to fit.

One thing I have learned;
it is better to raise prices accordingly and continue with your stellar product than to try and keep prices lower by dropping quality and portion sizes.

In June 2013, I raised all my bulk side item pricing by 50% per pound, and I have had zero backlash over it.
50 fricking percent!!! Thats huge.
But my raw and labor cost had risen, so I had no choice
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Poppa's PTL Club
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PostPosted: Mar 26 2014    Post subject: Reply with quote

Harry Nutczak wrote:
We see prices rise, and there are reasons for it. But when the market can reflect lower pricing, that never seems to happen as fast as the rise


That's natural and if you will examine yourself, you probably do the same thing. You can't operate at a deficit for long and will hold on to higher prices as long as the market will allow it.

As for the rise, a lot of the rise is due to a new pork disease called PEDV. There are serious concerns about not just higher prices, but the possibility of shortages, as the entire herd loss may top 17% before this thing works itself out. So far, there are no controls or protocols in how to deal with this thing and it has a 100% mortality rate in the piglets it infects.

You'd better get your strategy in place now to ride this thing out
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Mr Tony's BBQ
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PostPosted: Mar 26 2014    Post subject: Reply with quote

Monday Morning 3/24/14 I checked with my supplier...Pork Butts - bone in $2.15/lb Shocked was told to expect the rise to continue...Was at Costco and their boneless was the same price, butcher checked todays order and said it was going up ...so I bought them out of cases for $0.02 per pound less case price....Already re-did menu pricing for this spring a couple weeks ago, hadnt changed pricing at all from 2012 to 2013 so I went up $0.50 / sammie, looks like that wont be enough if this continues!!! Was paying $1.09 last fall!
Angus Brisket is at $3.03 as of my posting Evil or Very Mad
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Harry Nutczak
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PostPosted: Mar 27 2014    Post subject: Reply with quote

Mr Tony's BBQ wrote:
Monday Morning 3/24/14 I checked with my supplier...Pork Butts - bone in $2.15/lb Shocked was told to expect the rise to continue...Was at Costco and their boneless was the same price, butcher checked todays order and said it was going up ...so I bought them out of cases for $0.02 per pound less case price....Already re-did menu pricing for this spring a couple weeks ago, hadnt changed pricing at all from 2012 to 2013 so I went up $0.50 / sammie, looks like that wont be enough if this continues!!! Was paying $1.09 last fall!
Angus Brisket is at $3.03 as of my posting Evil or Very Mad



Argh.
Lets look at the math here;
At a 50% yield (if your lucky) that makes your pork cost at $4.30/LB So to get a 30% cost ratio on pork alone (no rub, no sauce, or bread) your selling cost will need to be more than $14.33/LB

This is going to be ugly in many different ways
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Mr Tony's BBQ
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PostPosted: Mar 27 2014    Post subject: Reply with quote

and I am starting off my season at the Kentucky/Indiana boarder where I know one at least one guy is selling 1/4 pound sammies for $4.00.....not pretty at all!!
Just paid $3.15 for custom made "Jalapeno Cheddar brats" from local butcher, only ordered 50 pounds.....shoulda ordered 200#!! They freeze just fine, but its too late.....He got the same pricing for shoulder as I did as of yesterday.....
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Harry Nutczak
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PostPosted: Mar 27 2014    Post subject: Reply with quote

To compensate what I am going to be forced to sell pork for, It looks like I'm going to go into some other cuts of beef for this summer for a better costing item compared to brisket,

I've used clod in the last for a shredded beef and I was very impressed with how it came out. I did use a "Texas Crutch" to get the texture that I wanted though.

Tri-Tip went over spectacularly here when I did it as a special to move half a case of it from a wedding overage .

I'm already ay $8.75?LB for our bacon that we produce, I don't think the market will tolerate much more than that.
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SoEzzy
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PostPosted: Mar 27 2014    Post subject: Reply with quote

A couple of places down here are running chuck roll for sandwiches, instead of clod.
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Shotgun Petes
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PostPosted: Mar 30 2014    Post subject: Reply with quote

I have been successfully selling my smoked meats for $9 per half-pound and $18 per pound for quite some time. This includes pulled pork, beef brisket, boneless skinless chicken breast meat, sliced smoked sausage and rib tip meat.
All our sandwiches are priced at $7 for aprrox 6 oz of meat on a bun. Very few complaints over prices. If you have good BBQ people don't mind paying for it.
The price increase on pork is definitely having a negative effect on the bottom line though. Wonder when or if it will go back down.
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Harry Nutczak
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PostPosted: Mar 31 2014    Post subject: Reply with quote

Shotgun Petes wrote:
I have been successfully selling my smoked meats for $9 per half-pound and $18 per pound for quite some time. .


I already have people freaking out at $10.50/LB for pulled pork,

I guess im going to need to start marketing our pizza more heavily, then when that gets out of control, can I expect hard wheat, cheese, & tomato prices to soar again?
Probably!
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Mr Tony's BBQ
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PostPosted: Mar 31 2014    Post subject: Reply with quote

3/31/14 5:.02 an bone in butt $2.19
angus brisket $3.09
as of 3/31/14 Wholesale.....
Evil or Very Mad Evil or Very Mad Evil or Very Mad Evil or Very Mad Evil or Very Mad Evil or Very Mad Evil or Very Mad Evil or Very Mad
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Poppa's PTL Club
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PostPosted: Mar 31 2014    Post subject: Reply with quote

Harry Nutczak wrote:

I already have people freaking out at $10.50/LB for pulled pork,


When I opened in 2012, I set pricing a little high at $10.99/lb to avoid having to raise prices (and also to seem like a great guy when I gave people an imprompteau price break).

Fortunately, some of my fixed costs are very low, I don't believe in borrowing, so I am not a slave to a lender and we are in a crazy growth mode, so I'm going to hold off on any serious price increases as long as I can and just take lower margins. That's really only possible because I don't rely on income from the restaurant to pay the bills, so I'm in a little different situation than most owners
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Harry Nutczak
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PostPosted: Apr 01 2014    Post subject: Reply with quote

My latest pricing from our meat supplier
03-31-2014;

Choice Ribeye $7.17/LB
Select Chuck Roll $2.79/LB
Choice denuded inside rounds $4.29/LB (jerky meat)
Choice, Whole, Beef Brisket $3.09/LB Flats, $4.89/LB
Fresh Pork butts, Bone-in $2.15/LB Boneless $2.17/LB
Pig Ears, (frozen 30# case) $2.89/LB (doggy treats)
Pork Ribs, St. Louis $2.77/LB Full Spare $2.17/LB
Fresh skinless Bellies $3.23/LB
Pork Back ribs $3.39/LB
Rib Tips Frozen (brisket bone) $1.49/LB
Sheep Casings 20-22mm $38.99/hank



Maybe I should've opened a pizza place instead.................
Get the lube warmed up people, this is only going to get uglier.

I'm thinking about throwing in the towel after this summer.
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RodinBangkok
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PostPosted: Apr 08 2014    Post subject: Reply with quote

an excerpt from one of my industry reports:

Prices
Hog and pork prices are still so high that they seem unjustified by current USDA inventory numbers. Wholesale pork prices shot to record highs on anticipation of large baby pig death loss, but producers told USDA those losses are not so large.
The average pork cut price is about 50 cents per pound, or 60 percent higher than at the same time last year while pork loins are up 38 cents, hams up 55 cents and pork bellies used to make bacon are up 66 cents per pound.
These are extraordinarily high prices, especially if pork supplies are only down marginally this spring and summer as the USDA inventory count suggests. To maintain these lofty prices some market participants will have to hold to the belief that the death loss was actually much higher than USDA captured in this survey.
Hog prices and lean futures are expected to remain unsettled and potentially very volatile over the spring and summer.
No one knows for sure what the death losses have been, or what they will be in the future. Market participants will watch daily and weekly slaughter rates for signals of what the true death loss was. Even with the nearly $10 drop in summer lean futures in the week after the report, they are still suggesting $89 per hundredweight live prices for the second quarter and $82 for the third quarter.

I think the first sentence speaks for what I've suspected, we had an outbreak of this pedv in 2009, prices shot up, but no where near what you guys are seeing and no where as fast...As small volume users mostly depending on retail markets you are at the bottom of the chain and taking it in the shorts with short term speculation. Take a look at going up the chain a notch or two, with smaller local suppliers and buying more primal cuts. Your not only buying at the bottom of the chain, but a lot of you based on the posts I've seen are buying high value added cuts rather than large primals. This only adds more cost....much more cost actually.

My 2 cents...take it or leave it!!
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Harry Nutczak
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PostPosted: Apr 08 2014    Post subject: Reply with quote

Rod,
I appreciate you sharing the news about pork futures,
I wish I had more time to study the market more and learn where things are going better myself.


My geographical location limits what I have access to from my suppliers.
I am unable to get halved hogs, I am limited to cryo primals or whole roasting hogs, i'm seeing a 30% yield on roasters, 50% on Butts.
Yet my whole hogs exceed $3.00/LB and my butts are at $2.15. So I have lower price, and better yield using primals.

I looked into getting whole shoulders, and they are not available unless special ordered, and I cannot order 2 weeks out because I do not have freezer space if I order too heavy.

bone-in picnics that render about 30% yield are the same cost/LB as my 50% yield butts.
So I am screwed every direction I turn.

My plan to survive better is to market our pizza end of the business more heavily, and hopefully that can bring our bottom line into a better position.
But with my luck, prices for hard red spring wheat will go crazy again like it did 6 years ago and bend me over the pizza make-line with no lube or a reacharound.

I was hoping to add a pressure fryer to the stable this winter, but I could not swing that, but maybe I'll run across a decent one this spring and start doing fried chicken to help ease the pressure on pork.
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PostPosted: Apr 09 2014    Post subject: Reply with quote

Harry - Use this price increase to your advantage. You already have a good following and those who eat BBQ know it is a pricey meal. So adding a couple of dollars per lb probably isn't going to scare a lot of people away. However, when the price goes down you will be able to keep your retail prices the same and make better margin.
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