Butchers near the breadline

Press, Volume CXV, Issue 33783, 4 March 1975, Page 20

Butchers near the breadline

A perennial complaint of housewives is that the cost of meat is too high in butcheries. Although housewives recognise that beef has never been so cheap there is still an undercurrent of opinion I that retailers are doing better out of it than anyone else. There are allegations that butchers at present are buying their beef cheap at auction for about 32c a kilogram. preparing it for next to nothing, and recouping business losses by putting beef cuts in the window at prices ranging from 77c a kilogram for mince to $3.08 a kilogram for fillet — and having the gall to advertise these prices in local newspapers as “cheap meat, cheap meat, hear all about it.” Butchers say quite openly [that their beef prices during [the last few weeks — and [even now — are the cheapest they have been for [years. They also say without any hesitation, that prices of beef can only move upward from about now on. MARGINAL A look into the butcher's costs, however, presents a picture that is more in the butcher’s favour than the [housewife might like to concede. It shows that the man who knows his stock and is able to buy a beast and have 1 it killed and processed for the home freezer, is doing 1 only marginally better at the

[ present time than the houseiwife who buys the same carcase from the average local butcher. Let us take the actual case of a man who regularly attends the Addington stock [market and is in the habit of selecting a beast for the 'home freezer. His breakdown of costs i runs as follows: one steer bought this week at AddingIton auction, $106; abattoir 'killing charges (including ; cartage to abattoir), $13.05; cartage to butcher’s for processing. 52.30; processing at 7c per lb, $38.50 — a round total of $l6O. NINE CUTS Divided by the beast’s weight of 5501 b (a popular weight), the cost to him to get it to the stage where it was boned, rolled, and cut ready for use by the housewife as nine different beef cuts was about 64c a kilogram (29c per lb). However, if he were prepared to buv a “heavy” beast he could_ trim this figure to about 25c per lb. His processing was done [by a friend, and the charges ■were slightly under the amount normally charged for processing — a figure [given by Canterbury Frozen [Meat Company, and widely iconfirmed by sole-charge ■butcheries, as between 16.5 c ['and 22c a kilogram. If the same beast were bought at auction by a butcher or group buyer for > butcheries at a cost of $lO6 (43c per kilogram) the same ; abattoir charge would apply — $13.05 (5.2 c a kilogram).

■ But the butcher at this < : stage puts his kilogram i [charge at 10c, not 5.2 c. He| [says that as well as abattoir' I costs he has to pay another 15c a kilogram on his beast 'for paddocking, loading, (booking, handling, bagging offal, and cartage. When the beast arrives ini i the shop it costs him another 18c a kilogram to process it. To that stage the man: (buying and preparing a :beast for the home freezer! [has run about equal to the I butcher in costs encountered. It has cost the butchler 71c a kilogram; it has cost the home economist about 64c a kilogram. On top of this price, butchers pay, they must absorb overhead costs of up to 38.3 c a kilogram. This is the figure arrived at in one city [butchery by dividing last [year’s overheads by the total inumber of kilograms of 'meat sold. This estimate has [been described as “very [fair” by two suburban butchers.’ MARK-UP It is only fair that the • butcher covers his overheads Lin his mark-up, and to do iso means that he has to “charge an average price of $1.09 for a kilogram of meat. Taking a range of nine different cuts of beef meat sellring this week at five Christchurch retail outlets, 15 of “the 45 are selling at below L break-even level. ’■ The remainder are selling '[at an average price of $1.60 ; a kilogram. h The five butcheries from ‘which the examples are

taken comprise two retail shops which are each part of butchery chains, a supermarket, an inner-city butchery, and, a suburban butchery-.

When the housewife sees mince retailing from 77c a kilogram, roasts from 86c. stewing steak from 77c, she will know that these are prices at which the butcher is hot breaking even and prices above which he cannot afford to charge without losing customers. ON THE HOOK When she sees other cuts selling for anything around $1.60 a kilogram she might reasonably assume that the butcher is making up on these cuts what he is losing on his cheaper cuts. Even charges on bulk freezer beef do not cover costs. The costs of getting the beef to the “on-the-hook” stage in the butcher’s shop —including the cost of overheads—come to 9lc a kilogram. Average nrices for bulk; freezer beef in four city ‘butcheries are 69c a kilogram—for a side of beef The president of the Can[terbury Meat Retailers' Association (Mr R. J. Collins' [commented on costs and [prices: “It makes you won- ; der how we can do it, doesn’t it?” FIGHTING HARD Having reluctantly admitted that the butcher is fighting as hard to make ends meet as the housewife, the best thing the housewife can do is to believe the butchers when they say that

now is the best time to buy beef, and the last few weeks would have been better.

Butchers say that the price of beef can only rise from now on. -

Killing figures have dropped over the country as farmers hold back stock from slaughter to gain higher prices under the increased beef export schedule to be offered in l October, and lower supply means higher bidding prices for beef at auction.

Not only that, but the increased export beef schedule, offering as it will prices 70 to 100 per cent higher for the farmer, will put butchers into competition with the export market for beef supplies.

The farmers will still sell to butchers at auction, but butchers will also have to bid 70 to 100 per cent higher to get any beef at all. because farmers will have no hesitation in selling to the market offering the highest return—-the export market. The farmer's predicament is another story of woe.

The farm management department of Lincoln College nuts the farmer’s loss per beast after buying a weaner. and wintering and selling it at $27; and after buying a yearling, and wintering and selling it, at $l3.

After losses of this kind the farmer will have no compunction in forgetting the local market altogether if butchers cannot equal export prices.