Processing The Devil In The Details

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Processing The Devil In The Details
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Red Meat Processing

• Why cant Red Meat be just like other fully
  substitutable items such as cheese, tomatoes,
  chicken or turkey?
• Devilish Details
• USDA has the highest standards than anyone else
  in the world!!
• http//www.ams.usda.gov/lscp/beef/beefannounce.htm
  
• No one else has these tight of standards
• (not MacDonald's, not the US Military, not the
  Japanese Market, not Morton's, not Ruth Chris, or
  your own school commercial bids!)
• Zero Tolerance for Ecoli in raw form
• Zero Tolerance for Salmonella in raw form
• 85 / 15 Blend
• No downers
• Domestic only
• Graded and Inspected by USDA, AMS
• The processor of the meat has to set up to run in
  a specific way per USDA AMS requirements

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Red Meat Processing

• What does this do to the cost of the raw material
  if purchased on the open market by a Processor?
• USDA per the Nov 15th Price list says that A594
  Beef is valued at 1.5216 per pound
• Commercially purchased A594 equivalent from one
  of the USDA suppliers as of 7/10/07 was 1.665
  per pound
• USDA National Weekly Pricing for Week 7/2/07 for
  85/15 Blend made from 90 Chemical lean and 50
  Chemical lean is 1.296 per pound (this
  specification is not zero tolerance for
  salmonella in the raw form but is zero for ecoli
  057-H7)
• http//www.ams.usda.gov/foodserv/2007Reports/AG200
  70702WFoodservice.pdf
• The difference is .369 per pound between 85/15
  National Average and commercial equivalent of
  A594 !

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Red Meat Processing

• Lets look a a finished product example of Beef
  Patties
• Beef Patties made using donated A594 on a FFS/
  MFFS basis
• 20 net case weight / 130 patties that
  are 2.46 oz each for 2 oz M/MA
• DF needed to produce 1 case is approximately
  16.5 s of A594
• Case cost is 19.50 per case or .15 per serving
  delivered to distribution (cost of the A594
  Ground Beef is not included in this price)

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Red Meat Processing

• Lets look a a finished product example of Beef
  Patties
• Beef Patties made using donated A594 on a NOI
  basis
• 20 net case weight / 130 patties that
  are 2.46 oz each for 2 oz M/MA
• DF needed to produce 1 case is approximately
  16.5 s of A594 Equivalent purchased at 1.665
• Case cost is 52.46 per case delivered to
  distribution (cost of the A594 Ground Beef is
  included in this price) marked up 10 by
  distributor 57.70 - 25.16 32.53 cs / .2502
  per patty

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Red Meat Processing

• Lets look a a finished product example of Beef
  Patties
• Beef Patties made using commercial beef blend of
  90s and 50s
• 20 net case weight / 130 patties that
  are 2.46 oz each for 2 oz M/MA
• DF needed to produce 1 case is approximately
  16.5 s of commercial beef blend of 90s and
  50s purchased at 1.295
• Case cost is 45.16 per case delivered to
  distribution (cost of the commercial beef blend
  of 90s and 50s is included in this price)
  marked up 10 by distributor 49.67 / .382 per
  patty
• Difference between NOI beef patty vs commercial
  price before commodity discount is 8.03 per
  case.

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The Puzzle of Poultry Processing

• The Devilish Details

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The Goal

• Highest Return on Commodity Dollar
• Know the Quantity We Will Receive
• Receive it When We Need It

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Substitution

• What Does It MeanIndustry
• Commingle Delivery Order Numbers
• Purchase of Raw Loads
• The Risks
• What Does It MeanCustomer
• Timely Deliveries
• Costs

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Yields

• Guaranteed Minimum Return
• Product Variety
• Case Return
• Costs
• Standard Yield
• Case Return
• Product Variety
• Costs

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The Results