Pork Butt Cutting Test

Discussion in 'Pork' started by pops6927, Apr 23, 2009.

  1. pops6927

    pops6927 Smoking Guru Staff Member Moderator Group Lead OTBS Member SMF Premier Member

    Did up a couple pork butts from Sam's the other day into sausages, but did a cutting test while doing it. Let me explain: A cutting test gives you percentages of cuts to total product weight so you can figure the profitability of what you're cutting out of that product in different scenarios and at different retails. This is how meat department personnel determine what retails to set and still be able to get the required profitability from the product.

    Here's the tag off the product:



    Product: 2 pork butts
    Net weight minus bag/purge: 15.91 lbs.

    Here's the butts separated into bone, unuseable trim, and product (along with me and a Texas favorite, a bottle of Shiner!):



    Butts: 15.91 lbs. minus:

    bone: 1.10 lbs. 6.91% to total (divide 1.10 by 15.91)
    scrap: .79 lb. 4.96% (etc.)

    net: 14.02 88.12%

    So, you now know that, from initial net weight of the product, you should get a boneless yield of 88.12%. (If you did 100 tests you'd average your yields together to get an average net yield).
    Now, let's say you went on to cut the boneless portion into 3 items: boneless country style ribs, boneless pork steak, and the remainder into sausage. The first step is to cut off the fattier end of the butt to put into sausage:



    which was 1.61 lbs. of trim or 10.11%

    Then cut the rest into boneless country style ribs and pork steak:

    Pork Steak: 4.36 lbs. 27.40%
    Country Style Ribs: 8.05 lbs. 50.59%

    The Country Style Ribs:



    So let's recap:

    Total net weight: 15.91
    Bone: 1.10 6.91%
    Scrap: .79 4.96%
    End for Sausage: 1.61 10.11%
    Boneless Pork Steak: 4.36 27.40%
    Country Style Ribs: 8.05 50.59%
    Total: 99.97% (a bit shy due to rounding off, but effectively 100% of total)

    Now, you need to know your cost. Usually this is on your bill from the packer, but in this case, we'll look on a market report from:

    http://agebb.missouri.edu/mkt/bull7c.htm

    Showing the price per cwt (hundredweight) for butts is (as of yesterday) 70.56, or .7056 or .71 per lb.

    Now, if you compared cost to retail of the entire product, you'd have 1.18 - .71 = .47 or 39.8% profit (.47 ÷ 1.18)

    In pound perspective, it would be 15.91 x 1.18 = 18.77
    15.91 x .71 = 11.30
    Difference: 7.47 Profit Dollars
    Profit: 7.47 ÷ 18.77 = 39.8% Profit Percent

    Now, let's add some retails:

    Boneless Pork Steak: 2.49 lb.
    Boneless Country Style Ribs: 2.99 lb.
    Sausage: 2.79 lb.

    Steak: 4.26 lbs. x 2.49/lb. = 10.61
    Ribs: 8.05 lbs. x 2.99/lb. = 24.07
    Sausage: 1.61 lbs. x 2.79/lb. = 4.49
    total: 39.17
    cost: 11.30
    difference (profit $) 27.87
    Profit & 71.2%

    Wow! What a jump in profit by 'merchandising' out that product into different cuts at different retails! Now, you can adjust the retails up and down by putting one or the other or all three on sale and see just what profit percent yield you will get from a whole butt. However, extend this test by the percentages to larger quantities. Say for example you're going to do a sale and know you're going to need 350 boxes of whole butts at 65# / box. That's 22,750 lbs. of product.

    6.91% will be bone = 1572 lbs.
    4.96% will be unuseable scrap = 1128 lbs.
    10.11% will be sausage = 2300 lbs.
    27.40% will be pork steak = etc.etc..... see how with the percentages you can extend it out?
    You could take it all and put into sausage at a better retail, you could do it all into country style ribs, etc. etc.
    If the buyer knows 4 weeks out they're going to advertise sausage at a lowball retail, and it's summer and country style ribs are moving well, then raise the price by .10 per pound for 3 weeks to garner more profit so on the 4th week you can lowball sausage at 1.99 lb. and still figure the same profit levels. Plus, have cutting tests done on butts putting it all into sausage, all into bone in country style ribs and boneless country style ribs (split the butt with the blade on one half and none on the other half and cut both into cs ribs, pricing out bone in and boneless..)

    This whole exercise gives you a glimpse into what goes into price setting and computing profit margins on your different subprimals based on what cuts are garnered from them, besides a breakdown of what the yield is on a pork butt. Hope you all understood it ok and it's useful to you!

    Now, likewise, I've seen some posts about what to charge for your smoked product. Using this, you can determine what percentage and how much dollar-wise you would make off products in the same fashion:

    Weight of product (wop) before smoking
    wop after smoking
    wop after removing bone
    figure cost of raw product
    compute at different retails your effective yield after shrinkage and waste and % of profit garnered.

    Pops §§
     
  2. pops6927

    pops6927 Smoking Guru Staff Member Moderator Group Lead OTBS Member SMF Premier Member

    Now, likewise, I've seen some posts about what to charge for your smoked product. Using this, you can determine what percentage and how much dollar-wise you would make off products in the same fashion:

    Weight of product (wop) before smoking
    wop after smoking
    wop after removing bone
    figure cost of raw product
    compute at different retails your effective yield after shrinkage and waste and % of profit garnered.
     
  3. danmcg

    danmcg Master of the Pit OTBS Member SMF Premier Member

    Thanks pops, that was very informative.
     
  4. wutang

    wutang Smoking Fanatic OTBS Member

    Great info. Great post. Point worthy for sure.
     
  5. the dude abides

    the dude abides Master of the Pit OTBS Member

    Have you ever seen that movie where the guys head explodes from information overload? LOL

    Great post.

    As a hobby/weekend smoker, I'd have little need for this info. But I think this should be considered to be a sticky for a lot of the competition folks and others who sell their product. Maybe edit the original post (so it's all on one post) to include what Pops6927 was talking about with post cooked weights.
     
  6. alx

    alx Master of the Pit OTBS Member

    ...............................
     
  7. pops6927

    pops6927 Smoking Guru Staff Member Moderator Group Lead OTBS Member SMF Premier Member

    It's a good dark beer, but it's made in Shiner, Texas, not Germany! Totally domestic!
     
  8. pops6927

    pops6927 Smoking Guru Staff Member Moderator Group Lead OTBS Member SMF Premier Member

    Edited into a single post. It is a lot of information, I apologize. There are some that can directly benefit from it and some others that can be entertained by playing with the numbers. As a meat department manager for over 30+ years this was daily work routine we had to know, understand and do; thought others would benefit from it. Hope y'all do! Anyways... back to my Shiners... [​IMG]
     
  9. hog warden

    hog warden Smoking Fanatic

    Bump to look at this again. Great information.

    I wish there was someway to get a video of Pops boning out a pork butt. We might all learn something.

    BTW, I attended a conference a year ago in San Antonio. Texas guys treated us to a BBQ. They brought a keg of Shiner Bock and a keg of something else and nobody touched the something else till all the Shiner was gone. Good stuff.
     
  10. got14u

    got14u Master of the Pit OTBS Member SMF Premier Member

    Nice write up !!!!![​IMG]
     
  11. rivet

    rivet Master of the Pit OTBS Member

    Don't know how I missed this post but that was FANTASTIC! Thanks Pops and no need to apologize. I eat up this kind of math for breakfast lunch and dinner! I'm in the food manufacturing industry and deal with component-pricing and product-yields every day.

    You have certainly put together a text-book example of the pricing structure a retail business HAS to utilize to maintain operating profitability. Anybody who wants to go into business for themselves- be it catering or supply- must be intimately aware of this type of analysis or they will very probably fail.

    Very well earned points for this tutorial. Thank you!

    [​IMG]
     
  12. mballi3011

    mballi3011 Smoking Guru OTBS Member SMF Premier Member

    Nice post there pops and very informative and thanks for posting it.
     

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