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 §§
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 §§
