Price Increases?

written by

Brad Schmidt

posted on

May 27, 2021

Price Increases

If you are a lot like me, hearing the two words “Price Increase” is kind of alarming.  It’s frustrating when you walk into any store or stop at any gas station and see a sudden price increase that you weren’t expecting and hadn’t heard about. 

Price increases I think are always a touchy subject. Many of us work off of monthly budgets in a house hold and we have projected expenses as businesses. Then out of left field comes something unexpected. We want to try and be as transparent with our customers and the people that follow along on our operational journey as possible, that’s why I am writing this blog. 

I feel like a blind sighted price increase, just isn’t right to the consumer. If we know we are going to be going up on prices, we want everyone to know about it! That way we can all plan a little better. Some may be wondering if we are exempt to the price changes of our products. The answer is, NO. We feel it on our monthly budgets as well. We may be a little biased, but we truly believe we have some of the best meat products that anyone can find. With having the best product can also come with a higher cost. But our quality of our product is phenomenal. You cannot duplicate our quality and how we raise our animals in a large retail store business. Therefore, we all also enjoy our meat products too! So yes, we also feel the price increases because each of us buys meat from our farm business to feed our families too. 

Unfortunately, this last year of a pandemic has hit many businesses and supply chains really hard. But FORTUNATELY for us, we have had a great backing from many awesome customers throughout the year! Also, FORTUNATELY for us we are not like many large meat suppliers. We are all family owned and family operated. We are the ones on the front lines every day working on the farm to grow the very best quality and most healthy product for our consumers. But this can bring about a completely different challenge, pricing. 

Since we run things totally differently than large meat supply chains. We get to deal with totally different hurdles. Since the US has gone down the path of trying to make very cheap food to bring to its people. The US has sacrificed the most important factors in our everyday lives, and that’s health and food!  To bring a cheaper priced product to a consumer, many farms around the US went to confinement raised animals, with more automation, higher numbers of livestock, and more bulk. The more bulk in everything the cheaper the product is when it gets to the end consumer. 

We can talk chickens for example. Anytime you buy a chicken or chicken breast in a store it’s always the cheapest protein/meat you can buy. This is because in an average commercial chicken barn, there are tens of thousands of chickens in each barn. All of these barns now are fully automated with automatic feeders/waterers etc. The chickens are grown as fast as possible in the shortest amount of time possible to get them out the door and into retail stores around the country. The growing conditions of these animals is not how we like to see our birds raised. Now do not misunderstand me, I am not trying to bash the commercial chicken industry or any commercial industry for that matter. There is less than 1% of the entire US population that are farmers. I think we need to all work together as an industry to always strive to do better. On our farm, we just try and do things differently and in a more natural way. 

We like to see our animals be able to express and act like they were intended to. You can read more about how we raise our chickens and turkeys in our previous blogs. 

Back to pricing..

For our operation, since we are running the entire supply chain, that is usually run from multiple sources in a commercial industry. We handle EVERYTHING on our operation. Since we also don’t run tens of thousands of animals; we also don’t get the advantages of having lower pricing with higher quantities of animals. 

Almost everything that is sold through our direct marketing business started at our farm. Our beef, pork, and sheep are born and raised on the farm. (Except for some of our beef animals and egg laying chickens. We are partnering with some close family friends/neighbors that raise animals just like us in a Regenerative manner, that we are pairing up with to supply beef and eggs since we can’t produce enough on our home farm. Which I will elaborate on more in a future blog post/page on our website.) All of our chickens and turkeys are bought through family-owned hatcheries and then are mailed to us as day old chicks, and raised for the rest of their time on our farm. 

After all of our animals are raised up to the time of correct butchering weights. Then we take them all to USDA inspected meat processing plants and have them processed. Because of the large meat shortages and supply chain issues this last year due to COVID. This threw us a HUGE curveball that we weren’t expecting. Many smaller processing plants were getting overwhelmed with new people bringing animals in because they realized they couldn’t buy meat in a grocery store anymore. So, many of our animals processing dates are booked out over a year in advance, which is NOT normal for smaller scale operations. Therefore, many of our processing costs went up. We even had a processing plant that we took our chickens and turkeys, get shut down because of lack of employment. Just another hurdle to jump over and so we were fortunate enough to find another USDA processing plant for our poultry. Even though it’s about a 10-hour round trip for us to drive there, it’s worth it to have the best quality for our customers. 

We are the Entire supply chain into one business! So, we get ALL of the costs unto us. Which we have to in turn reflect into our pricing structure. Plus, we also have to tack on some extra so that we can make a profit and have some extra money coming in! If we don’t have added margin in there, we wouldn’t be in business very long! 

For example, these are some of the price increases we have seen that required us to change some things:

-       Feed costs 

-       Production costs 

-       Animal costs 

-       Labor costs 

-       Butchering/Processing costs 

-       Packaging costs 

-       Storage Costs

-       Travel/Trucking Costs 

-       Shipping Costs 

(**There is a range of 20% to 100+% increase on some of these costs.)

Hopefully we will see some of those costs come down in the future. As of right now, it may be a LONG TIME before that happens again. If prices come down, we will certainly re-evaluate our pricing structures to reflect that within reason. 

As I said before, we are wanting to be as transparent as possible. Throughout COVID we never increased our prices to take advantage of the consumer like many large retail chains. But now we have to adjust to reflect the times coming ahead. Hopefully this has helped clear the air a little bit on our pricing. 

If you have any questions/suggestions/criticisms etc. we are welcomed to take them all and constructively harness them as best we can. 

Thank You!!

Brad Schmidt

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