Beef Pattie - Cost Structure

Asked January 22, 2014, 12:40 AM EST

I want to determine the cost involved in the different stages of beef (meat) production.
What percentage of the final cost is accounted by raw material, labor, electricity, machinery/equipment and land and building?

Outside United States small meat processors

3 Responses

Hello,

This is such a huge question that there are people working full time on it in large companies, trying to find and refine efficiencies. The costs will vary widely with scale and geographic location (due to everything from seasonal rainfall to the local cost of electricity).

Good luck!

Hi Arion,

Thanks a lot for the response.
I completely understand the concern. However, we are not looking for exact numbers. We are only trying to understand the percentage share of cost components.

Also, we are interested in the Irish market.

Regards,
Kirti Gaurav

Hello,

This is still an impossible question because the scale is not defined.

In the large-scale commodity industry in the United States, the cost to make patties is probably something like 5 to 10 cents per unit and the raw materials are currently running about $2.20/lb. (beef trim). Therefor if you would like to make a 1/4-lb. patty the raw materials cost about 85% (55 cents/ 65 cents) and everything else costs about 15%.

Hope this helps.