re: Dispelling Beef Misconceptions on the F&D board

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So where do the steak places, like Ruth's get their prime beef?

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So, Ruth’s (and most large volume beef purcharsers) has beef buyers on staff that deal directly with Beef Producers. They book contracts with approved suppliers based on specifications that they negotiate with the producers. Those deals are usually booked as price per lb, delivered to their distributor. Sounds like Buckhead might be currently delivering some Ruth’s Chris restaurants. Buckhead is owned by SYSCO corporation.

My former company has account managers on a sales floor in an office building, and it’s pretty similar to a Wall Street trading floor minus the blow and hookers. Every week, we are going to slaughter x number of cattle, and they have to sell everything. (Not just primals and grinds, but tripe, offals, the hide, the bones, the hooves, etc). A lot of it is sold on long term contracts, but a lot of it is also “day traded”. And it’s really a zero sum game. If we book a big contract with Ruth’s or Sam’s Club or Sysco Foodservice or Kroger, that means another packer didn’t get that volume and they have to find a home for it or vice versa.

Let’s say Cargill is long on USDA Prime Strip Loin. They are going to try to sell it as prime, but they may end up having to sell it to a buyer looking for “Choice or better”, which is how most buyers spec their program... Choice or better, select or better, no roll or better.

The sales managers are measured against the USDA weekly published market prices. If they sell at the market or higher, they had a good week. If they sell below the market, it wasn’t a good week. A nightmare week is not getting product sold at all and having to dump it to a cooker (think Hormel Chili or Dinty Moore Beef Stew)