Cowpooling: a cost comparison

cattleAbstract:

Cowpooling, the process of pooling money with other individuals to buy portions of a cow for meat, can save people a lot of money or cost them a lot of money.  For the household that already buys a lot of beef at a natural / ethical market like Whole Foods, there is the potential to save around $5,400 every 10 years.

However, for the household that buys a lot of conventional beef at a normal supermarket, cowpooling is a more dubious proposition and could, worst case scenario, end up costing the cowpooler more than $4,500 over a decade.

Intro:

What is cowpooling?  Much like it sounds, cowpooling is when a group of people pool their money together to buy a cow for the meat.  Why would people buy cows instead of just getting beef at the grocery store?  There are a few reasons:

  1. Likely healthier (grass-fed, fewer antibiotics)
  2. More humane (pasture-raised vs. factory farmed)
  3. Cheaper (sometimes)
  4. More convenient (less trips to grocery)
  5. Local

I’m sure there are other reasons, but those are the ones with the strongest draw for me, roughly in order of importance.

A standard cow costs about $2,000 to $2,500, which isn’t prohibitively expensive, but definitely isn’t cheap either.  I think most people that cowpool could probably afford to buy a whole cow, but the two limiting factors are shelf life and storage space.

Frozen beef stays good for about a year, maybe more, but a year is generally the safe rule of thumb (with vacuum packing).   The other limiting factor is storage space.  Most residential freezer/fridge combos can’t hold 400 pounds of beef, the typical yield from a full cow.

For these reasons, we have cowpoolers that opt to buy 1/8, 1/4, and 1/2 cows at a time instead.  This allows them to eat it before it gets freezer burn and to fit all the meat into a freezer in the first place.

The numbers:

For this example, I’m going to assume that people purchase half a cow, or 200 pounds of meat per year at a cost of $1,100 ($5.50 per lb).  This is about 1/2 a pound per day for one person or 1/4 per day for two people.  I’m also assuming that a new $300 freezer will be required to store the meat and that this freezer will cost $30 in electricity each year.

I need to compare the cowpooling example to something, so my alternative scenario is buying grass-fed beef at whole foods, from a csa, or at farmers markets.  I’m assuming 100 pounds of ground beef at a cost of $6.00 per pound and 100 pounds of steaks, roasts, and stew meat at an average of $10.00 per pound.

Running these scenarios through the ROI model yields the following:

  • 10-Year NPV: $5,425
  • 10-Year ROI: 47%
  • 10-Year Payback: 0.9 years

roi - cowpooling

chart - cowpoolingNot too shabby… $5,400 per decade compared to whole foods or farmer’s market equivalent cuts.

But the reality of the situation might be more complicated.  What if someone doesn’t buy grass-fed beef normally?  Grass-fed beef is much more expensive.  If we’re comparing buying 1/2 a cow to buying just traditional factory farm, grain-fed beef, then there aren’t any savings; you’d actually lose about $80 a year going the cowpool route (based on $4.00 per pound ground beef and $7.00 per pound other cuts in super market).

Moreover, what if someone not only didn’t buy grass-fed beef, but they also didn’t buy anything except for the cheapest cuts, ground beef, and manager’s specials.  Assuming this person would spend merely $4.00 per pound on all 200 pounds of beef per year, cowpooling would actually cost $450 more every year versus the super market… over $4,500 every 10 years.

Commentary:

To sum things up, depending on what your current beef buying habits are now, cowpooling could be a really smart financial decision, a somewhat neutral financial decision, or a really bad one.  The thing about it for me, however, is that finances aren’t the most important aspect of the decision.  They are a factor, to be sure, but not at the top of my list.

cows

I’d like to be the kind of person that “votes” with my dollar in all aspects of life (renewable energy, animal welfare, corporate responsibility, etc.), but sometimes it is damn expensive!  Is it worth $450 per year to get healthy, happy, pasture-raised, grass-fed, grass-finished beef instead of the pink slime sold the grocery store?  That’s a tough one that I’ll have to dwell on more.

The general principle here applies to a lot of different meats, however.  I’ve run the numbers for what kind of grocery bill savings you would need each year to break even on the freezer + electricity, and the answer is about $66 in savings every year (less than $6 per month).  So if you can figure out how to shave $66 bucks off your grocery store bill, while being healthier, more ethical, etc. by buying other kinds of protein & meat in bulk (turkey, chicken, rabbits, pork, lamb, goat, game, etc.), go for it.

If not, and you do decide to go with the beef option, you’ll be happy to know that defrosting isn’t necessary for a succulent steak.  In fact, steaks cooked straight from the freezer actually taste better according to the guys at America’s Test Kitchen (things just got a little more convenient for the hot-shot cowpoolers out there).

So that’s that.  Cowpooling is a complicated decision that probably makes the most sense for the especially health-conscious and ethical beef-eaters out there, the ones that are already most likely to buy from a CSA, Whole Foods, or farmer’s markets.

*All this being said, I am aware that beef is arguably one of the most carbon-intensive protein sources around.

Sources & Resources:
More roommates = more money + more fun
Some thoughts on timing the stock market
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Comments

  1. Fun article especially being from the Midwest I mentioned this once to my wife and she looked at me like I was the craziest man alive, I may be in the top 10, but not the craziest man alive. I think it’s a great idea especially as you have more people to feed, the downfall certainly is that freezer, but usually things that are worth it have an upfront cost. I’m sticking with Costco for my meat selection, but then again we are a family of 2.

    • Midwesterners unite… we want more beef!

      I’m actually from Louisville, KY originally, but I consider it Midwestern enough to claim membership 🙂

  2. 1/4lb of beef / person / day? That’s a lot of cow! The midwesterner in me is salivating 🙂

    I actually thought about this a while back when I was considering a CSA that also had a meat option. For us, we just don’t eat enough meat to justify it. We tend to eat vegan during the week. Not out of any vegan vendetta… more of a gradual movement towards eating more plants. On the weekend we’re definitely meatin’ it up, but even then we’re not going to go beef every night.

    If I had a huge family I think this would be a no-brainer.

    You should do a ROI calculation on deer hunting. Venison chili is delicious!

  3. I always purchase the healthier meat and just eat less to keep the costs reasonable. I think it is much, much healthier and also responsible. It does sound like this cowsharing could be a great deal for some people, but for me, I like living in small, high density housing in walkable areas. Condos use considerably less energy than a stand alone house, saving money on utilities, and then I don’t need a car which also saves me thousands of dollars a year. However, with all these cost saving perks, condos are not conducive to owning a large freezer. This definitely would not work for my lifestyle. Fortunately, we have plenty of small, sustainable farms in our area to purchase healthy meat on a regular basis.

    • Great point re: space for a freezer. It is like having a dog in the sense that most people don’t think about all the extra they’ll spend on extra yard space. Same goes with having space for a freezer… if you have the space for a freezer, maybe you’re already in too big of a place. How much could you save if you didn’t have that extra square footage. Or on the flip side, how much does the extra square footage for having a freezer cost. I’m sure it really turns the ROI on its head.

      Sounds like you live in a pretty nice spot. Thanks for dropping by!

  4. Thank you…I got “pushed” into this whole get a cow experience with others, and it has now snowballed into something very INVOLVED and unfun. I love the cowpooling term…and that is what it was for us/ 3 families for 1/4 steer. I started figuring up the time and effort to get this thing to fly, the gas to go after the processed steer in later November-great possibility of snow, and delays on the roads, the addition of the freezer, etc. The other families, have solar power, and more mouths to feed, for just a couple, that doesn’t eat much meat, and has a costco within a mile, it doesn’t seem to make much financial sense. And last year we had power outages in winter. I don’t want to risk spoilage, and I think freezer food has a definite flavor after 3 or 4 mths…I would rather buy freeze dried food and rehydrate it, ha. Years ago I worked for a preschool that served Bambi meat, and I guess it is an acquired taste, but the chili, and the other stuff they made with it just wasn’t for me. Though in my colleges years in Canada, I use to stay with a family that harvested moose, and that was WAY better IMHO. I just couldn’t enjoy bambi meat….

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