Business news from the Fredericksburg region.

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Local stores help curb meat prices

Mike Bass and Geoff Bradshaw heard the same thing over and over from friends and family while working for a meat wholesaler.

“The price of meat keeps rising, how can I get what you’re selling?” they asked.

But with a minimum order that prices most families out of purchasing in bulk, the co-workers came up with an idea to start their own company to undercut the increasing price of meat.

M&G Wholesale Meats was the product of that idea, a Fredericksburg-based company that purchases in bulk and wholesales to businesses as well as having a central location where everyday people can benefit from their discounts.

Recent droughts and viruses have thinned the supply of beef and pork, causing those meats to be sold at a premium.

“Prices are skyrocketing,” Bass said. “Pork, shrimp, beef are all getting expensive. With our buying power, we get volume at discount prices.”

The business is set up off Lafayette Boulevard, and is bare-bones to keep overhead low. Walk-in customers find one room filled with freezers and boards displaying the market price of each product.

Bass said the goal is to undercut big-box stores, which he said have a monopoly on meat prices.

“If they raise the price, where else are you going to go here?” he said.

Bass said businesses like his and the Olde Towne Butcher in downtown Fredericksburg are important to keeping local prices in check.

For example, at the Olde Towne Butcher, owner Lee Russell isn’t passing on the full price increase of ground beef, the store’s cash cow, to his customers.

“I have never seen increases like we have now,” he said. “The ends meats which make ground beef have gone up $1.50. I haven’t been able to pass along all of that cost to my customers. We’re absorbing 25 percent of that increase and it’s hurting the bottom line.”

When the price of those meats was already $2.50 per pound, that represents a 60 percent rise in cost in the last year.

“We’re not expecting it to get better any time soon,” he said.

The price of beef and veal shot up more than 10 percent from June 2013 to June 2014, according to the most recent Consumer Price Index.

Pork prices rose by 12 percent.

These increases are the result of drought that has thinned cattle herds and of disease called porcine epidemic diarrhea (PEDv) hitting young pigs.

According to the U.S. Department of Agriculture, domestic beef supply is at a 63-year low. A drought that began in 2011 and hit cattle-producing states such as Texas and California particularly hard forced farmers to thin herds. And the nation’s pig population is at its lowest since 2006.

M&G is trying to be the solution to the problem locally, but even they struggle with prices.

“If something is too expensive, we just don’t get it in,” he said.

Bacon, which can retail at $5.50 per pound, M&G currently has in stock at $2.49 per pound. Bass said the highest he’ll go before ceasing to order it is $3.98.

He also has been able to offer recent specials on crab legs and Nathan’s brand hot dogs.

Another tool they employ is a weekly “State of the Meat” report. The USDA provides businesses like M&G with a projection for how prices will rise or fall in coming weeks. Bass and Bradshaw share those reports on their website, through social media and in the store to keep the buying process transparent for their customers.

Bass said the business plan is working, and they have distribution centers in Newport News and Massachusetts, Bradshaw’s home state.

“People gotta eat,” he said. “So this works. Next for us is franchising.”

Lindley Estes: 540/735-1976