Ethnic marketing options for lamb and mutton
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Ethnic marketing options for lamb and mutton

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This is the third presentation in a 4-part webinar series on the ethnic marketing of lamb and mutton.

This is the third presentation in a 4-part webinar series on the ethnic marketing of lamb and mutton.

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Ethnic marketing options for lamb and mutton Ethnic marketing options for lamb and mutton Presentation Transcript

  • Ethnic marketing of lamb and mutton Part III. Understanding and evaluating your options SUSAN SCHOENIAN Sheep & Goat Specialist University of Maryland Extension sschoen@umd.edu
  • Options for selling a live animal • There are three main options for selling live animals to the ethnic market(s): 1. Sale barn (auction) 2. Middleman 3. Direct to the consumer • There are different options within each category. • Each option has various pros and cons. • There is no best way to market live animals; it should be the method(s) that is most profitable, when all costs considered.
  • Marketing animals through a sale barn (also called auction or stockyard) • Not all auctions are equal. • Local • Terminal • Weekly • Special • Graded • Sponsored
  • Pros and cons of marketing livestock through a sale barn PROS • Place of price discovery • Price competition (usually) • Prompt, guaranteed payment (P&S Act) • Unbiased grading (usually) • Animals are weighed and weights are certified. • Easy • Convenient • Low labor CONS • You are a price taker • Prices not known ahead of time • Price volatility • Selling fees can be substantial (commission, insurance, yarda ge, feed), especially for lighter lambs. • Stressful to livestock • Transportation costs • Shrink
  • Tips for marketing through a sale barn, with the ethnic markets in mind • • • • • • • • • • • • • • • Sell livestock prior to major ethnic holidays, at least one week ahead of time. Do not castrate males, unless necessary. Do not dock lambs, unless necessary. Do not sell dirty animals with soiled hocks and hindquarters. Consider shearing animals that are neither too fat nor too thin. When selling suckling lambs/kids, sell them directly off their dams. Mark your animals according to how you want them sold. Do not bring your animals to the sale barn at the last minute. Make sure your animals have feed and water. Call the market manager ahead of time. Get to know manager(s). Sit through auctions. Get to know buyers. Consider selling when reported prices are low. Consider breeding out-of-season. Pay attention to body condition. Don’t sell culls that are too fat or too thin. Sell to the auction that offers you the most profit – not necessarily the highest price.
  • Ethnic/religious holidays impact prices. Price per cwt, ~70 lb. lambs, Prime and Choice, YG 2-3 New Holland, Pennsylvania Festival of the Sacrifice Oct 15 $240 $220 Orthodox Easter (May 5) $200 Western Easter Mar 31 $180 $160 $140 $120 Ramadan Jul 9- Aug 8 25-Nov 11-Nov 28-Oct 14-Oct 30-Sep 16-Sep 2-Sep 19-Aug 5-Aug 22-Jul 8-Jul 24-Jun 10-Jun 27-May 13-May 29-Apr 15-Apr 1-Apr 18-Mar 4-Mar 18-Feb 4-Feb 21-Jan 7-Jan $100
  • 7-Jan 6-May 5-Aug 2-Dec 25-Nov 18-Nov 11-Nov 4-Nov 28-Oct 21-Oct 14-Oct 7-Oct 30-Sep $214 $230 $182 $136 23-Sep 16-Sep 9-Sep 2-Sep 26-Aug 19-Aug 12-Aug $193 $148 29-Jul 22-Jul 15-Jul $154 8-Jul 1-Jul 24-Jun 17-Jun 10-Jun 3-Jun 27-May 20-May 13-May $172 3000 29-Apr 22-Apr 15-Apr 8-Apr 1-Apr 25-Mar $204 3500 18-Mar 11-Mar 4-Mar $183 2000 25-Feb 1500 18-Feb 11-Feb 4-Feb 28-Jan 21-Jan 14-Jan $182 Supply impacts prices. Number sheep sold at New Holland Sales Stables in 2013 4000 Prices for Prime & Choice, YG 2-3 major holidays $191 $163 2500 1000
  • Quality (grade) has an effect on prices. Price per cwt, 70-lb. lambs @ New Holland, Pennsylvania Choice & Prime, 2-3 Choice & Prime, 3-4 Good & Choice, 1-3 Utility & Good, 1-2 $260 $240 $220 $200 $180 $160 $140 $120 $100 $80 7-Jan 7-Feb 7-Mar 7-Apr 7-May 7-Jun 7-Jul 7-Aug 7-Sep 7-Oct 7-Nov 7-Dec
  • Effect of quality (grade) on goat prices 60-80 lb kids, $ per head (weighted average) New Holland, Pennsylvania USA April 1 -November, 4, 2013 $200 $180 $160 $140 $120 $100 $80 $60 4/1 4/8 4/22 4/29 5/6 5/13 5/20 5/27 6/3 6/10 6/17 6/24 7/1 7/8 7/15 7/29 8/5 8/12 8/19 8/26 9/2 9/9 9/16 9/23 9/30 10/21 10/28 11/4 Selection 1 $139 $159 $154 $169 $150 $155 $169 $145 $178 $168 $146 $140 $164 $182 $159 $122 $134 $131 $154 $143 $138 $145 $139 $133 $152 161 139 141 Selection 2 $107 $134 $131 $145 $122 $113 $125 $141 $158 $125 $117 $109 $143 $136 $132 $105 $114 $108 $106 $115 $116 $129 $112 $121 $112 120 102 118 Selection 3 93 76 86 $63 $109 $89 $70 $98 $88 $99 $71 $85 $108 $103 $83 $88 $107 $90 $79 $99 $97 $89 $68 $89 $94 $85 $104 $90
  • Marketing animals to a middleman. There are many middlemen willing to buy your sheep. • Buying station • Order buyer • • • • • • • Dealer/broker Abattoir/processor Ethnic Store Ethnic restaurant Cooperative Live market Other producers
  • Pros and cons of marketing livestock to a middleman PROS CONS • Opportunity to negotiate • Payment risk – – – – Price Shrink Delivery Contract • Price known ahead of time • Low cost method – No selling fees – No processing costs • Low labor [sell to bonded/licensed dealers; require cash payment] • May not always be the highest price offered; middleman needs to make a profit, too. • May not always be buying.
  • Direct marketing live animals • Different options 1. Cash-and-carry 2. Custom slaughter Mobile slaughter 3. On-farm slaughter (where legal)
  • Pros and cons of direct marketing live animals PROS • Set your own price • No selling fees – – – – Commission Yardage Insurance Feed • No processing costs • Less stress to animal • Low labor CONS • Payment risk • Language and cultural barriers • Buyer may lack suitable transportation • You may not know where and how animal is slaughtered On-farm slaughter • Legality [not legal in most states] • Need a place to slaughter • Offal disposal • Comfort (not for everyone)
  • Direct marketing carcasses and/or meat to the ethnic markets • There are many options for direct marketing carcasses and retail cuts to ethnic consumers. a) b) c) d) e) f) g) Farm store Farmer’s market CSA Internet sales Ethnic restaurant Ethnic store Ethnic events
  • Pros and cons of direct marketing meat PROS CONS • You set your own price • You incur none of the costs associated with selling a live animal. • Your are eliminating almost all of the middlemen. • Opportunity to sell your own branded product(s). • The demand for local meat is growing. • Interaction with customers. • Many regulations (local, state, and federal) govern the sale of meat and meat products. • All livestock have to be processed in a USDA or state-inspected plant; processing costs can be high. • You may not be able to sell all cuts. • Can be costly and timeconsuming to deliver product to market place and to sell it. • Some markets require year-round availability. • Sometimes, the local live market will be higher.
  • American lamb check-off www.lambcheckoff.com • ALL sheep are subject to assessment when sold. [market lambs, feeder lambs, freezer lambs, ethnic lambs, 4-H lambs, culls, breeding stock] • Two assessments 1. Producer (and feeder) $0.007 per lb. sheep sold 2. First handler (usually processor) $0.42 per sheep slaughtered • Assessments should be remitted monthly to the American Lamb Board (by the 15th of the month following the sale). • The check-off funds the activities of the American Lamb Board: promotion, education, information, and communication.
  • How does the check-off work? Producer Marketing agency • The producer is assessed $0.007 per lb. of live sheep that he sells. • Who remits the check-off (to the Lamb Board) depends upon the method of marketing. • Feeders are obligated to pay $0.007 per lb. on the weight that the sheep gains. • Sheep held for less than 10 days are exempt from the check-off. • Marketing agencies, while exempt from the checkoff, collect the assessment ($0.007/lb) from the producer (seller) and pass it on to the buyer. • If you market sheep through a sale barn, you do not need to remit anything to the Lamb Board.
  • How does the check-off work? First handler (usually processor) • Producer portion of check-off has been passed onto the first handler by marketing agency or it is deducted from the selling price of the lambs. • First handler is assessed an additional $0.42 per head. • First handler remits entire assessment to Lamb Board. Direct marketers • Direct marketers are both producer and first handler and are assessed an additional $0.42 per head. • If you are a direct marketer you need to remit both the producer ($0.007/lb) and first handler ($0.42/head) portions of the check-off to the Lamb Board.
  • Check-off examples for 100 lb. lamb The assessment for a 100-lb. lamb is $1.12 (100 lbs. x $0.007/lb + $0.42/head). Sell at local sale barn 1. 2. Sale barn deducts producer portion of check-off ($0.70) from sale proceeds. Whoever eventually slaughters the lamb pays the first handler portion of checkoff ($0.42) and remits entire amount of check-off ($1.12) to Lamb Board. Lamb sold at Farmer’s Market 1. 2. 3. Producer is both producer and first handler. Producer pays producer ($0.007/lb. and first handler portion ($0.42/head) of checkoff. Produce remits both portions of check-off ($1.12) to Lamb board. Sell freezer lamb to customer 1. 2. 3. Producer is both producer and first handler. Producer pays producer ($0.007/lb. and first handler portion ($0.42/head) of checkoff. Produce remits both portions of check-off ($1.12) to Lamb board. Sell live animal to processor 1. 2. 3. Processer deducts producer portion of check-off ($0.70) from purchase price. Processor pays first handler portion of check-off ($0.42). Processor remits total checkoff ($1.12) to Lamb Board.
  • Check-off examples for 100 lb. lamb The assessment for a 100-lb. lamb is $1.12 (100 lbs. x $0.007/lb + $0.42/head). Sell at local sale barn 1. 2. Sale barn deducts producer portion of check-off ($0.70) from sale proceeds. Whoever eventually slaughters the lamb pays the first handler portion of checkoff ($0.42) and remits entire amount of check-off ($1.12) to Lamb Board. Lamb sold at Farmer’s Market 1. 2. 3. Producer is both producer and first handler. Producer pays producer ($0.007/lb. and first handler portion ($0.42/head) of checkoff. Produce remits both portions of check-off ($1.12) to Lamb board. Sell freezer lamb to customer 1. 2. 3. Producer is both producer and first handler. Producer pays producer ($0.007/lb. and first handler portion ($0.42/head) of checkoff. Produce remits both portions of check-off ($1.12) to Lamb board. Sell live animal to processor 1. 2. 3. Processer deducts producer portion of check-off ($0.70) from purchase price. Processor pays first handler portion of check-off ($0.42). Processor remits total checkoff ($1.12) to Lamb Board.
  • State check-off programs Payment to state check-off programs is mandatory. State California Colorado Mandatory assessment Web site $0.08 per pound of wool $0.25 per head http://www.coloradosheep.org/sheep---wool-authority.html $0.005 x value of sheep sold Indiana Iowa http://www.hoosieragtoday.com/indiana-sheep-and-wool-checkoff-assessmentto-begin-dec-1/ $0.10 per head $0.02 per lb. of wool http://www.iowasheep.com/ Kentucky Ohio $0.005 x value of sheep and goats sold https://kysheepandgoat.org/Check_Off.html $0.005 x value of sheep sold $0.001 per lb. of wool http://www.ohiosheep.org/oswp.html Oregon $0.50 per head http://oregonsheepcommission.com/
  • Final thoughts about marketing options • Sell lambs for a profit – know your cost of production. • Sell lambs for highest “net” price; consider all marketing costs when choosing best option(s). • Have a plan for marketing your lambs; don’t just take them to the sale barn when you feel like it.
  • Thank you for your attention. Questions? The last webinar will be held Tuesday, December 10 at 7 p.m. EST. The topic will be “Developing a marketing plan.” The speaker will be Dr. Richard Ehrhardt from Michigan State University.