Ethnic marketing options for lamb and mutton

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.

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.

Ethnic marketing options for lamb and mutton

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