Profitable production and marketing of meat goats and sheep
Profitableproduction and marketing of meat goats and sheep SUSAN SCHOENIAN Sheep & Goat Specialist www.sheepandgoat.com firstname.lastname@example.org
What is PROFIT? INCOME MINUS OPERATING COSTS MINUS FIXED COSTS (OVERHEAD) EQUALS NET FARM INCOME OR PROFIT
Two ways to increase profitREDUCE COSTS INCREASE INCOME• Reducing operating costs by • More animals to sell spending less money on • Better quality animals to sell feed, supplies, veterinary (e.g. higher grade). medicine and services, and capital improvements. • Heavier lambs and kids• Reduce costs by utilizing • Lower marketing costs resources more efficiently. • Higher prices Increase reproductive efficiency: pounds of quality offspring weaned per female exposed for breeding
Current situation insheep and goat marketing • RECORD HIGH PRICES 112-lb. lamb sold for $232 in July. – Insufficient supply of lamb and goat in U.S. • Esp. regional supply – Strong demand • Esp. regional demand • Esp. ethnic demand – Low value of U.S. dollar makes imports more expensive.
BUT…• Prices won’t always be this high.• You don’t always get the prices you see posted in the newspaper or on the internet.• It’s hard to know what goats are selling for since they are often not weighed and grading is very subjective and not always consistent.
AND…• There are many costs associated with selling lambs and goats at a public auction. • Transportation costs • Shrinkage • Yardage • Sales commission• Selling price ≠ net price
Who eats sheepand goat meat?• The per capita consumption of lamb and mutton is low, less than 1 lb. per person.• Per capita consumption is much higher among people of certain ethnicities.• The ethnic populations that eat lamb and goat are increasing.
Who are ourprimary consumers? Chevon (cabrito) Lamb and mutton • Hispanics (Latinos) • Muslim • African Americans • Muslims • Arabs • Arabs • South Asians • East Asians • Others • South and Central Asians • Christian – Esp. Orthodox • Africans • Greeks • Caribbean Islanders • Russians • Eastern Europeans • Ethiopians On average, Muslim-Americans are • Jewish younger, better-educated, and more affluent than the average American.
What is an ethnic market? • An ethnic market is a group of consumers that share a common cultural background: race, color, national origin, religion or language. • There are many different ethnic markets for goat and lamb.
Ethnic marketing:sheep and goats • Different ethnic groups and individual customers have preferences for different kinds of animals. • Species • Sex • Age • Weight • Condition Know what your customers want.
Ethnic marketing:sheep and goats • The demand for lamb and goat in advance of certain holidays. • Religious – Muslim – Christian – Jewish – Hindu Know the holidays in which lamb • Non-religious and goat are in high demand.
Major Muslim holidaysEID is the Arabic word for festival. • Ramadan Month of fasting • Eid ul Fitr Festival of Fast-Breaking “Little Eid” • Eid ul Adha Festival of the Sacrifice “Big Eid” Muslim holidays are based on the • Aqeeqah sighting of the moon and move Baby-naming ceremony back ~11 days each year.
Ethnic holidays http://www.interfaithcalendar.orgHoliday 2011 2012 2013 2014 2015Eid ul-Adha Nov 6 Oct 26 Oct 15 Oct 4 Sept 23Festival of the SacrificeMuharramm/Hajra Nov 26 Nov 15 Nov 4 Oct 25 Oct 24Islamic New YearMawlid al-Nabi Feb 15 Feb 4 Jan 24 Jan 13 Dec 23Prophet’s birthdayStart of Ramadan Aug 1 Jul 20 Jul 9 Jun 28 Jun 18Eid ul-Fitr Aug 31 Aug 19 Aug 8 Jul 29 Jul 18Festival of Fast BreakingPassover / Pesch Apr 19-26 Apr 7-14 Mar 26-Apr 2 Mar 15-22 Apr 4-11Rosh Hashanah Sep 29-30 Sep 17-18 Sep 5-6 Sep 24-25 Sep 4-5Chanukkah Dec 21-28 Dec 9-16 Nov 28-Dec 5 Dec 17-24 Dec 7-14Western (Roman) Easter Apr 24 Apr 8 Mar 31 Apr 20 Apr 5Eastern Orthodox Easter Apr 24 Apr 15 May 5 Apr 20 Apr 12Christmas Dec 25 Dec 25 Dec 25 Dec 25 Dec 25Orthodox Christmas Jan 7 Jan 7 Jan 7 Jan 7 Jan 7Chinese New Year Feb 3 Jan 23 Feb 10 Jan 31 Feb 19
Ethnic slaughter • Some ethnic customers require animals to be slaughtered in a certain way. • Halal (Muslim) • Kosher (Jewish) • African/Caribbean There is an exemption for • Other religious (no stun) slaughter.
Slaughter optionsfor sheep and goats Custom State Federal On-farm exempt inspection inspection Facilities Federal-state Can sell meat No inspection cooperation inspected if labeled “At least equal For own For owner’s No to” federal consumption consumption inspection restrictions New policy Open to Not for resale allows interpretation interstate sales Purpose of inspection is to ensure wholesomeness of products. Includes inspection of facility and animals (ante and post-mortem).
Two general ways to marketagricultural productsWholesale (commodity)• Usually a price-taker• Loss of product identity• Raw product (commodity)• Easy and convenient• Probably more profitable when prices are high. Retail (direct) • Usually a price-setter • Product identity/differentiation • Value-added • Usually requires a lot more time and expense • More profit potential when prices are low or fluctuate widely.
Marketing sheep and goatsWholesale (commodity) Retail (direct)• Live animal • Live animal – On-farm sales – Public auction • Freezer trade • Local sale barn • Ethnic customers • Terminal market • Carcass or meat – Middlemen – Farmer’s market • Buying station – CSA – Farm store • Live market – Via Internet • Broker or dealer – Restaurant • Direct marketer – Retail store – Abattoir – Event
Three ways to price animals1. Market price + premium2. Breakeven price + profit margin3. What the market will bear. The key is repeat customers.
Know what youranimals are worth? • Sale barns are a place of price discovery. • Learn how to read a market report. – Prices – Terminology – Grades
Understanding USDA goat grades• Selection 1 Superior meat type• Selection 2 Average meat type• Selection 3 Inferior meat type Grades do not consider fat cover, weight, age, sex, or breed.
Understanding USDAsheep and lamb gradesConformation and quality Yield (cutability)• Prime • 1 - 0.15 in. and less• Choice • 2 - 0.16 to 0.25 in.• Good • 3 - 0.26 to 0.35 in.• Utility • 4 - 0.36 to 0.45 in.• Cull (sheep only) • 5 - 0.46 in. and greater. Ninety percent of lambs grade USDA Choice or Prime. Yield grading is voluntary.
Some tips for selling sheepand goats through a sale barn• Put livestock into market at least one week before holiday.• Sell when prices are low prices supply supply prices prices supply supply prices• Mark your animals according to how you want them sold.
Some tips for selling sheepand goats through a sale barn• Do not dock, castrate, or disbud unless you have to.• Do not sell animals with dirty butts or hocks.• Sell lambs and kids directly off their dams (unless you plan to feed them to heavier weights).• Sell colored goats.• Make sure you livestock are put in a clean, uncrowded pen with food and water.
Some tips for selling sheepand goats to a middleman• Know what your livestock are worth. – Know weight – Know grade• Points of negotiation – Transportation – Shrink – Payment
Direct marketing tips• Direct marketing shouldn’t be a way to make a profit in agriculture, it should be a way to increase profitability.• Market your products honestly.• It may take a while to build a loyal customer base.
American Lamb Check-offwww.lambcheckoff.com• No matter how you sell your sheep, you are obligated to pay the lamb check-off. 1. One-half cent per lb. of live sheep 2. 30 cents per head of lambs purchased for slaughter No check-off for goats.
Profitable production and marketing of meat goats and sheep Thank you for your attention. Any questions?www.sheepandgoat.com