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  1. 1. S. Schoenian 12/12/2011 Profitable production and marketing of meat goats and sheep SUSAN SCHOENIAN Sheep & Goat Specialist What is PROFIT? INCOME MINUS OPERATING COSTS MINUS FIXED COSTS (OVERHEAD) EQUALS NET FARM INCOME OR PROFITProfitable production and marketing ofmeat goats and sheep 1
  2. 2. S. Schoenian 12/12/2011 Two ways to increase profit REDUCE COSTS INCREASE INCOME • Reducing operating costs by • More animals to sell spending less money on feed, • Better quality animals to sell supplies, veterinary medicine (e.g. higher grade). 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 in sheep 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.Profitable production and marketing ofmeat goats and sheep 2
  3. 3. S. Schoenian 12/12/2011 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 priceProfitable production and marketing ofmeat goats and sheep 3
  4. 4. S. Schoenian 12/12/2011 Who eats sheep and 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 our primary 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.Profitable production and marketing ofmeat goats and sheep 4
  5. 5. S. Schoenian 12/12/2011 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.Profitable production and marketing ofmeat goats and sheep 5
  6. 6. S. Schoenian 12/12/2011 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 holidays EID 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.Profitable production and marketing ofmeat goats and sheep 6
  7. 7. S. Schoenian 12/12/2011 Ethnic holidays Holiday 2011 2012 2013 2014 2015 Eid ul-Adha Nov 6 Oct 26 Oct 15 Oct 4 Sept 23 Festival of the Sacrifice Muharramm/Hajra Nov 26 Nov 15 Nov 4 Oct 25 Oct 24 Islamic New Year Mawlid al-Nabi Feb 15 Feb 4 Jan 24 Jan 13 Dec 23 Prophet’s birthday Start of Ramadan Aug 1 Jul 20 Jul 9 Jun 28 Jun 18 Eid ul-Fitr Aug 31 Aug 19 Aug 8 Jul 29 Jul 18 Festival of Fast Breaking Passover / Pesch Apr 19-26 Apr 7-14 Mar 26-Apr 2 Mar 15-22 Apr 4-11 Rosh Hashanah Sep 29-30 Sep 17-18 Sep 5-6 Sep 24-25 Sep 4-5 Chanukkah Dec 21-28 Dec 9-16 Nov 28-Dec 5 Dec 17-24 Dec 7-14 Western (Roman) Easter Apr 24 Apr 8 Mar 31 Apr 20 Apr 5 Eastern Orthodox Easter Apr 24 Apr 15 May 5 Apr 20 Apr 12 Christmas Dec 25 Dec 25 Dec 25 Dec 25 Dec 25 Orthodox Christmas Jan 7 Jan 7 Jan 7 Jan 7 Jan 7 Chinese 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.Profitable production and marketing ofmeat goats and sheep 7
  8. 8. S. Schoenian 12/12/2011 Slaughter options for 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 allows Not for resale 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 market agricultural products Wholesale (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.Profitable production and marketing ofmeat goats and sheep 8
  9. 9. S. Schoenian 12/12/2011 Marketing sheep and goats Wholesale (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 animals 1. Market price + premium 2. Breakeven price + profit margin 3. What the market will bear. The key is repeat customers.Profitable production and marketing ofmeat goats and sheep 9
  10. 10. S. Schoenian 12/12/2011 Know what your animals 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.Profitable production and marketing ofmeat goats and sheep 10
  11. 11. S. Schoenian 12/12/2011 Understanding USDA sheep and lamb grades Conformation 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 sheep and 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.Profitable production and marketing ofmeat goats and sheep 11
  12. 12. S. Schoenian 12/12/2011 Some tips for selling sheep and 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 sheep and goats to a middleman • Know what your livestock are worth. – Know weight – Know grade • Points of negotiation – Transportation – Shrink – PaymentProfitable production and marketing ofmeat goats and sheep 12
  13. 13. S. Schoenian 12/12/2011 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-off Check- • 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 ofmeat goats and sheep 13
  14. 14. S. Schoenian 12/12/2011 Profitable production and marketing of meat goats and sheep Thank you for your attention. Any questions? www.sheepandgoat.comProfitable production and marketing ofmeat goats and sheep 14