AN OVERVIEW OF SHEEP AND
GOAT MARKETING
Susan SchoenianSheep & Goat Specialist
W. Maryland Research & Education [email protected] – www.sheepandgoat.com
THE U.S SHEEP INDUSTRY HAS BEEN IN A PERPETUAL STATE OF DECLINE SINCE THE END OF WWII.
However, there are pockets of sustained growth: Northeast
and Southeast.
HAIR SHEEP ARE HERE TO STAY.
Most of the growth in sheep numbers in the
Southeast is attributed to hair
sheep.
HAIR SHEEP ARE WELL-SUITED TO THE ETHNIC AND OTHER NONTRADITIONAL MARKETS.
The ethnic markets tend to favor lighter
weight lambs.
THE MEAT GOAT INDUSTRY CONTINUES TO GROW.
The meat goat and sheep industries are
closely linked.
THE PER CAPITA CONSUMPTION OF LAMB IS QUITE LOW (ONLY ~1 LB PER PERSON).
But it is significantly higher among people of certain
ethnic groups and in certain geographical locations.
1. 3.25 lbs1 (at home)2. 2.37 lbs1 (away from
home)
1 Pew Research Center
MINORITY POPULATIONS CONSUME 58 PERCENT OF THE TOTAL U.S. LAMB SUPPLY.
Yet, they comprise only 35 percent of
the population.
1. General population growthreplacement + immigration
2. Changing composition of population (by 2050)1:
1. White: 67 → 47 percent2. Hispanic: 14 → 29 percent3. Asian: 5 → 9 percent4. Black: 13 ↔13 percent
WHY THE DEMAND FOR LAMB (AND GOAT) SHOULD INCREASE
2 Pew Research Center
HOW DO MINORITY POPULATIONS DIFFER?
Among some populations
1) More likely to eat lamb and goat.
2) Bigger families.
3) Spend more of their disposable income on food.
4) Income levels are increasing faster than the average American.
5) Less price sensitive.
6) Demand is more consistent across income levels.
GOD LOVES LAMB.
Muslim, Jewish, and Christian/Orthodox
populations consume lamb (sometimes goat) during
specific times of the year in observation of their
religion.
WE HAVE BEEN EXPERIENCING RECORD-HIGH LAMB PRICES.
But are they profitable for all segments of the
industry (probably not) and can they be
sustained (probably not).
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THE TOP SIX LAMB PACKERS ACCOUNT FOR APPROXIMATELY 70 TO 80 PERCENT OF LAMB SLAUGHTER.
However, it is estimated that 1.3 million head
are channeled into nontraditional lamb
markets.
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U.S. LAMB CROP2004-2008
3.6 million head
Federally-inspected slaughter
2.5 million head
Ethnic markets
500,000 head
Traditional market sector2 million head
Non-traditional markets1.3 million head
Ethnic market via sale barns300,000 head
Direct marketed to consumers at farm gate
1 million head
There is a statistical difference between the lamb crop and federally-inspected lamb slaughter
(2004-2008).
POTENTIAL EFFECTS OF NON-TRADITIONAL MARKETS ON TRADITIONAL MARKETS
1) Food safety concerns regarding on-farm slaughter
2) Higher slaughter costs
1) Light weight lambs
2) Religious slaughter
3) Reduced supply of lambs
3) Negative effect on industry’s infrastructure
1) Reduced supply of lambs
2) High cost of feeder lambs
U.S. Kid Crop
Inspected slaughter827,300
headFederally- inspected slaughter
~620,000 head
State inspected slaughter
~207,300 head
Non-inspected slaughter
Custom
exempt?
On-farm
?
How many goats are unaccounted for?
FOUR MAJOR FOOD TRENDS HAVE BEEN IDENTIFIED.
1) Health2) Convenience3) Indulgence4) “Going Green”
RECOMMENDEDNontraditional Lamb Marketing in the United States:
Characteristics and Marketing Strategies, February 2010.
Changes in the Sheep Industry in the United States: Making the Transition from Tradition, September 2008.
If you keep doing what you're doing, you'll keep getting what you're getting.
…Unknown
LAMB MARKETING CHANNELS
Marketing lamb cuts 18
On-farm slaughter 12
Farmer’s markets 10
LAMB CONSUMPTION
ETHNIC MARKETING OF
SHEEP AND GOATS
Susan SchoenianSheep & Goat Specialist
University of Maryland [email protected] – www.sheepandgoat.com
2009 POPULATION DEMOGRAPHICS
Source: http://quickfacts.census.gov/qfd/states/39000.html
Ohio USA
Population 11,542.645 307,006,550
% White, Non-Hispanic 84.7 79.6
% Hispanic/Latino 2.8 15.8
% Black/African-American 12.1 12.9
% Asian 1.6 4.6
% American Indian 0.3 1.0
% foreign born 2000 3.0 11.1
Per capita income 1999 $21,003 $21,857
Median household income 2008
$48,011 $52,029
MOSQUES IN OHIO 48 Mosques listed on
http://islamicvalley.com
Mosque in Toledo, Ohio
SPECIALTY AND DIRECT
MARKETINGSusan Schoenian
Sheep & Goat SpecialistUniversity of Maryland Extension
[email protected] – www.sheepandgoat.com
DIRECT MARKETING
1. Direct sales – sales of lambs and goats directly to packers
2. Direct marketing – selling lambs and goats directly to the general public or niche markets Freezer market Ethnic/religious markets Retail food stores Restaurants
PRODUCER MOTIVATION FOR DIRECT MARKETING Dealing in the cash market Perceived price premium Convenience of repeat business
FREEZER TRADE Probably the most
common method of direct marketing.
Sheep and goats can be slaughtered at USDA, state-inspected, or custom-exempt plant.
No labeling is required.
RESTAURANTS Fresh and local food Challenges
All cutsYear-round supply
FARMERS’ MARKETS 10 percent of producers sell lamb,
mutton, or goat at farmers’ markets.
FARMERS’ MARKETS Sheep and goats
must be processed in a USDA-inspected facility.
Product must be labeled at facility.
Must have proper storage for meat.
Must have meat handler’s license.
FARMER’ MARKETS
Top three reasons for not purchasing meat and/or poultry at a farmers’ market:
Cost86% were willing to pay more for local meat and poultry at a farmers’ market
Convenience
Food safety concerns
Source: Meat and Poultry Buying at Farmers’ Markets: A survey of shoppers at four markets in Oregon
CSA’SCOMMUNITY SUPPORTED AGRICULTURE
1970’s Japan 1985 U.S. Today, almost 1,500 CSA’s
A group of people who share in both the production and consumption of agricultural output.
Most CSA farms are organic, diverse in the variety of production, and focused on fruits and/or vegetables.
Some CSA farms provide meat and dairy products to their members for an additional fee.
$500-$800 per share Selling “shares” of meat.
SPECIALTYPRODUCT OF A DISTINCTIVE KIND OR PARTICULAR SUPERIORITY
USDA certification Grass-fed Naturally-raised Organic
Third party certification Grass-fed Sustainably-produced Humanely-raised
Welfare-certified
Other Grain-fed Pasture-raised Local
consumer driven science-based
=
USDA CERTIFICATION Grass-fed
100% forage diet No grain or grain by-products Temporary confinement allowed
Naturally-raised Vaccines okay No antibiotics No growth promotants Coccidiostats okay, but
must be on label.
Organic No antibiotics No growth promotants No anthelmintics* No coccidiostats Vaccines okay Feed and bedding organic
consumer driven science-based
=
THIRD PARTY CERTIFICATION American Grassfed Association-certified
100% forage diet No temporary confinement No antibiotics No growth promotants
Food Alliance Certified No antibiotics No growth promotants No GMO’s Protect soil and water
quality Humane treatment consumer driven science-
based=
ANIMAL WELFARE
Certified humane-raised and handled Animal Welfare Approved®? American humane certified
consumer driven science-based
=
LOCAL FOOD (I) The locality or
region in which the final product is marketed, so that the total distance that the product is transported is less than 400 miles from the origin of the product; or
(II) the State in which the product is produced.
Source: H.R.2419
DEVELOP YOUR OWN STANDARDS
Grain-fed
Pasture-raised
No synthetic hormones
No sub-therapeutic antibiotics
No animal by-products fed
Breed identity
WHY YOU CAN’T PUT ON THE LABEL
Hormone-free All meat has hormones in it.
More conjugated linoleic acid (CLA)Unless you have your meat tested.
Better ratio of omega-3: omega 6 fatty acidsUnless you have your meat tested.
Not implanted with hormones (goats)There is no implant FDA-approved for goats.
No ruminant meat and bone meal fedit is not legal to feed ruminant meat and bone meal to other ruminants.
Antibiotic-freeIf you use coccidiostats.
AMERICAN MUSLIMS
1) Islam is fastest growing religion in the U.S.
2) Annual growth is 6% vs. 0.9% for the U.S.
3) Eight million Muslims in America; 1 million more in Canada.
4) Same size community as Hispanics were 25 years ago
5) American Muslims are younger, better educated, and more affluent than the average American.
HISPANIC AMERICANS
1) Subcultures from over 20 different countries in Central and South America, the Caribbean and Spain.
2) Fastest growing minority group.
3) 49% live in Texas or California.
4) The Latin wave is bigger than the baby boomer generation.
5) 76 percent increase in buying power since 1990.
6) Bigger families.