ethnic marketing options for lamb and mutton
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Ethnic marketing of lamb and mutton
Part III. Understanding and evaluating your options
SUSAN SCHOENIANSheep & Goat Specialist
University of Maryland Extensionsschoen@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. Middleman3. 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, yardage, 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.7-
Jan
21-J
an
4-Fe
b
18-F
eb
4-M
ar
18-M
ar
1-Ap
r
15-A
pr
29-A
pr
13-M
ay
27-M
ay
10-J
un
24-J
un
8-Ju
l
22-J
ul
5-Au
g
19-A
ug
2-Se
p
16-S
ep
30-S
ep
14-O
ct
28-O
ct
11-N
ov
25-N
ov
$100
$120
$140
$160
$180
$200
$220
$240
Price per cwt, ~70 lb. lambs, Prime and Choice, YG 2-3New Holland, Pennsylvania
Western EasterMar 31
Festival of the SacrificeOct 15
RamadanJul 9- Aug 8
Orthodox Easter (May 5)
7-Ja
n11
-Jan
15-J
an19
-Jan
23-J
an27
-Jan
31-J
an4-
Feb
8-Fe
b12
-Feb
16-F
eb20
-Feb
24-F
eb28
-Feb
4-M
ar8-
Mar
12-M
ar16
-Mar
20-M
ar24
-Mar
28-M
ar1-
Apr
5-Ap
r9-
Apr
13-A
pr17
-Apr
21-A
pr25
-Apr
29-A
pr3-
May
7-M
ay11
-May
15-M
ay19
-May
23-M
ay27
-May
31-M
ay4-
Jun
8-Ju
n12
-Jun
16-J
un20
-Jun
24-J
un28
-Jun
2-Ju
l6-
Jul
10-J
ul14
-Jul
18-J
ul22
-Jul
26-J
ul30
-Jul
3-Au
g7-
Aug
11-A
ug15
-Aug
19-A
ug23
-Aug
27-A
ug31
-Aug
4-Se
p8-
Sep
12-S
ep16
-Sep
20-S
ep24
-Sep
28-S
ep2-
Oct
6-O
ct10
-Oct
14-O
ct18
-Oct
22-O
ct26
-Oct
30-O
ct3-
Nov
7-N
ov11
-Nov
15-N
ov19
-Nov
23-N
ov27
-Nov
1-D
ec5-
Dec
1000
1500
2000
2500
3000
3500
4000Number sheep sold at New Holland Sales Stables in 2013
$148
$154
$136
$214
$191
$163
$182
$182
$230
Supply impacts prices.
$183
$172
$193
$204
Prices for Prime & Choice, YG 2-3
major holidays
Quality (grade) has an effect on prices.
7-Jan16-Ja
n25-Ja
n3-Fe
b
12-Feb
21-Feb2-M
ar
11-Mar
20-Mar
29-Mar
7-Apr
16-Apr
25-Apr
4-May
13-May
22-May
31-May
9-Jun
18-Jun
27-Jun
6-Jul
15-Jul
24-Jul
2-Aug
11-Aug
20-Aug
29-Aug
7-Sep
16-Sep
25-Sep4-O
ct
13-Oct
22-Oct
31-Oct9-N
ov
18-Nov
27-Nov
6-Dec
$80
$100
$120
$140
$160
$180
$200
$220
$240
$260
Price per cwt, 70-lb. lambs @ New Holland, PennsylvaniaChoice & Prime, 2-3 Choice & Prime, 3-4 Good & Choice, 1-3 Utility & Good, 1-2
Effect of quality (grade) on goat prices
$70
$90
$110
$130
$150
$170
$190
60-80 lb kids, $ per head (weighted average)New Holland, Pennsylvania USA
April 1 -November, 4, 2013
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• Opportunity to negotiate
– Price– Shrink– Delivery– Contract
• Price known ahead of time• Low cost method
– No selling fees– No processing costs
• Low labor
CONS• Payment risk
[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.
Pros and cons of marketing livestock to a middleman
Direct marketing live animals
• Different options1. Cash-and-carry2. Custom slaughter
Mobile slaughter3. On-farm slaughter
(where legal)
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)
Pros and cons of direct marketing live animals
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) Farm storeb) Farmer’s marketc) CSAd) Internet salese) Ethnic restaurantf) Ethnic storeg) Ethnic events
Pros and cons of direct marketing meat
PROS• 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.
CONS• 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 time-consuming
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-offwww.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 assessments1. Producer (and feeder)
$0.007 per lb. sheep sold2. 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• 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 agency• Marketing agencies, while
exempt from the check-off, 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. lambThe assessment for a 100-lb. lamb is $1.12 (100 lbs. x $0.007/lb + $0.42/head).
Sell at local sale barn1. Sale barn deducts producer
portion of check-off ($0.70) from sale proceeds.
2. Whoever eventually slaughters the lamb pays the first handler portion of check-off ($0.42) and remits entire amount of check-off ($1.12) to Lamb Board.
Lamb sold at Farmer’s Market1. Producer is both producer and first
handler.2. Producer pays producer
($0.007/lb. and first handler portion ($0.42/head) of check-off.
3. Produce remits both portions of check-off ($1.12) to Lamb board.
Sell freezer lamb to customer1. Producer is both producer and
first handler.2. Producer pays producer
($0.007/lb. and first handler portion ($0.42/head) of check-off.
3. Produce remits both portions of check-off ($1.12) to Lamb board.
Sell live animal to processor1. Processer deducts producer
portion of check-off ($0.70) from purchase price.
2. Processor pays first handler portion of check-off ($0.42).
3. Processor remits total check-off ($1.12) to Lamb Board.
Check-off examples for 100 lb. lambThe assessment for a 100-lb. lamb is $1.12 (100 lbs. x $0.007/lb + $0.42/head).
Sell at local sale barn1. Sale barn deducts producer
portion of check-off ($0.70) from sale proceeds.
2. Whoever eventually slaughters the lamb pays the first handler portion of check-off ($0.42) and remits entire amount of check-off ($1.12) to Lamb Board.
Lamb sold at Farmer’s Market1. Producer is both producer and first
handler.2. Producer pays producer
($0.007/lb. and first handler portion ($0.42/head) of check-off.
3. Produce remits both portions of check-off ($1.12) to Lamb board.
Sell freezer lamb to customer1. Producer is both producer and
first handler.2. Producer pays producer
($0.007/lb. and first handler portion ($0.42/head) of check-off.
3. Produce remits both portions of check-off ($1.12) to Lamb board.
Sell live animal to processor1. Processer deducts producer
portion of check-off ($0.70) from purchase price.
2. Processor pays first handler portion of check-off ($0.42).
3. Processor remits total check-off ($1.12) to Lamb Board.
State check-off programsPayment to state check-off programs is mandatory.
State Mandatory assessmentWeb site
California $0.08 per pound of wool
Colorado$0.25 per headhttp://www.coloradosheep.org/sheep---wool-authority.html
Indiana$0.005 x value of sheep soldhttp://www.hoosieragtoday.com/indiana-sheep-and-wool-checkoff-assessment-to-begin-dec-1/
Iowa$0.10 per head$0.02 per lb. of wool
http://www.iowasheep.com/
Kentucky$0.005 x value of sheep and goats soldhttps://kysheepandgoat.org/Check_Off.html
Ohio$0.005 x value of sheep sold$0.001 per lb. of wool
http://www.ohiosheep.org/oswp.html
Oregon $0.50 per headhttp://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.
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