AN OVERVIEW OF SHEEP AND

GOAT MARKETING

Susan SchoenianSheep & Goat Specialist

W. Maryland Research & Education Centersschoen@umd.edu – 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 Extensionsschoen@umd.edu – 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

sschoen@umd.edu – 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.