goatsheepmarketing
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S. Schoenian 12/12/2011
Profitable production and marketing of
meat goats and sheep 1
Profitable Profitable production and production and
marketing of marketing of meat goats meat goats and sheepand sheep
SUSAN SCHOENIANSheep & Goat Specialist
www.sheepandgoat.com
What is PROFIT?What is PROFIT?
INCOME
MINUS OPERATING COSTS
MINUS FIXED COSTS (OVERHEAD)
EQUALS
NET FARM INCOME OR PROFIT
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REDUCE COSTS
• Reducing operating costs by spending less money on feed, supplies, veterinary medicine and services, and capital improvements.
• Reduce costs by utilizing resources more efficiently.
� Increase reproductive efficiency: pounds of quality offspring weaned per female exposed for breeding
INCREASE INCOME
• More animals to sell
• Better quality animals to sell (e.g. higher grade).
• Heavier lambs and kids
• Lower marketing costs
• Higher prices
Two ways to increase profitTwo ways to increase profit
Current situation in Current situation in
sheep and goat marketingsheep and goat marketing
• RECORD HIGH PRICES
– 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.
112-lb. lamb sold for $232 in July.
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BUT…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…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
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Who eats sheep Who eats sheep
and goat meat?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 Who are our
primary consumers?primary consumers?
Chevon (cabrito)
• Hispanics (Latinos)
• Muslims
• Arabs
• East Asians
• South and Central Asians
• Africans
• Caribbean Islanders
Lamb and mutton
• Muslim• African Americans
• Arabs
• South Asians
• Others
• Christian– Esp. Orthodox
• Greeks
• Russians
• Eastern Europeans
• Ethiopians
• JewishOn average, Muslim-Americans are
younger, better-educated, and more
affluent than the average American.
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What is an ethnic market?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:Ethnic marketing:
sheep and goatssheep 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.
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Ethnic marketing:Ethnic marketing:
sheep and goatssheep and goats
• The demand for lamb and goat in advance of certain holidays.
• Religious
– Muslim
– Christian
– Jewish
– Hindu
• Non-religiousKnow the holidays in which lamb
and goat are in high demand.
Major Muslim Major Muslim holidaysholidaysEID is the Arabic word for festival.EID is the Arabic word for festival.
• RamadanMonth of fasting
• Eid ul FitrFestival of Fast-Breaking
“Little Eid”
• Eid ul AdhaFestival of the Sacrifice
“Big Eid”
• AqeeqahBaby-naming ceremony
Muslim holidays are based on the
sighting of the moon and move
back ~11 days each year.
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Ethnic holidaysEthnic holidayshttp://www.interfaithcalendar.org
Holiday 2011 2012 2013 2014 2015
Eid ul-Adha
Festival of the SacrificeNov 6 Oct 26 Oct 15 Oct 4 Sept 23
Muharramm/Hajra
Islamic New YearNov 26 Nov 15 Nov 4 Oct 25 Oct 24
Mawlid al-Nabi
Prophet’s birthdayFeb 15 Feb 4 Jan 24 Jan 13 Dec 23
Start of Ramadan Aug 1 Jul 20 Jul 9 Jun 28 Jun 18
Eid ul-Fitr
Festival of Fast BreakingAug 31 Aug 19 Aug 8 Jul 29 Jul 18
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 slaughterEthnic slaughter
• Some ethnic customers require animals to be slaughtered in a certain way.
• Halal (Muslim)
• Kosher (Jewish)
• African/Caribbean
• OtherThere is an exemption for
religious (no stun) slaughter.
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Slaughter optionsSlaughter options
for sheep and goatsfor sheep and goats
On-farm
No inspection
For own consumption
Open to interpretation
Custom exempt
Facilities inspected
For owner’s consumption
Not for resale
State inspection
Federal-state cooperation
“At least equal to” federal inspection
New policy allows
interstate sales
Federal inspection
Can sell meat if labeled
No restrictions
Purpose of inspection is to ensure
wholesomeness of products.
Includes inspection of facility and
animals (ante and post-mortem).
Two general ways to marketTwo general ways to market
agricultural productsagricultural 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.
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Marketing sheep and goatsMarketing sheep and goats
Wholesale (commodity)
• Live animal
– Public auction
• Local sale barn
• Terminal market
– Middlemen
• Buying station
• Live market
• Broker or dealer
• Direct marketer
– Abattoir
Retail (direct)
• Live animal– On-farm sales
• Freezer trade
• Ethnic customers
• Carcass or meat – Farmer’s market
– CSA
– Farm store
– Via Internet
– Restaurant
– Retail store
– Event
Three ways to price animalsThree ways to price animals
1. Market price + premium
2. Breakeven price + profit margin
3. What the market will bear.
The key is repeat customers.
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Know what your Know what your
animals are worth?animals are worth?
• Sale barns are a place
of price discovery.
• Learn how to read a
market report.
– Prices
– Terminology
– Grades
UnderstandingUnderstanding
USDA goat gradesUSDA goat grades
• Selection 1Superior meat type
• Selection 2Average meat type
• Selection 3Inferior meat type
Grades do not consider fat cover, weight, age, sex, or breed.
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Understanding USDA Understanding USDA
sheep and lamb gradessheep and lamb grades
Conformation and quality
• Prime
• Choice
• Good
• Utility
• Cull (sheep only)
Yield (cutability)
• 1 - 0.15 in. and less
• 2 - 0.16 to 0.25 in.
• 3 - 0.26 to 0.35 in.
• 4 - 0.36 to 0.45 in.
• 5 - 0.46 in. and greater.
Ninety percent of lambs grade USDA Choice or Prime. Yield grading is voluntary.
Some tips for selling sheep Some tips for selling sheep
and goats through a sale barnand 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.
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Some tips for selling sheep Some tips for selling sheep
and goats through a sale barnand 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 Some tips for selling sheep
and goats to a middlemanand goats to a middleman
• Know what your livestock are worth.
– Know weight
– Know grade
• Points of negotiation
– Transportation
– Shrink
– Payment
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Direct marketing tipsDirect 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 CheckAmerican Lamb Check--offoffwww.lambcheckoff.comwww.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.
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Profitable Profitable production and production and
marketing of marketing of meat goats meat goats and sheepand sheep
Thank you for your attention.
Any questions?
www.sheepandgoat.com