Marketing sheep products

Marketing products from sheepSUSAN SCHOENIAN (Shāy-nē-ŭn)Sheep & Goat SpecialistWestern Maryland Research & Education [email protected] - www.sheepandgoat.com

http://www.slideshare.net/schoenian/marketing-sheep-products

SMALL RUMINANT PROGRAM

Sheep produce many marketable products.

1) Meat

2) Fiber and skins

3) Dairy products

4) Vegetation control

5) Research and bio-medical

(1) MeatThe most important product ($) we get from sheep.

1. Lamb - meat from sheep under one year of age [must have 2 break joints]

U.S. average - 135 lbs. Non-traditional - 60 to 100 lbs. “Hot house” - 35-50 lbs.

2. Yearling mutton - meat from a sheep between 1 and 2 years of age.[has 1 or 2 break joints]

3. Mutton - meat from sheep over one year of age [2 spool joints]

Age determined by teeth in live animal.

Age determined by break/spool joints in carcass.

Lamb consumption in the US

Per capita consumption of lamb and mutton in the US is very low (< 1 lb. per person).

But it is significantly higher among certain ethnic populations, e.g. Muslim, Hispanic, Greek, Italian.

Changing population demographics and immigration patterns favor an increase in the demand for lamb and mutton.

Imports comprise a significant portion of domestic lamb consumption (mostly from Australia and New Zealand).

Despite the low per capita consumption, the US doesn’t produce enough lamb to meet domestic demand.

Four levels of meat inspection

1. Federal (USDA)a) Highest level of inspection

▪ Pre and post-mortem inspection of animal.▪ HACCP plan(s) required.

b) Can sell properly labeled meat.

2. Statea) Mirrors federal regulationsb) Usually limited to intrastate salesc) No state inspection in Maryland.

3. Custom-exempta) Exempt from state or federal inspection.b) Facilities, but not animal, inspectedc) Processed for owner of animald) Meat stamped “not for re-sale”

4. Personal exemption (on-farm)a) Exempt from state or federal inspection.b) Processed by owner (not for re-sale)c) Some states restrict to farmer who raised animal

Religious or ritual slaughter(exempt from humane slaughter laws)

1. Halal - Muslim2. Kosher - Jewish

Two primary marketing options

1. Commoditya) When you sell an

undifferentiated product.

b) When you sell raw materials.

2. Directa) Selling direct to the

consumer or end user.b) Niche or specialty

Satisfying specific market needs.

U.S. LAMB CROP2004-2008

3.6 million head

Federally-inspected slaughter

2.5 million head

Ethnic markets500,000 head

Traditional market sector2 million head

Non-traditional markets

1.3 million head

Ethnic market via sale barns300,000 head

Direct marketed to consumers at

farm gate1 million head

There is a statistical difference between the lamb crop and federally-inspected lamb slaughter

(2004-2008).

U.S. lamb marketNew Holland, PA (L) vs. San Angelo, TX (R)

Lamb marketing options: commodity

1. Public auction sale barn, stockyardsa) Local b) Regional c) Terminald) Speciale) Graded

2. Middlemana) Feederb) Another producerc) Brokerd) Order buyere) Buying station

3. Marketing pool

4. Cooperative

5. Processor abattoir or packer

Lamb marketing options: direct

1. Live animal Custom slaughter

Freezer or locker trade

On-farm slaughterEthnic market

Breeding stock, other

2. Meat: whole or part of carcass, cuts, processed

To the Consumera) Directb) Farm storec) Farmer’s marketd) Internet salese) Via a restaurantf) Via a retail store

Lamb marketing: niche

USDA-certification Organic Grass-fed

Third party certification Humanely-raised Animal welfare approved Sustainable

Producer claim Pasture-raised Natural Grain-fed Other

AmericanCountry-of-origin

American lamb check-off

An assessment on all sheep and lambs sold: 0.7 cent per lb. of live

animal sold 42 cents per head

purchased for slaughter by first handler.

100 lb. animal$0.70 + $0.42 = $1.12

Funds activities of American Lamb Board. Marketing and promotion

www.americanlamb.com

www.lambcheckoff.com

(2) Wool and skins

Wool - soft, curly “hair” that forms the coat of a sheep. Wooled sheep are usually

sheared annually. Fleece weight varies (2-20 lbs.)

2013 avg. fleece weight: 7.3 lbs. Fiber diameter varies from

< 17.7 and >40.2 µm

Pelt - the skin of an animal with the wool, hair, or fur still on it.

1 micron (µm ) – one millionth of a meter

Wool marketing options: commodity

Shearer

Wool pool

Wool warehouse

Fiber co-op

Woolen mill

ExportBlack or colored wool is not acceptable in the commodity wool market, but is

popular among hand spinners and wool craftsmen.

Maryland Wool PoolJune 18, 2014 - Maryland State Fairgrounds

Every June

Wool is sorted into grades: choice, medium, and coarse whiteface; non-whiteface; and short

Sold via sealed bid auction.

Deduction of 5 to 8 cents per pound.

Maryland Sheep Breeders Association membership dues deducted on sales over $40.

Wool prices are usually less than $1 per pound.

Size of pool keeps getting smaller Low prices More hair sheep (no shearing/wool) More direct marketing of wool

Tightly-packed bales of wool weigh 250-300 lbs.

Government program for wool and mohair (price support)

Marketing assistance loans or loan deficiency payments (LDPs) for shorn wool or the wool from unshorn lambs (similar to program for grains).

Must own wool in order to apply for LDP.

Due to higher wool and mohair prices, LDPs have been zero for several years: thus, no LDP payments are being made.

Commodity Loan rate

Graded wool $1.00 per lb.

Ungraded wool $0.40 per lb.

Mohair $4.20 per lb

Loan and LDP rates

Wool marketing options: direct

1. Fleeces (raw)a) Hand spinnersb) Weaversc) Craft makers

2. Processed woola) Clean fleeceb) Rovingc) Yarn

3. Finished productsa) Blanketsb) Clothingc) Beddingd) Specialty

4. Nichea) Organicb) Breed wools

Maryland Sheep & Wool FestivalMay 3-4, 2014 - www.sheepandwool.org

Always first full weekend in May.

Fleece show and sale Wool sheep shows Vendors Craft booths Sheep-to-shawl

contest Shearing contests

and demonstrations Fiber workshops

Unique and innovative uses of wool

Pads for soaking up oil and other chemical spills

Packaging material Temperature-sensitive items

Building insulation Bricks Mulch Diaper covers Coffins Nanotechnology

wound dressings bone graft implants medical sutures

PeltsThe skin of the animal with the fur, wool, or hair still on it.

Commodity Valuable by-product

▪ In some parts of US, pelt value is factored into live animal and carcass prices.

▪ Prices fluctuate (world commodity) Waste product for small processors.

Direct Some producers market their own

pelts for premium prices.▪ Custom tanning

(3) Sheep dairy products

1. Grade A - fluid milkSheep milk is not commonly consumed.

2. Grade B - manufacturing

a) Cheeseb) Yogurtc) Ice creamd) Butter

3. Non-inspecteda) Soap and lotion

Due to its superior qualities, most sheep

milk is made into gourmet cheeses.

DM Protein

Fat Lactose

Ash

Cow 12.8 27.3 28.9 38.3 5.5

Goat 13.5 26.7 29.6 37.8 5.9

Sheep 18.2 24.7 39.0 26.4 4.7

Dairy regulationsMilk (dairy) is the most regulated and inspected food.

Enforced by State Department of Health or the State Department of Agriculture Milk sanitation

Regulations vary by state, but are generally equivalent to cow dairies (or more stringent). Maryland is in the process of

allowing the manufacture and sale of raw milk cheese for certain size operations.

Grade B dairies have less stringent requirements, but if you make your own cheese, there are more requirements.

Animal health Milking barn Milk room Equipment Sanitation Toilet Water supply Waste treatment Regulatory inspection

Dairy marketing options

Commodity Sell milk to a dairy processing

plant▪ Picked up by processor▪ Transport milk to processor▪ Ship frozen milk to processor

Direct Farmstead dairy processing Have cheese or other products

made by a third party vendor. Sell via . . .

▪ Farm store▪ Farmer’s Market▪ Internet sales▪ Restaurants▪ Retail stores▪ Event

Sheep milk can be frozen for up to a year without affecting its cheese-making qualities.

(4) Vegetation control (fee-based)Prescribed (targeted) grazing using sheep and/or goats

Targeted grazing for private landowners and the public sector.

Demand exceeds supply.

Lack of service providers.

Lack of experience. The public seems

more willing to pay for environmental benefits vs. food and fiber. www.eco-goats.com

(5) Research and bio-medical

Research models

Surgical practice

Blood

Milk proteins

Government contracts

Thank you for your attention.

Any questions?

Susan [email protected]

SMALL RUMINANT PROGRAM http://www.slideshare.net/schoenian/marketing-sheep-products