Ethnic marketing of lamb and mutton: Part 4. Your production plan

Richard Ehrhardt Ph.D.Small Ruminant SpecialistMichigan State University

Topics:

•Optimizing breeding, feeding and management systems for specific ethnic markets

•Estimating cost of production and evaluating marketing options

Similarities and differences of specific ethnic demand in 2 market regions:

• Metro NYC lamb market: Milk fed lamb: Italian 35-45 lbs , Greek 45-55 lbs peak demand

Christmas and Easter, low demand otherwise Muslim/halal lamb:70-80 lbs liveweight, lean product acceptable,

peak demand Eid al-Fitr, Eid al-Adha but decent demand year round Greek restaurant trade-70-80 lb well finished lamb, demand

throughout the year but highest during outdoor cooking weather. Lots of farm gate sales, little farmer to retailer, many lambs sold

directly to wholesalers who distributes to small retailers, some wholesalers and retailers buy from public markets (New Holland, others)

• Metro Detroit (principally Dearborn): Milk fed lamb: exactly the same specifications and demand cycle as

NYC but much smaller market, lower prices Muslim/halal lamb and Greek restaurant trade mixed together into

category of “lite fat” lambs, 80-115 lbs, finished lamb with uniform fat cover preferred, less emphasis on lean lamb

Lots of farm gate sales, no farm to wholesale or retail, lots of lambs sold both to wholesalers and retailers at public market

Ethnic markets are diverse, each with unique dynamics:

• Markets vary greatly in degree of specification and in demand dynamics:

Demand is relatively consistent and product specifications less rigid in some markets

Demand is short lived and intense with very specific requirements in others

Demand and specifications of various ethnic markets can be complimentary thus increasing market options

Milk fed lamb market: Intense and short-lived• How big is this market?• Timing of Western and Orthodox (Greek) Easter holidays

affect marketing dynamics:Price lower when holidays are on the same dayBest scenario for sustained demand (and profit) is when

Greek follows Western Easter.• Premiums paid for finished, muscular, high-yielding lambs• Best suited for accelerated production schemes as cost of

production is likely too high for annual lambing systems• Decision to participate in this market should include

evaluation of the profit of selling the same lambs later at heavier weights• No lamb feeding facilities needed, facilities can be

optimized for lambing and nursing moms and babies

Accelerated production systems:

• 8 month system: 3 lambing periods in 2 years

• STAR system: 5 lambing periods in 3 years (7.2 month intervals).

Cornell STAR® system

Milk fed lamb market specifications:• Young lambs with light meat color that are well finished-

fast growth needed to meet age and finish requirements• Lambs sold directly off moms, gaining >0.60 lbs/ day

• GeneticsMaternal: aseasonal and prolific, modest frame size with muscle: Finn, Dorset,

Ile de France, RomanovRams: Modest frame size, early growth pattern, heavy muscling, aseasonal for

spring breeding: Ile de France, Dorset, Texel, Southdown?• Management:

7-9 month birth intervalsHigh plane of maternal nutritionIndoor rearing of lambs with access to creep feedMales not castratedLamb sold directly off of dams-not weanedProximity of slaughter house to farm is important as these lambs shrink and

loose quality quickly

Matching genetics to production system and market endpoints:

1. Growth: highly related to mature size but there is also variation in shape of growth curve.

0 50 100 150 2000

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Days post birth

Prop

ortio

n of

mat

ure

size

Ile de France

Suffolk

.

Ehrhardt R A et al. J. Nutr. 2003;133:4196-4201

337 g/d 0.74 lb/day0.32 lb/day

17 22 33 45(lb)

Generalities regarding Muslim/Halal markets• Large market in many regions• Low marketing/promotion effort by industry and farmers• Consistent demand with clear peaks• Market standards vary:

Quality standards ill defined: uniform fat cover but not overly fat (less than 0.2 inch SQ over 12th rib; yield grade <3)Inconsistent premium for qualitySmaller carcasses desired (<60 lbs) compared to “traditional” marketPremiums sometimes paid for intact males and “unblemished” animalsDemand for quality, mature animals

• Quality standards can often be met with grazing/forage-based, low input, low cost production systems• Marketing experience suggest that this market may be trending

towards demand for larger lambs (previous 40 lb carcass standard may be increasing to 50-60 lb)

What is the target carcass for the Muslim market?

Genetics and management for Muslim market• Genetics:

Maternal lines: <170 lbs maternal size, prolific, parasite resistant?Many breed possibilities, “hair” sheep certainly fit this profile

Sire lines: Efficiencies gained by use of larger mature size, terminal siresLeaner standards (?) favor large terminal sires however extreme size

perhaps not ideal in smaller ewes in a pasture based system (higher growth offset by greater mortality)

• Management:Lambs can be fed on presumably lower cost feeding systems

(forage/grazing based) with zero or limited grain finishing as slower grown, leaner carcasses fit market specifications

Good management is required to negate pasture system limitations: higher predation risk, lower energy feeds, parasitism

Source: Dr. David Thomas, UW-Madison

Matching genetics to production system and market endpoints:

1. Growth: highly related to mature size

20 40 60 80 100 120 140 160 180 2000

50

100

150

200

250

Days post birth

Body

wei

ght (

lbs)

Ile de France

Suffolk

•Efficient systems that use terminal sires also use “maternal” sires to produce replacement ewes.

102

105

108

111

114

117

EFFECTS OF SIRE BREEDS ACCOUNTING FORBOTH GROWTH AND SURVIVAL

216-

DAY

WEI

GHT

CO

RREC

TED

FOR

LAM

B SU

RVIV

AL, L

B

Dorper

Texel

Katahdin

FinnRomanov

Ramb.

Suffolk

Comp.

Dorset

Data provided by Dr. KA Leymaster, unpublished

Brassica Grain

Average Daily Gain (lb/d) 0.384 0.76

Intake (% of bodyweight) 5.1 4.1

Feed:Gain 10.5 4.0

Cost of gain ($/lb) 0.25 0.60

Lamb growth, intake, efficiency and cost of gain in lambs grazing brassicas vs. fed grain in a feedlot•Dorset x Finn x Rambouillet x Targhee x Ile de France lambs in the during the 70-90 lb growth phase

What is the cost of production for various ethnic market production schemes?

•True cost of productions calculations are achieved via a process requiring refinement and adjustment over time-a laudatory goal!

•Use estimates to get the ball rolling and then refine

•Major costs of production:FeedFacilitiesLabor

Budget calculator suggestion: http://www.omafra.gov.on.ca/english/livestock/sheep/business.html

Hot house Muslim Hot House/Muslim

Annual Annual Accelerated

Farm feed $/ewe/yr 130 100 160Facility $/ewe/yr 40 10 45

Labor $/ewe/yr 40 30 55

Total $/ewe/yr 210 140 260

$/lamb 110 144 140Lambs sold/ewe/yr 1.5 1.4 2.3

$/ewe/yr 165 201.6 322

Return on feed and labor -45 61.6 62

Partial budget estimates for 3 ethnic market scenarios

Cost of Lamb production Cost of ewe production

Weight Feed: Feed $ Feed/ Feed $/ Lambs sold/ Ewe Feed $/ Total Market Market $/ $ lamb

(lbs) Gain $/lb lamb ewe/year ewe/year lamb sold Feed$/lamb $/lb lamb -feed

40 1 0.15 140 2.2 64 64 3 120 56

50 2.5 0.15 3.8 140 2.2 64 67 2.8 140 73

60 3.5 0.15 9.0 140 2.2 64 73 2.5 150 77

70 3.65 0.15 14.5 140 2.2 64 78 2.2 154 76

80 3.8 0.15 20.2 140 2.2 64 84 2 160 76

90 4 0.15 26.2 140 2.2 64 90 1.8 162 72

100 4.3 0.15 32.6 140 2.2 64 96 1.6 160 64

110 4.8 0.15 39.8 140 2.2 64 103 1.6 176 73

120 5.8 0.15 48.5 140 2.2 64 112 1.6 192 80

130 7 0.15 59.0 140 2.2 64 123 1.6 208 85

140 8.5 0.15 71.8 140 2.2 64 135 1.6 224 89

Note: Risk and yardage not accounted for in this scenario

Lamb return scenario from early November 2013

Summary:•Ethnic markets are diverse and vary greatly in carcass specifications and seasonal demand•Market diversity and seasonal demand can be complimentary in nature and mesh efficiently with accelerated production systems.•Marketing options can be evaluated with spreadsheet calculators to optimize marketing plans•Hot house production costs are high and generally only profitable when targeted using an accelerated production system•Muslim market standards are less specific and are almost always a more profitable target of lower input, pasture-based production systems.•Good management is imperative for profit in all production systems.

Richard Ehrhardt Ph.D.Email: ehrhard5@msu.eduOffice: (517) 353-2906Cell: (517) 899-0040