The Future of Lamb · the American Lamb Board Data Analytics Sq cut shoulder, 45% Lamb shoulder...

The Future of Lamb

Brief Introduction

• Grew up on family’s sheep, cattle and hay ranch in Northern California• Still raise sheep today

• First job out of college was going to work for Superior Farms• 24 years later, I’m still here

• Member of the American Lamb Board• Past President of the California Wool Growers Association

Today’s Topics

• Inventories and markets in the U.S. and world wide

• Do trade challenges with China affect the U.S. sheep industry?

• Consumer Trends• What are we doing to sell more lamb?• What is our vision for Innovation in the Industry

World/US Lamb Market

Federally Inspected Slaughter

Imperial Valley

104,000

89,000

75,000

90,000

75,000

0

20,000

40,000

60,000

80,000

100,000

120,000

2014‐2015 2015‐2016 2016‐2017 2017‐2018 2018‐2019

Colorado Feedlot Inventory

020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000220,000240,000260,000280,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2018


020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000220,000240,000260,000280,000


2018 2019


107,311

74,301

020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000220,000240,000260,000280,000


2018 2019

Down 33,010 Head


020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000220,000240,000260,000280,000


2018 2019 5 Year Ave

LM_LM352 Comprehensive

$120.00

$125.00

$130.00

$135.00

$140.00

$145.00

$150.00

$155.00

$160.00

$165.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

2018


$120.00

$125.00

$130.00

$135.00

$140.00

$145.00

$150.00

$155.00

$160.00

$165.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

2018 2019


$147.75

$154.04

$120.00

$125.00

$130.00

$135.00

$140.00

$145.00

$150.00

$155.00

$160.00

$165.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

2018 2019

Australia

Exchange Rate

WORLD SHEEP INDUSTRY

US Sheep Industry

Stronger U.S. Dollar

AU Heavy Lamb vs. US Carcass/USD

AUS vs. US Lamb by Cut

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

$18.00

Leg, Trotter Off Shoulder, Sq Cut Rack, Fr Cap Off Loin, 0" whole

Wholesale Price ComparisonJan‐Jul 2019

Import USDA

AUS vs. US by Cut Premium

2%5%

45%

72%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Leg, Trotter Off Shoulder, Sq Cut Rack, Fr Cap Off Loin, 0" whole

% Above ImportJan‐Jul 2019

USDA

US Lamb Exports

• $13.2 million in value for Jan.‐June 2019 • 17% higher than same period last year

• $1.73 million in value for June 2019 • 21% lower than last June

• 7,783 metric tons (17.2 million pounds) in volume for Jan.‐June 2019 • 42% higher than same period last year

• 1,073 metric tons (2.4 million pounds) in June• 6% higher than last June

(USDA statistics compiled by USMEF)

(All totals include muscle cuts and variety meat)

Worldwide Middle Class Growth

29%

32%

35%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Asia Pacific Australasia Eastern Europe Latin America Middle East andAfrica

North America Western Europe

Share of Global Disposable Income

2013 2018 2023

Source: Euromonitor International, Constant 2018 Prices, Fixed Exchange Rates

China Specifically

29%

32%

35%

13%15%

18%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2013 2018 2023

Share of Global Disposable Income

Asia Pacific China


Asian Market Importance

0

5

10

15

20

25

30

35

40

45

Number of Households with Disposable Income over $25,000 USD

2018 2023

0

20

40

60

80

100

120

140

160

180

Million ho

useh

olds


USDA National Cold StorageLamb and Mutton (Million Pounds)

0

5

10

15

20

25

30

35

40

45


2018


0

5

10

15

20

25

30

35

40

45


2018 2019


0

5

10

15

20

25

30

35

40

45


2018 2019

38 Mil / 42 = 905,000 Head


0

5

10

15

20

25

30

35

40

45


2018 2019 5 year Ave

Pelt Market

Source: USDA WEEKLY NATIONAL LAMB MARKET SUMMARY

Unshorn Supreme Pelt Market

$‐

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

2017


$‐

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

2017 2018


$(1.00)

$‐

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

2017 2018 2019

Consumer Trends

Key Consumer Trends

• Across the broad spectrum, consumers are increasingly seeking these attributes in their food choices:• Humanely raised / cared for• Local• Antibiotic Free / No added Hormones• Sustainably raised

• Millennial Foodies are also seeking:• Authentic experiences• Bold flavors• A broad array of cuisines and protein types

Packaging for Retail• Highlighting our producer families

We know that category success starts with store teams• We generate excitement by sponsoring sales contests for meat managers/departments

• Contest example: meat manager with highest sales during first 2 months of program to receive iPad.

Store Engagement

We provide talking points for store teams to educate consumers on lamb nutrition and share our brand message

Store Talking Points

POSRecipe booksDividers/rail stripsOn‐pack couponsCuts & cooking infoPhotos/videosTalking point cardsShirts, hats, etc.

Marketing Support

In‐store demos introduce consumers to lamb and drive consumer engagement.

We have seen great success with our lamb tasting demos.

Once consumers get a taste, most come back for more.

Chart shows consumer response during instore sampling event. 5,000 samples were distributed.

Consumer feedback during event:

3% product samples lift during event19% product sales lift post‐event(4 weeks pre‐event versus 4 weeks post‐event)

Marketing Strategy

CONSUMERS WANT – ABF

Shoppers focus on convenience and in any given month, shoppers purchase meat from 3 places in the store.

Trending Product Offerings

Cook In a Bag – Frozen Legs

• In partnership with Kroger we launched a new ABF Cook in the Bag (CIB) leg for Kroger’s private brand, Simple Truth.

• Simple preparation for consumers from the freezer to the oven.• Seasoned legs have exceeded standard leg sales in Walmart this last year

We analyze and share item performance to help drive category decisions• Data sharing from retail partner

allows for deep dive analysis• Access to item movement by

store/region will allow Superior Farms to assist with product optimization

• Average sales by item per store/week will give visibility to targeted sales goals• Aides promotional planning• Assists with assortment management

• Provide industry insights from the American Lamb Board

Data Analytics

Sq cut shoulder,

45%

Lamb shoulder chop ABF VSP, 27%

Lamb leg steak ABF VSP, 9%

Lamb loin chop ABF VSP, 7%

Veal Bnls Shoulder Chops VSP,

6%

Lamb frozen ground ABF ,

6%

Item Performance

Carving the Path for Retail Growth

New Product Innovation

Proven and True New Products

New Products Launched 2019

Retail Lamb and Beef Gyro Sausage

Retail Lamb and Pork Fennel Sausage

Retail Lamb and Pork Southwest Sausage

Pre‐cooked Lamb Meatball

Pre‐Cooked Fine Wood Herb Leg of Lamb

Products in the Pipeline

Retail Vindaloo and Osso Buco Launch end of September

Pre‐cooked Lamb Meatball

Hopeful launch October

Pre‐Cooked FinewoodHerb Leg of Lamb

Lamb Merguez Sausage

2020 Ideas and Thoughts

Cooked Lamb Denver Ribs

Lamb Bone Broth

Cooked Shank

Culinary Institute of America

Partner Feedback on Carcass Quality

Electronic/Camera Grading

‐ Dixon ‐ Official USDA Grade‐ RFID readers in pens and plant linking each lamb to camera digitally

‐ Converted all CA fairs to EID

‐ Denver – Implementation in late 2019/early 2020

Update on the Camera

• Changes to our Standard Operating Procedures approved by USDA

• USDA Graders Labor Union had to approve the process on grading, sorting and shipping procedures

It hasn’t been easy

• Key for the Camera belongs to USDA, and only they can turn it on every morning

1. Side and rear view images of the carcass USDA Yield Grade USDA Quality Grade

2. Projected Primal Cut Weights• Leg, Rack, Loin, Neck, Breast, Trotter, Shoulder

3. Calculated Ovine Carcass Cutability (OCC)• % yield for retail cuts

Data Collection

Electronic Identification (EID) Readers

EID Data Collection points

Feedback LoopProducer EID

+ MgtSoftware

EID Data Collection

• Starts with Producer and their data base• Livestock pens at the plant

EID Data Collection

Reader on the line matches up with chipped hooks

EID Data Collection

Chipped hooks tied to individual carcass image of the grading camera


+ MgtSoftware

EID Read at Plant

Camera ties to EID

Producer Portal App


+ MgtSoftware

EID Read at Plant

Camera ties to EID

Data in Producer Portal

Producer Portal

• Hot Weight 78.4 lbs

• Yield Grade 2

• Quality Grade Choice

• OCC 53.7 lbs

• Legs 26.1 lbs

• Loins 8.9 lbs

• Neck 1.7 lbs

• Trotters 3.5 lbs

• Breast 9.2 lbs

• Rack 8.7 lbs

• Sq Cut Shoulder 20.1 lbs


+ MgtSoftware

EID Read at Plant

Camera ties to EID


Download Data to MgtSoftware

• Full transparency through Producer Portal• Individual lamb performance • Lot performance• Track lambs through birth to slaughter.

• Complete feedback loop• Packer to feeder to producer to

seedstock owners

Data Collection

• Potential to improve:• Efficiencies• Genetics• Production methods

Data Collection

Flock54


+ MgtSoftware

EID Read at Plant

Camera ties to EID



Flock 54 Parentage Genotypes

Primary Goal:• Create a reasonable cost genetic test• Increase flock efficiency• Increase producer margins by reducing costs

• Increase the number lambs in the US flock

Secondary Goal:• Improve carcass consistency• Improve plant yield/production efficiencies

Why is Superior Farms doing this?

What is it?

• Low cost genotype marker panel• Collaboration with University of Idaho• $16 ‐ $20 per test

• Determines Parentage• Single Gene Traits• Multi Gene Traits

Strong indicators – Single gene traits• Disease resistance

• Scrapie, OPP, spider, glycogen storage, etc.

• Twinning potential• Fleece variation• Yellow fat• Double muscling (callipyge)• Horned or Polled

What does the panel provide?

Indicators or QTLs(multi gene traits)• Milk quality and quantity• Wool and staple length and quality• Meat quality

Parentage test• Identify sires in group breeding• Pair lambs with sires, mothers

What does the panel provide?

Producer collects sample

How Does It Work?

Tissue Sample• Ear Notch• Tail at Docking• Blood Tubes• TSU

Producer collects sample

Analyze

ScrapieParentageInbreedingTwinning

SNP Markers

Extract DNA

Genotype

How Does It Work?

On Farm Applicability

Sheep ID Fecundity/TwinningGene

High Milk Yield Gene Horned/Polled Gene

Ewe Lamb 1 Yes No Horn

Ewe Lamb 2 No No Horn

Ewe Lamb 3 Yes Yes Polled

Ewe Lamb 4 Yes Yes Horn

DNA Test Results


+ MgtSoftware

EID Read at Plant

Camera ties to EID



Flock 54 Parentage Genotypes

Ewe Financing

Ewe Financing and Long Term ContractTerms:

• SF will advance up to 50% of the value of the ewe

• Producer contracts the lamb crop from the ewes

• Payment to the loan advance will be deducted as the lambs are delivered

• Interest at five percent (5%) APR, and will be deducted in full on the final load of lambs

Ewe Financing and Long Term Contract

• Example:

• Producer receives an advance in the amount of $30,000 to purchase 300 ewes. (purchase price was $60,000)

• Producer commits to deliver the lamb crop from these ewes for the next 3 years to Superior Farms.

• Each year, a deduction of $10,000 will be taken from each delivery of lambs within the delivery dates set forth in the contract.

• When the final load of lambs is delivered the interest will be paid on the total advance/loan.

The Future of Lamb · the American Lamb Board Data Analytics Sq cut shoulder, 45% Lamb shoulder...

Documents

Transcript of The Future of Lamb · the American Lamb Board Data Analytics Sq cut shoulder, 45% Lamb shoulder...