Connecting The Dots: Better Profits For Sheep Operations

Sheep meat has been growing in popularity among Spanish-speaking people for decades.  A few years ago, labs were testing public reactions to flavor and breed of sheep meat in Spain, and they concluded the following:

Both pre-slaughter factors [breed and liveweight] should be taken into account in the specifications of quality labels in an attempt to offer consumers a product with homogeneous characteristics, which could help to increase consumer loyalty, especially if the product is similar from one purchase to the next.—Dept. Animal Prod. & Food Science, Univ. of Zaragoza, Spain, Aug 31, 2004

The cost of doing business in sheep boils down to 3 things:  Land, labor and the capital.

      Land can be had cheaper by either renting, or by the traditional method of grazing marginal land no usable for anything else.  Or land can be made more productive via fertilization, rotation, irrigation, etc.

      Labor can be cheapened by taking advantage of guest worker programs, or (better) eliminating labor costs altogether via easy-care breeds, better fencing and better equipment.

      Two conventional ways to cheapen the cost of capital are:  (1) Think big; economies of scale in theory allow ever-cheaper production, which lets us chase ever cheaper lamb prices; or (2) Get a piece of Middlemen’s Pie, taking over more of the steps between you and the consumer, by selling direct to consumers or at least to retailers.

      Consumer satisfaction means more than just low price, however.  A race to the bottom price is less profitable than a race to most preferred product.  Follow the monkey:  It will do just about anything for the taste it prefers, but may just throw that cheapest product back in your face.

Leave a Reply