Archive for the ‘Marketing’ Category

Connecting The Dots: Better Profits For Sheep Operations

Friday, February 19th, 2010 at 12:30 pm

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.

Impatience With “Price Injustice”

Friday, February 12th, 2010 at 12:30 pm

If Dr. de Waal’s monkeys resent being paid too little, they would also resent the unfairness of having to give up more of that pay than some other monkey to buy the same or similar item.

      “Price injustice” occurs at the supermarket when American sheep growers find it hard to match low foreign production costs.   Those foreigners can graze their sheep year-round in fenced, unmanned paddocks.  They only actually handle their sheep 3 to 4 times a year.  Most American growers must winter the sheep laboriously on costly hay, silage and/or feed.  Our grazing land costs more than foreign lands, too.  About the only expense left for us to cut is labor costs, so we get our nation’s leaders to let foreign workers come and work for a fraction of what we’d have to legally pay Americans.  Elected leaders find this very cheery:  Cheap food equals more votes.

      Meanwhile, in towns and cities across America, happy shoppers (who don’t know better, but think they do) look at the price of local vs. foreign lamb, and often buy based on that perceived “price injustice.”  In doing so, they’re forgetting that:

  • Foreign lamb production relies heavily on tons of predator poisons and livestock sprays and dips that townsfolk banned American stockmen from using.  Those bans were started long enough ago that today they forget to buy the American lamb they used to lecture us would be better without the chemicals.
  • Only American sheep can help keep America’s wild lands and margins greener, more beautiful, healthier and freer of the invasive, non-native plants already destroying some regions’ ability to nurture wildlife.  Buying local lamb is a cheaper, tastier way than the usual chemical methods of dealing with these problems.
  • The slight extra cost of American lamb helps pay for the production of the American wool that clothes our brave soldiers—family members and friends—with durable, comfortable, non-flammable, low-stink, super-silent apparel. This wool provides vital hygienic and anti-microbial traits amid all that nasty Third-World squalor while also shielding from the enemies’ fire-breathing weapons.

If they hadn’t forgotten these things, then they might very well go out of their way to pay extra for superior, meatier, fresher local lamb.

      So we have to remind them.

      And the best place to do that is face to face, while they’re paying us at least $250 per head. They get superb meat, fresher and cheaper than they ever could get at a store, plus a real live grower’s guarantee that this lamb will taste just like last time.

A Foray Into Mutton

Tuesday, January 26th, 2010 at 12:30 pm

Prices for sheep of mutton age are low; not quite a third of the price per pound paid for lambs, according to each issue’s “Sale Barn Prices” tables in sheep!  A systematized sheep operation must normally sell at least one cull ewe or ram for every 6 to 12 lambs sold.

      Of course, the best growers always factor a “ewe depreciation deduction” into each year’s lamb crops, on top of wintering expenses, plus summer grazing cost for all of them.  But suppose cull sheep fetched half the money a lamb brought, instead of just a third.  How much more a sheep operation might return if mutton were promoted as the true delicacy that it is!

      If an old ewe sells for $45.00 today, then half again more would make $67.50.  If a grower got $1 profit from an old $45 ewe before, then he’d get $23.50 now.  Over 23 times the profit!

      A plan like that might even justify fattening the old gals up a bit, adding a little “plumpness” to the profit!

      Instead, old ewes today are often just old bags of bones when sold.  Much of this meat goes into pet food and Third World countries at 18 to 40 cents/lb.  Sadly, this can be true of the lesser cuts of top-quality lamb, too.  Ah well, who can begrudge them a cheap gourmet meal (even if at our expense)?  Their poverty was forced on them when past leaders postponed impossible debts onto today’s citizens.  For the same reasons, and the way America is trending nowadays, there may soon be demand again in the U.S. too for those cheap lamb cuts.