1. S. Schoenian 12/12/2011
Profitable
production and
marketing of
meat goats
and sheep
SUSAN SCHOENIAN
Sheep & Goat Specialist
www.sheepandgoat.com
sschoen@umd.edu
What is PROFIT?
INCOME
MINUS OPERATING COSTS
MINUS FIXED COSTS (OVERHEAD)
EQUALS
NET FARM INCOME OR PROFIT
Profitable production and marketing of
meat goats and sheep 1

2. S. Schoenian 12/12/2011
Two ways to increase profit
REDUCE COSTS INCREASE INCOME
• Reducing operating costs by • More animals to sell
spending less money on feed, • Better quality animals to sell
supplies, veterinary medicine
(e.g. higher grade).
and services, and capital
improvements. • Heavier lambs and kids
• Reduce costs by utilizing • Lower marketing costs
resources more efficiently. • Higher prices
Increase reproductive
efficiency: pounds of quality
offspring weaned per female
exposed for breeding
Current situation in
sheep and goat marketing
• RECORD HIGH PRICES 112-lb. lamb sold for $232 in July.
– Insufficient supply of lamb
and goat in U.S.
• Esp. regional supply
– Strong demand
• Esp. regional demand
• Esp. ethnic demand
– Low value of U.S. dollar
makes imports more
expensive.
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3. S. Schoenian 12/12/2011
BUT…
• Prices won’t always be
this high.
• You don’t always get the
prices you see posted in the
newspaper or on the
internet.
• It’s hard to know what goats
are selling for since they are
often not weighed and
grading is very subjective and
not always consistent.
AND…
• There are many costs
associated with selling
lambs and goats at a
public auction.
• Transportation costs
• Shrinkage
• Yardage
• Sales commission
• Selling price ≠ net price
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4. S. Schoenian 12/12/2011
Who eats sheep
and goat meat?
• The per capita
consumption of lamb and
mutton is low, less than 1
lb. per person.
• Per capita consumption
is much higher among
people of certain
ethnicities.
• The ethnic populations that
eat lamb and goat are
increasing.
Who are our
primary consumers?
Chevon (cabrito) Lamb and mutton
• Hispanics (Latinos) • Muslim
• African Americans
• Muslims • Arabs
• Arabs • South Asians
• East Asians • Others
• South and Central Asians • Christian
– Esp. Orthodox
• Africans • Greeks
• Caribbean Islanders • Russians
• Eastern Europeans
• Ethiopians
On average, Muslim-Americans are
• Jewish
younger, better-educated, and more
affluent than the average American.
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5. S. Schoenian 12/12/2011
What is an ethnic market?
• An ethnic market is a
group of consumers that
share a common cultural
background: race, color,
national origin, religion
or language.
• There are many different
ethnic markets for goat
and lamb.
Ethnic marketing:
sheep and goats
• Different ethnic
groups and individual
customers have
preferences for different
kinds of animals.
• Species
• Sex
• Age
• Weight
• Condition
Know what your customers want.
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6. S. Schoenian 12/12/2011
Ethnic marketing:
sheep and goats
• The demand for lamb
and goat in advance of
certain holidays.
• Religious
– Muslim
– Christian
– Jewish
– Hindu
Know the holidays in which lamb • Non-religious
and goat are in high demand.
Major Muslim holidays
EID is the Arabic word for festival.
• Ramadan
Month of fasting
• Eid ul Fitr
Festival of Fast-Breaking
“Little Eid”
• Eid ul Adha
Festival of the Sacrifice
“Big Eid”
Muslim holidays are based on the • Aqeeqah
sighting of the moon and move Baby-naming ceremony
back ~11 days each year.
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7. S. Schoenian 12/12/2011
Ethnic holidays
http://www.interfaithcalendar.org
Holiday 2011 2012 2013 2014 2015
Eid ul-Adha
Nov 6 Oct 26 Oct 15 Oct 4 Sept 23
Festival of the Sacrifice
Muharramm/Hajra
Nov 26 Nov 15 Nov 4 Oct 25 Oct 24
Islamic New Year
Mawlid al-Nabi
Feb 15 Feb 4 Jan 24 Jan 13 Dec 23
Prophet’s birthday
Start of Ramadan Aug 1 Jul 20 Jul 9 Jun 28 Jun 18
Eid ul-Fitr
Aug 31 Aug 19 Aug 8 Jul 29 Jul 18
Festival of Fast Breaking
Passover / Pesch Apr 19-26 Apr 7-14 Mar 26-Apr 2 Mar 15-22 Apr 4-11
Rosh Hashanah Sep 29-30 Sep 17-18 Sep 5-6 Sep 24-25 Sep 4-5
Chanukkah Dec 21-28 Dec 9-16 Nov 28-Dec 5 Dec 17-24 Dec 7-14
Western (Roman) Easter Apr 24 Apr 8 Mar 31 Apr 20 Apr 5
Eastern Orthodox Easter Apr 24 Apr 15 May 5 Apr 20 Apr 12
Christmas Dec 25 Dec 25 Dec 25 Dec 25 Dec 25
Orthodox Christmas Jan 7 Jan 7 Jan 7 Jan 7 Jan 7
Chinese New Year Feb 3 Jan 23 Feb 10 Jan 31 Feb 19
Ethnic slaughter
• Some ethnic
customers require
animals to be
slaughtered in a
certain way.
• Halal (Muslim)
• Kosher (Jewish)
• African/Caribbean
There is an exemption for • Other
religious (no stun) slaughter.
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8. S. Schoenian 12/12/2011
Slaughter options
for sheep and goats
Custom State Federal
On-farm
exempt inspection inspection
Facilities Federal-state Can sell meat
No inspection cooperation
inspected if labeled
“At least equal
For own For owner’s No
to” federal
consumption consumption inspection restrictions
New policy
Open to allows
Not for resale
interpretation interstate sales
Purpose of inspection is to ensure
wholesomeness of products.
Includes inspection of facility and
animals (ante and post-mortem).
Two general ways to market
agricultural products
Wholesale (commodity)
• Usually a price-taker
• Loss of product identity
• Raw product (commodity)
• Easy and convenient
• Probably more profitable when
prices are high. Retail (direct)
• Usually a price-setter
• Product identity/differentiation
• Value-added
• Usually requires a lot more
time and expense
• More profit potential when prices
are low or fluctuate widely.
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9. S. Schoenian 12/12/2011
Marketing sheep and goats
Wholesale (commodity) Retail (direct)
• Live animal • Live animal
– On-farm sales
– Public auction • Freezer trade
• Local sale barn • Ethnic customers
• Terminal market • Carcass or meat
– Middlemen – Farmer’s market
• Buying station – CSA
– Farm store
• Live market
– Via Internet
• Broker or dealer
– Restaurant
• Direct marketer – Retail store
– Abattoir – Event
Three ways to price animals
1. Market price
+ premium
2. Breakeven price
+ profit margin
3. What the market
will bear.
The key is repeat customers.
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10. S. Schoenian 12/12/2011
Know what your
animals are worth?
• Sale barns are a place
of price discovery.
• Learn how to read a
market report.
– Prices
– Terminology
– Grades
Understanding
USDA goat grades
• Selection 1
Superior meat type
• Selection 2
Average meat type
• Selection 3
Inferior meat type
Grades do not consider fat cover, weight, age, sex, or breed.
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11. S. Schoenian 12/12/2011
Understanding USDA
sheep and lamb grades
Conformation and quality Yield (cutability)
• Prime • 1 - 0.15 in. and less
• Choice • 2 - 0.16 to 0.25 in.
• Good • 3 - 0.26 to 0.35 in.
• Utility • 4 - 0.36 to 0.45 in.
• Cull (sheep only)
• 5 - 0.46 in. and greater.
Ninety percent of lambs grade USDA Choice or Prime. Yield grading is voluntary.
Some tips for selling sheep
and goats through a sale barn
• Put livestock into market at
least one week before
holiday.
• Sell when prices are low
prices supply
supply prices
prices supply
supply prices
• Mark your animals
according to how you want
them sold.
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12. S. Schoenian 12/12/2011
Some tips for selling sheep
and goats through a sale barn
• Do not dock, castrate, or disbud
unless you have to.
• Do not sell animals with dirty
butts or hocks.
• Sell lambs and kids directly off
their dams (unless you plan to
feed them to heavier weights).
• Sell colored goats.
• Make sure you livestock are put
in a clean, uncrowded pen with
food and water.
Some tips for selling sheep
and goats to a middleman
• Know what your
livestock are worth.
– Know weight
– Know grade
• Points of negotiation
– Transportation
– Shrink
– Payment
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13. S. Schoenian 12/12/2011
Direct marketing tips
• Direct marketing shouldn’t
be a way to make a profit in
agriculture, it should be a
way to increase profitability.
• Market your products
honestly.
• It may take a while to build
a loyal customer base.
American Lamb Check-off
Check-
www.lambcheckoff.com
• No matter how you sell
your sheep, you are
obligated to pay the
lamb check-off.
1. One-half cent per lb.
of live sheep
2. 30 cents per head of
lambs purchased for
slaughter
No check-off for goats.
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14. S. Schoenian 12/12/2011
Profitable
production and
marketing of
meat goats
and sheep
Thank you for your attention.
Any questions?
www.sheepandgoat.com
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meat goats and sheep 14