Meaty market lambs
Suffolk x Native lambs
Hair x wool crossbred lambs
Grass-fed lambs
Off to market
San Angelo Stockyards
Sale barn lambs
Boy at market
Abattoir
Lambs at live market
Halal USA
Live market in New York City
Lamb carcasses
Measuring back fat
Halal meat market
Measuring rib eye area
Lamb chops
Lamb for sale
Lamb sausage
Lamb leg steak
Mexican Barbacoa
Lamb pot pie
Whole lamb carcasses on a split
Carving a lamb
Barbados Blackbelly lamb
Lamb Marketing
Most sheep operations derive the majority of the income from the sale of lambs. As a result, lamb prices have a large influence on profitability. There are numerous options for marketing lambs and pros and cons to each.Lamb
Lamb vs. mutton
Lamb is the meat from a sheep that is less than one year of age. Mutton is the meat from a sheep that is older than one year. Mutton has a stronger flavor than lamb. Yearling mutton is intermediate between lamb and mutton and comes from a yearling, a sheep between 1 and 2 years of age. In the live animal, age is determined by the front incisor teeth.
In the carcass, age is determined by the presence or absence of a spool or break joint. The break joint is a cartilaginous area of the cannon bone that is not ossified (bony). This joint ossifies with age to become what is called a spool joint. A lamb carcass has two break joints on the front shanks. The joints are red, moist, and porous. The ribs of a lamb carcass vary in shape and have some redness on the exposed surfaces. A mutton carcass has two spool joints. The ribs are wide, flat, and the color of mature bone. A yearling carcass usually has at least one spool joint.
Demand for lamb
In the United States, the per capita consumption of lamb is very low, less than 1 lb. per person. The "average" American does not not consume much lamb; however, lamb holds a significant meaning in the observances of many religions and is a dietary staple in many parts of the world. Lamb is the preferred meat for many Christian, Jewish, and Muslim holidays.
In the U.S., the largest consumers of lamb are Middle Easterners (primarily Muslims), Greeks (Orthodox Christians), and Hispanics. Most lamb is consumed on the East and West Coasts and in major metropolitan areas where large ethnic populations exist. The demand for lamb is usually inelastic, meaning it is not overly sensitive to price.
Lamb grading standards
Carcass
USDA lamb quality and yield grade standards have been in existence for many years. Quality grades indicate the palatability and eating characteristics of the lamb. The grades are Prime, Choice, Good, and Utility. From 1989 to 2008, more than 90 percent of lamb carcasses graded Choice. Fatter lambs grade Prime. Good and Utility lambs are rare.
Yield grade standards estimate the percentage of closely trimmed, boneless retail cuts from the leg, loin, rib, and shoulder. They are based on the amount of external fat in the carcass. The grades are 1, 2, 3, 4, and 5, with 5 being the fattest. Most lambs grade 2 or 3. In the commodity market, yield grade 1s, 4s, and 5s are usually discriminated in price. 4s and 5s are too fat and heavy, while 1s lack sufficient fat cover and quality.
Live
USDA grades for live lambs are the same as the carcass grades. Because so many lambs grade Choice, some states (e.g. Virginia and West Virginia) split the Choice grade. A Blue-O or Blue (Back) lamb is a Prime or high Choice lamb that is expected to have a higher dressing percentage than a Red-O or Red (Back) lamb.
Some states in the Northeast (e.g. New York) have modified the USDA grading standards to better fit the needs of the ethnic markets. Lambs are graded as Blue, Red, or Green, regardless of weight. Blue lambs are fatter and thicker than red lambs. Green lambs are thin and/or in poor body condition; they are not considered market ready.
Feeder lambs
Feeder lambs are light-weight lambs (60 to 90 lbs.) that are usually sold to feed lots for further finishing. They are sold according to weight and frame size, e.g. large, medium, small. Some states have devised their own grading standards for feeder lambs, primarily separating lambs by weight.
Feeder lamb grades have become less important, as almost any lamb is now deemed a potential slaughter lamb, regardless of weight or condition. Lambs traditionally fed to heavier finish weights are now sometimes bought by ethnic slaughterhouses, which prefer leaner, lighter weight lambs for their holiday kill.
Grading is very useful. It provides a description of livestock for commercial buyers. It allows livestock to be co-mingled at the market place. It provides a uniform means to report prices. With grades and other descriptors, you can compare prices of lambs sold in any part of the United States. Direct marketers can use reported market prices to help them price their products.
View the USDA market report from New Holland, PA =>
Age, weight, and sex
The age and weight at which lambs are marketed varies. Market weight varies from a 30-lb. hot house lamb to a 160-lb. extra heavy commodity lamb. The average weight of a slaughter lamb in the U.S. is about 135 pounds. The ethnic markets tend to prefer lighter weight lambs.
Lambs are marketed between the ages of 2 and 14 months. Two-month old lambs are sold as hot house lambs, whereas some feed lot lambs still have have their milk teeth and spool joints at 14 to 15 months of age. A hot house lamb is a milk-fed lamb that is usually born out-of-season (fall or early winter) and raised indoors. Hot house lambs are a delicacy favored by many Europeons.
Consumers generally show no significant preference for meat from wether, ewe, or ram lambs. Ram lambs are leaner and gain faster than ewe and wether lambs, but some (commodity) markets will discount intact ram lambs.
Shrink (drift)
Shrink is an important component of lamb marketing, especially when negotiating price. Shrink is the loss in a lamb’s total body weight during shipping. A lamb’s shrink is mostly loss of stomach contents or “gut fill” during the first 20 hours off feed. After the first 20 hours, the lamb’s body compensates for restricted water and feed intake by drawing moisture and nutrients from carcass tissue.
Shrink due to trucking is highest in the first 50 to 75 miles. Length of transport increases the amount of shrink. Lambs lose more weight in hot weather than cold weather. Lambs consuming grass or forage diets will shrink more than those consuming concentrate diets. Young lambs shrink more than older lambs. Five to 8 month old lambs usually shrink five percent or more from farm to market weight.
Some buyers will apply a "pencil shrink" to lambs: 3 to 4 percent of the scale weight will be deducted from the lamb. When lambs are sold on the rail, shrink is not important, as gut fill is removed before the carcass is weighed. When making marketing decisions, shrink needs to be considered as a cost. Shrink can be reduced some with proper handling.
Marketing options
Lamb marketing options fit into two broad categories: commodity and direct (to the consumer).
Commodity marketing
Regardless of geographic location, the vast majority of lambs are sold into the commodity market. This would include selling lambs at a public livestock auction; to an order buyer, broker, or dealer; at a buying station; to a feed lot; through a co-op or marketing pool; or to an abattoir. In the commodity market, you are selling a bulk, generic product. Identity is generally lost in the marketing process.
Commodity marketing favors large commercial and low-cost producers and those in close proximity to terminal markets. A terminal market is one in which lambs are bought for immediate slaughter. At many other sale barns, lambs are bought for resale at terminal markets.
Public livestock auctions
Though marketing practices vary by geographic region and size of operation, the most common method to sell lambs is to take them to a public livestock auction (also called auction barn, sale barn, or stockyard). Some sale barns organize special sales prior to the major Christian and Muslim holidays. Special graded sales are usually a better marketing option for quality lambs than weekly sales. Some sales will grade the lambs and co-mingle them into larger lots. Other sale will sell each owner's lambs separately.
There are numerous advantages to selling lambs at an sale barn. It is easy. It is convenient. It is always available. There are usually sales every week. Payment is guaranteed and prompt. There are also several disadvantages. Price is not known ahead of time and can fluctuate widely from week-to-week, as local supply and demand vacillates. There are fees to pay: sales commission, yardage, and insurance. The prices received at local (low volume) sale barns may be significantly less than the prices paid at terminal (high volume) markets. Lambs marketed at sale barns may undergo significant stress.
Public livestock auctions perform several important functions in the lamb industry. They are a place of price discovery. Price discovery is the process of determining price in the marketplace by the interactions of buyers and sellers. It is where supply meets demand. Very often the prices received at auction barns are used to negotiate private treaty sales of lambs. Sale uction barns give small producers more clout in the market place, as larger groups of lambs are almost always more appealing to buyers.
Dealers, brokers, and order buyers
There are several advantages to selling lambs directly to a livestock dealer, broker, or order. It saves the costs associated with selling lambs at an auction barn. Price is negotiated ahead of time. The lambs may be picked up directly from the farm or it may be necessary to transport the lambs to a buying station. When selling lambs in this manner, it is important to know what lambs are worth to make sure a fair price is being paid. The buyer should be licensed and bonded. A cash transaction is recommended.
Marketing alliances and co-ops
Groups of producers sometimes work together to form marketing alliances or co-ops. Usually, a co-op contracts slaughter and sells whole carcass or cuts to grocery chains or other retail outlets. The co-op establishes standards (weight, grade,etc.) for the type of lambs they will purchase.
Three examples of marketing alliances are Mountain States Lamb, Dakota Lamb, and the Scott County Hair Sheep Association. Mountain States Lamb is a cooperative of 127 ranchers in 10 states. They've marketed 1.5 million lambs since their inception in 2003. Dakota Lamb has 184 members from four states. The Scott County (Virginia) Association has 300 member farms, with approximately 15,000 breeding ewes.
Abattoir
Abattoir is the French word for a slaughterhouse or meat processor. Many producers, large and small, market their lambs directly to a processor. The lambs may be purchased live or on a carcass basis. The price may be a spot cash price, a forward price, or a formula price.
Value-based marketing is possible when lambs are marketed directly to the processor. Prices are based on the individual value of each lamb (carcass). Grid pricing offers a base price, with a matrix of premiums and discounts, usually based on carcass weight, yield, and quality grade. "Hitting the grid" can add value to the lamb, while "missing the grid" can reduce the value of the lamb. A pricing grid can be developed for any carcass characteristic with an economic value.
Direct marketing
Direct marketing is when lambs are sold directly to the consumer. Direct marketing takes many forms: freezer lambs; selling lambs at farmers' markets; selling meat via the internet; including lamb in a (community-supported agriculture) subscription; on-farm sales of live animals or meat; and selling wholesale or retail cuts to restaurants or retail outlets. Direct marketing is also called niche and value-added marketing. The volume of product sold is usually much less when lambs are marketed directly to the consumer versus selling commodity lambs.
In direct marketing, a larger share of the consumer's dollar is retained by the producer. Thus, the income potential for direct marketing is substantially higher than for commodity marketing, though costs (processing, transportation, etc.) are also much higher. The labor associated with selling one lamb can be especially high.
Direct marketing favors small-scale producers and those in close proximity to population centers. It favors producers with "people skills." Marketing tends to require a different skill set than producing. Successful direct marketers are passionate about what they are selling. Many experts feel that direct marketing is the only way for small-scale producers to compete with larger producers, due to the economies of scale.
Selling carcasses
Selling whole or half lambs for consumers to put into their freezers is the most common form of direct marketing lamb. "Freezer" lambs are usually sold live. If the lamb is processed in a federally-inspected plant, the lamb can be sold by hanging weight. The producer usually transports the lambs to the processor. The customer provides cutting instructions and pays for processing. The meat is stamped "not-for-resale." Processing charges vary considerably by plant and location. Federally-inspected plants usually charge more than custom-exempt plants.
Customers for the freezer trade vary in the type of lamb they prefer to buy: size, age, diet, etc. Grain-fed lamb is considered to be a premium product, because it produces milder-flavored lamb. At the same time, there is a growing market for grass-fed and naturally-raised lamb. Grass-fed lamb tends to be more healthful. Success in the freezer trade start with having a good processor. Good customer service will lead to repeat customers and referrals.
Meat (retail, case-ready cuts)
More and more producers are selling lamb (and mutton) at farmers' markets. Buying "local" is growing in popularity. In order to sell lamb at a farmers' market, the lamb must be processed in a USDA-inspected plant. The meat must be labeled. Requirements for selling meat at a farmers' market will vary by state and market. Product liability insurance may be required.
There may be licensing requirements.
There many ways to cut up a lamb carcass and customers will vary in their preferences. The five primal cuts of a lamb carcass are the leg, loin, rack, shoulders, and foreshank and breast. Different retails cuts may be obtained from the primal cuts. Sometimes, whole lambs are purchased for roasting. Sometimes, the entire lamb is cut into chunks.
Approximate yield (lbs) of various cuts from lamb carcasses |
||
Carcass weight |
41-55
|
55-65
|
Foresaddle |
21-25 |
25-35 |
Hindsaddle |
20-25 |
25-30 |
Leg |
6-9 |
9-13 |
Loin |
6-8 |
8-11 |
Sirloin |
< 2 |
2-3 |
Tenderloin |
< 0.5 |
0.5-1.5 |
Rack |
4-5 |
5-7 |
Shoulder |
14-19 |
19-23 |
Flank |
< 0.5 |
1-1.5 |
Breast |
< 2 |
2-3 |
Foreshank |
0.5-1 |
1-1.5 |
View chart showing retail cuts of lamb ->
Slaughter options
Slaughter choices dictate direct marketing options for lamb and mutton.
On-farm
USDA regulations permit onfarm slaughter by the producer or owner of the animal. The producer may not slaughter an animal for a customer, but the customer may slaughter it himself. The producer must not assist the customer in any manner. The customer must provide his own knives. Animals must be sold (live) prior to slaughter.
It is important to note that some states do not permit on-farm slaughter by the customer. Producers are advised to check local and state laws pertaining to on-farm slaughter of livestock. Unfortunately, USDA's on-farm slaughter exemption is open to interpretation. Some people will claim that by allowing a customer to slaughter a lamb on a farm, the farm is a "slaughter facility" and requires licensing. Others claim that there is no law that prohibits a person from slaughtering his own livestock.
On-farm slaughter remains an important aspect of the lamb market. Many ethnic customers prefer to perform their own slaughter in accordance with their cultural and religious beliefs. Disallowing on-farm slaughter by the customer could be perceived as a form of religious discrimination. It may compromise the welfare of a lamb. On-farm slaughter spares the stress of transport and allows the producer to ensure that ritual slaughter is performed in a humane manner.
USDA allows the on-farm slaughter of poultry for resale, but not livestock. Eligible poultry producers may process up to 20,000 chickens for resale to the public, but not a single sheep or lamb can be processed for resale to the public.
Download Humane On-Farm Slaughter Poster =>
Custom exempt
Custom-exempt slaughter is slaughter that is not required to be inspected. Facilities are inspected, but the animals are not. The owner of the animal is responsible for inspecting the welfare of the animal that is to be slaugthered. To qualify as custom exempt, the animal must be slaughtered or processed for the owner of the animal for use in the owner's household (or for non-paying guests). Animals must be sold (live) prior to slaughter. Carcass weight can be used to determine price, but it should be converted to live price for the purpose of invoicing. Custom slaughtered meat is stamped "not for resale." Because it is considered non-inspected; it cannot be sold.
Some custom exempt establishments have "live" markets associated with them. At a live market, the customer chooses an animal for slaughter and kills and/or processes it himself or has the custom processor process the lamb according to the customer's needs. Custom exempt slaughter facilities are usually inspected and licensed by the local or state government.
State-inspected
As of August 13, 2007, twenty-seven states had meat inspection programs for products produced and sold within their states. State meat inspection standards must be "at least equal to" federal standards. Most state inspection programs duplicate USDA standards. Yet despite the equality in standards (with USDA), state-inspected meat may not sell in interstate commerce.
In September 2009, USDA’s Food Safety and Inspection Service (FSIS) announced it would publish proposed regulations to implement a new voluntary cooperative program under which selected state-inspected facilities would be eligible to ship meat and poultry products across state lines. According to American Farm Bureau, there are nearly 2,000 state-inspected meat and poultry plants in 27 states.
State meat inspection |
|||
With |
Without |
||
Alabama Arizona Delaware Georgia Illinois Indiana Iowa Kansas Louisiana Maine Minnesota Mississippi Missouri Montana |
North Carolina |
Alaska |
Nebraska Nevada New Hampshire New Jersey New Mexico New York Oregon Pennsylvania Rhode Island South Dakota Tennessee Washington |
Source: http://www.fsis.usda.gov
Last updated August 13, 2007 |
|||
Federally-inspected (USDA)
The highest level of slaughter is federally-inspected slaughter. If a sheep or lamb is slaughtered in a federally-inspected facility, the carcass may sell in interstate commerce. However, to sell meat (wholesale or retail cuts), a product label is required. The label needs to include the producer's name (and logo), the name of the product, ingredients, an inspection legend identifying the processing facility, net weight, and safe-handling instructions. The label must be approved by USDA. Not all meat processors are willing or able to put labels on meat.
USDA (federal) inspection is required for meat sales on-farm, at farmers' markets, via the internet, through CSAs, and to restaurants and retail stores. For sales made on the farm, the producer must have a freezer that maintains 0°F or less. It must be used exclusively to store meat sold to customers. Meat for personal use should be shorted in another freezer. It should have a lock. If meat will be transported to another sale site, the vehicle used for transport must be equipped to maintain frozen or refrigerated products. Sales and distribution of meat usually
require a license.
Download list of USDA-inspected establishments =>
Religious or ritual slaughter
The Humane Slaughter Act requires that animals be rendered insensible prior to their slaughter. This is usually done by electrocution or stunning with a captive bolt gun. Religious or ritual slaughter is exempted from the Humane Slaughter Act. In religious slaughter, the animal is not stunned prior to slaughter. Instead, the jugular veins, carotid arteries, esophagus, and trachea of the animal are severed with a swift, deep cut. Upright restraint should be used in religious slaughter. Animals should never be shackled or hoisted before slaughter.
There is disagreement as to which is a more humane method of slaughter. Because no-stun slaughter looks more "violent" to the onlooker, it is assumed that it is less humane. Research is conflicting. The two primary religious minorities that practice ritual slaughter are Jews (Kosher) and Muslims (Halal). Many Muslim markets are willing to accept pre-slaughter stunning.
Marketing claims
Increasingly marketing claims are being made to distinguish food products in the market place. In the past several years, USDA has legally defined organic, grassfed, and naturally-raised. In order to use these labels, the program standards must be followed. Third-party certification is available for various animal welfare, humane handling, and agricultural sustainability claims.
Lamb cannot be marketed as "hormone-free," as it has naturally-occurring hormones. Any nutritional claims must be substantiated by appropriate data.
Read Marketing Claims for Sheep and Goat Products =>
American Lamb Check-off
Regardless of how lambs (and sheep) are sold and to whom, the check-off is an obligation of all producers. The American Lamb Check-off is assessed at one-half cent per pound of live animal and 30 cents per carcass. The check-off should be collected by the first handler, usually the entity that takes possession of the animal for slaughter, including custom-exempt and ethnic slaughterhouses. First handlers may also include producers, feeders, and direct marketers. Marketing agencies (e.g. auction barns) are not required to pay the check-off, but are required to collect fees from producers.
Assessments must be remitted to the American Lamb Board, 23029 Network Place, Chicago, IL 60673-1230. They need to be sent with the LS-81 monthly remittance report. The lamb check-off funds the American Lamb Board, a 13-member board appointed by the U.S. Secretary of Agriculture, whose charge is to promote American lamb.
<== SHEEP 201 INDEX
Late updated
08-Feb-2010
by Susan Schoenian.
Copyright© 2010. Sheep 101 and 201.
Copyright© 2010. Sheep 101 and 201.