Many small flock owners rely on regular, repeat customers to purchase lambs, but more and more sheep producers are relying on ethnic subgroups as a means of marketing.
Dr. Susan Schoenian, University of Maryland sheep and goat specialist, grew up in the heart of where most sheep and goat meat is consumed in the U.S.: the metro area of Baltimore, Md., and Washington, D.C. She recalls watching customers come to the farm, select an animal and slaughter it on-site.
"The per capita consumption of lamb is very low in this country, less than 1 pound per person, per year," said Schoenian. "But the consumption of lamb is significantly higher among people of certain ethnic and religious groups."
Schoenian noted that population trends and immigration patterns favor an increase in the demand for lamb, mutton and goat meat. Prior to World War II, most immigrants came from Europe, and they weren't traditionally big lamb eaters. More recently, immigrants are coming from many other countries, many of which consume lamb and/or goat for cultural or religious reasons. Due to this trend, the demand for lamb and goat meat should continue to rise.
Another game changer is that about one-third to one-half of available lamb in the U.S. is imported, primarily from New Zealand and Australia. The advantage for domestic producers is that ethnic customers want a fresh product and often prefer freshly slaughtered lamb.
"The mainstream commodity market is going head-to-head with the lamb imports that tend to be more consistent and lower-priced," said Schoenian. "American lamb has many advantages and can often beat the imported product. The imported market can't play that fresh card as well as we can in the fresh market."
Lamb is the preferred meat for three major religious groups: Christians, Muslims and Jews. "It's a religious meat," she said. "These groups will consume goat, but the preference is for lamb or mutton." Schoenian noted that there is often an increase in demand prior to major holidays, but if supply exceeds demand, there's no increase in price. Producers who are aware of significant ethnic holidays can plan ahead and have lambs of the right size at the appropriate time.
The Hale Group, a food and agribusiness consulting firm, is helping to create a road map for future marketing of lamb to assist the American sheep industry in returning to profitable production. The lamb industry has faced several significant challenges over the past few years, including drought, high feed prices and increased import competition. Sheep numbers have dropped dramatically due to these factors.
Although the traditional market has historically been the main market for lamb, that market is declining.
"In the past, traditional commodity markets outsold nontraditional, but now those markets are about equal," said Schoenian. "Over the past several decades, the market share for nontraditional markets has increased. In the traditional market, there's higher volume, and it includes mostly lambs finished in feedlots."
Traditional lambs, which come mainly from large producers, are large-framed and range in size from 120 to 140 pounds finished. "There's a lot of price volatility in this market," noted Schoenian. "The market sets the price for the producer. A long-term decline in the traditional segment of the industry has resulted in loss of infrastructure. The industry is declining, and we are really starting to see the results of loss, including slaughterhouses closing."
In comparison, the nontraditional or ethnic market is usually a lower-volume market, but it is growing and close to the size of the traditional market. Demand usually exceeds supply, and there's more demand for lamb - defined as being less than 1 year of age or a carcass that breaks at the spool joint.
What is the ethnic market? "It's a group of consumers who share a common cultural background. Race, color, national origin, religion or language - there's a common link," explained Schoenian. She said that "ethnic market" is a generic term, and there are many market segments, with consumers in each group having different buying preferences.
The two largest nontraditional market sectors for lamb are Muslims and Hispanics. Muslims come from many different countries and speak different languages, so for marketing purposes, it's important to learn where they're from and what they're looking for. While Muslims are connected by religion, Hispanics have language in common. Mexicans comprise the majority of Hispanics in the U.S., but there are many nationalities represented in that group.
Also notable is that Hispanics are the fastest-growing minority group in the U.S. "The Latin wave is bigger than the baby boomer generation," said Schoenian. "Their buying power has increased by 76 percent since 1990. Their families are larger, they're more likely to cook at home and from scratch, they like fresh ingredients and are willing to spend more money on food than the average American."
While there isn't a good estimate of how many Muslims are in the U.S., the growth rate is high. "The U.S. population growth rate is less than 1 percent per year, and the Muslim growth rate is about 6 percent per year," said Schoenian. "It's about the same size as what the Hispanic community was 25 years ago. The average Muslim is younger than the average American, and they're very well-educated and very affluent."
According to Schoenian, the nontraditional markets have a lot of room to grow due to favorable demographics. "Each year, the immigrants who are coming into this country increase the U.S. population. These folks are interested in eating lamb and goat, particularly first-generation immigrants," she said.
Schoenian added that there's less price sensitivity and volatility in these markets because producers can often negotiate prices. In addition, the market has become competitive with the import market because of the desire for fresh product. Producers can get feedback from consumers and easily learn what their customers prefer, and once a relationship has been established, ethnic customers tend to be loyal to a producer.
There is demand for many different types of lambs and goats within the nontraditional ethnic markets - one size does not fit all. "There are markets for very young, small milk-fed lambs, markets for yearling rams, and everything in between," said Schoenian. "You have to figure out what market you're targeting and see what it takes to meet it. We can involve different breeds and different production systems and feeding programs. You have to make sure you match the market, but there's a lot of variability in the ethnic market about what is needed."
More information regarding population demographics that may be useful for ethnic marketers can be obtained through the U.S. Census Bureau, Pew Research Center, Faith Communities Today, Allied Media Corp. and other resources.
Note: Part 2 will focus on identifying and marketing to ethnic consumers.
The author is a frequent contributor and freelance writer who farms and raises Great Pyrenees in south-central Pennsylvania. Comment or question? Visit http://www.farmingforumsite.com and join in the discussions.