Thoughts on Lamb Marketing
I’ve had many questions recently on the topic of marketing, so I will put some thoughts on paper. These are my thoughts only, derived from conversations with value chain members and what I’ve seen as developing trends. This information is offered to be used by the producer at their discretion.
The sheep industry has seen strong prices and steady demand for lambs the last few years. However, the industry experienced an unexpected decrease in demand and price late in 2018. I believe there are contributing factors:
- Well above average prices resulted in a price correction. Consumers are willing to pay more for Canadian lamb but when the price spread becomes too great, they will choose a more economical imported product and or a more economical protein source, therefore the demand for Canadian lamb softened.
- Changes going on in the Canadian production and marketing landscape created changes to what historically would have been the normal flow of lambs, change requires adjustment.
In years past when there has been downward pressure on demand and price, the American market was an option. The inability to readily access the American market has all but eliminated this option to relieve supply and price pressures. Working to restore access to this market option is a priority for the Canadian Sheep Federation.
There are several key indicators that point to a strong future for the Canadian lamb industry. Sheep inventories are shrinking in many parts of the world and lamb consumption continues to increase. Increased consumption in Canada is driven by a growing immigrant population and the consumer’s desire for a new dining experience. There’s a consumer preference to purchase local product provided the price difference between imported and local product is reasonable. The opportunity for the Canadian sheep industry is huge.
However; the Canadian sheep industry needs to make some adjustments to the product we produce and how we market our lambs. If we don’t adjust, we are going to have a hard time maintaining our market share; far less growing it. The consumer expects, availability, quality and price value. The quality of the end product is influenced by the lamb at the start of the value chain.
For many years’ producers could pretty much sell any quality, type and breed of lamb they produced. There was often little if any price differentiation between various qualities and or types of lambs. This is changing. There’s growing pressure to match more closely the investment with value. Good quality type lambs will bring good prices; poor-quality lambs and some off-sort breeds are being discounted. Marketing your lambs should be more than just get rid of them, marketing is doing what you can to add value. When value for investment is seen they will pay for it. Knowing your end market and producing the desired lamb for that market must become a priority.
I don’t want to get into the “which is the best breed” discussion. The type of lamb produced is often more important than the breed. There’s often a tremendous variation in the quality and type of lamb produced within breeds. So, I’m not saying you can’t produce whatever breed or type of lamb you want, but what I am saying is you need to produce the lamb that your market wants or be prepared to be discounted accordingly. The best breed for you is the one that meets your goals but remember the best breed or type of lamb for the processor to purchase is the one that meets their goals. Know your end market and produce the desired lamb for that market. I would also encourage you to produce a lamb that has several marketing options.
The timing of when you market your lambs is also very important to success. If you follow the supply and prices trends you will notice seasonal fluctuation. Prices are normally stronger April – July, lamb supply is short, old crop lambs have been harvested and new crop lambs are not in sufficient supply to meet demand. Prices are normally the weakest in fall/early winter, many spring lambs are hitting the market and supply is higher. There’s often a price and demand spike around events on the ethnic calendar and holidays. Strive to market your lambs during times of limited supply or high demand. This management practice is not only good for you the producer, but it’s essential for the processor if we want to grow market share. You can’t enter a new market or increase market share with no hope of being able to supply a consistent quality product. If the Canadian industry wants to maintain and or grow market share, we must work towards providing a more consistent year-round supply of quality lambs. If the industry can do this the opportunity for growth and success is tremendous. The Saskatchewan Sheep Development Board provides marketing services and can arrange sales for producers requesting the service. If you have questions or want to discuss your marketing strategy, I would be happy to assist where I can, call me 306-933-5582 .
Sheep Shape Executive Director Comments
The Saskatchewan Sheep Development Board AGM and Symposium was held on January 11-12, 2019 with approximately 90 producers in attendance. A lot of good information was presented from a strong line up of speakers. Something new this year was the break-out sessions which were well received. It was a very successful event based on the reviews from producers. Please mark your calendars for the next Symposium and AGM January 10-11, 2020 to be held at Manitou Springs Resort and Mineral Spa at Manitou Beach Saskatchewan. We are always looking for topic and speaker ideas for the Symposium so please if you have ideas please let SSDB know.
With lambs on the ground producers begin thinking about market prices. The unexpected softening in demand and prices has created some uncertainty in future prices. However, there are some key indicators that I believe point to a positive future for the lamb industry. I’ve had lots of questions about marketing and it’s a complex topic, so I have decided to write a separate article with some thoughts on the future of lamb marketing, please see in this issue of Sheep Shape.
The SSDB is currently in the process of developing a new five-year strategic plan. Thanks to funding assistance provided through The Saskatchewan Ministry of Agriculture and the Canadian Agriculture Partnership (CAP) Program we were able to secure the services of Ken Ludwig from Short Creek Consulting to help facilitate the development of the new “Strategic Plan”. The producer survey was a very important part of the process, thanks to all producers who took the time to complete the survey, we had good participation. I’ve also received several calls from producers wanting to discuss the survey questions. Thank you so much, your thoughts are helpful and very much appreciated. Watch for the new Strategic Plan in the July issue of Sheep Shape.
There are several assistance programs for producers under the Canadian Agriculture Partnership (CAP) Program, I encourage producers to take advantage of the opportunities provided. There’s been a positive response to the Saskatchewan Assurance Systems Rebate Program for Sheep Producers. A brochure was sent to all producers, information can also be found on our website, if you have any questions please call me.
The “Ewe Planner” update has been completed and available through a free download from the Saskatchewan Ministry of Agriculture website or follow the link on our site. If you require some help with the program, please contact Brad Marceniuk 306-933-5098.
The SSDB has been lobbying for an increase in the minimum payment paid for lambs under the Saskatchewan Wildlife Damage Compensation Program. We are very pleased to report that there are changes being made. A formula using 6 months previous sales history from Ontario and Saskatchewan markets with a wean weight of 60lbs will be used to determine minimum price.
Often lambs are carried off or totally consumed by the predator, there is an option for producers to identify and be compensated for lambs that are missing due to suspected predation. The SSDB together with the SCIC have been involved in a RFID Pilot Project for the last number of years. If you are using the Shearwell Farmworks Program and want to participate in the pilot, please call me at the office.
The Saskatchewan Johne’s Disease Surveillance Program has been renewed for another five years. The Saskatchewan Stock Growers Association (SSGA) is the administrator for the Johne’s program and funding will be provided under the Canadian Agricultural Partnership (CAP) program. All Saskatchewan beef, sheep and goat producers are eligible for the program; however, funding is limited, and applications are approved on a first-come, first-served basis. More information on the program can be found at http://skstockgrowers.com/johnes-disease-surveillance-program , or by calling the Saskatchewan Stock Grower’s Association at 306-757-8523
I encourage producers to mark July 19-21, 2019 on their calendars. These are the dates of the 2019 Grasslands Canadian Classic Sheep Show and Sale in Humboldt. We have invited the Canadian sheep industry to Saskatchewan. Events will include a Canadian purebred show and sale, commercial sheep show and sale, a large trade show, shearing competition, wool working demonstrations, workshops, working dog demonstrations, lamb banquet and more. The schedule of events can be found in this issue of Sheep Shape and on our website. For entry forms and more details click on the Grasslands Canadian Classic on our events page. To host an event such as this, many volunteers are needed, if you would like to help in some way please call me at 306-933-5582. Hope to see you there.
Thought for the day: We can’t solve the problem if we’re not open to change.