By AMY TRINIDAD
Sheep Industry News Editor

(March 1, 2010)  Last fall, the American Sheep Industry Association sponsored research from which several surveys were developed to help quantify the non- traditional lamb market in the United States. In the results, which were released at the joint Lamb Council/American Lamb Board meeting at the American Sheep Industry Association (ASI)/National Lamb Feeders Association Convention in Nashville, it became apparent that sheep inventory numbers may be larger than previously reported by the U.S. Department of Agriculture’s National Agriculture Statistics Service (NASS).

Part of the reason for the study is that feeder lamb availability has been decreasing and there has been a discrepancy between federally inspected slaughter numbers and the estimated lamb crop. In fact this new research estimates the discrepancy at nearly 1.2 million head per year. Therefore, a portion of American lambs don’t show up in the federally inspected slaughter numbers.

Over the years, federally inspected slaughter has declined; however, the non-traditional lamb slaughter market has held steady. NASS reported 2.3 million head of lambs were slaughtered in 2008, but if all the lambs sold through non-traditional markets were included in the count, the number of lambs processed in this county could be as high as 3.5 million.

“This survey suggests that there are more sheep in the United States than estimated in recent years and that more people are eating lamb than thought,” said Julie Stepanek Shiflett, Ph.D., of Juniper Economic Consulting, who conducted the study.

A number of research methods were used to determine these results. Phone surveys were used to collect information from the top lamb packers, smaller and primarily ethnic packers and Agricultural Marketing Service reporters at  various auctions. In addition, sheep producers and ethnic consumers completed surveys.

Based on the results from the packer portion of the survey, the volume of lamb channeled into the non-traditional market – ethnic and custom slaughter – by top packers is estimated at nearly 11,000 head per week, which is 25 percent of the average weekly federally inspected slaughter. And the ‘natural’ product line is estimated at 3,100 head per week.

Results from the smaller packer survey concluded that their lamb dressed weights range from 30 pounds to 60 pounds, which is significantly lighter than the 70-pound dressed weight averaged by the top packers. The volume of lambs slaughtered by these packers range from 30 to 40 head a week to as high as 500 head per week and these packers’ markets are generally wholesale and not retail direct to consumers.

Another significant find is that an estimated 300,000 head of lambs are likely channeled into the ethnic market through livestock auctions; carcass yield is apparently an important demand factor in this sector.

One of the  most significant results that came out of the producer portion of the survey is that an estimated 995,370 lambs are sold direct from producer to consumer from the farm which means that nearly 1 million lambs are missing from national production data.

Some of the reasons that motivate direct sales, according to producers, are because the lambs are grass fed, ‘natural,’ healthy, local, maintain consistency, are from a known or trusted source and due to the unavailability of American lamb in their local grocery stores.

The consumer portion of the survey was a targeted sample of consumers. The important finding from this section was that minority/ethnic lamb consumers (about 35 percent of the population) consumed an estimated 170 million pounds of lamb in the past year which is 58 percent of the 294 million pounds of the total U.S. lamb supply (including imports).

In addition, the survey revealed:

• 43 percent of minority consumers eat lamb;
• 73 percent ate lamb at home in the past
     year;
• 62 percent ate lamb away from home;
• 3.25 pounds of lamb is consumed per person
     annually at home; and
• 2.37 pounds of lamb is consumed per person
     annually away from home.

“Lamb is an everyday meal for a majority of those who responded,” explained Shiflett, stating that 78 percent indicated that they ate lamb at home for an everyday meal.

 Lamb consumption in the United States could grow exponentially. By 2050, minority groups will be the new majority. The U.S. Census Bureau reported that minorities, now roughly one-third of the U.S. population, are expected to become the majority in 2042, with the nation projected to be 54 percent minority in 2050. The Pew Research Center estimated that by 2050, the Caucasian population will shrink from 67 percent of the population to 47 percent; the Hispanic population will grow from 14 percent to 29 percent; African Americans will hold at about 13 percent; and Asians will grow from 5 percent to 9 percent. It is likely that persistence in traditional, cultural and religious practices by these minorities will continue to favor lamb in meals. 

Gary Williams, Ph.D., professor of agricultural economics for Texas A&M University, followed up on Shiflett’s findings pointing out possible marketing strategies this information presents.

First off, if the possible 1 million undocumented lambs were directed into a more traditional, commercial marketing channel, it could present the opportunity for increased competition from packers, a reduced cost of production and an increase in value-added product.

Secondly, a marketing strategy could be developed to target ethnic lamb sales geographically as consumption is concentrated in southern California and New York City. In fact, 20 percent of ethnic lamb consumers are from California, which accounts for only 7 percent of the U.S. ethnic population and 13 percent of ethnic lamb consumers are from New York, which accounts for only 3 percent of the U.S. ethnic population.

Another marketing strategy for this market is to target retail over foodservice sales to ethnic consumers since almost 75 percent of the ethnic lamb consumers indicated they eat lamb at home.

And the final strategy Williams suggested is that this market provides an opportunity to sell more American lamb as it has all the characteristics the ethnic market values, such as meat yield, natural, trusted source, consistent, local and availability.

To view the full report on the study, visit www.sheepusa.org.