Pricing based on quality? (split from Wool or Hair)

A place to discuss where and how to market our products. Users can share experiences with value-added enterprises, ask for information on costs, and find out who's paying what for what kind of lambs.
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Randy
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Postby Randy » Wed Apr 05, 2006 10:21 pm

Bill
Lets pretend I got 300 lambs, 135lbs, ready to go,And a feed biil over due.I don't like the price.....WHAT do I do ? Keep the lambs back, stick more feed into em. make them fatter,so that the price is lower yet?
Last fall evey body was expecting $1plus fats this winter . So they drove the feeders to $1.30 plus, corn was cheap, lets lay the pounds on.
Packers started to see more fat, started to drop the price, feeders
started to add pounds to make up the difference. this resulted in a mess of over fat lambs , I heard of fats going thru at 200lbs that sent prices down to .65 A lot of guys took a real bath. I think that once old crop lambs are gone, prices should rebound some what.
Trucking is around $2/mile, a pod will hold 640 feeders, I can give you phone numbers if you want.
You got me curious, these lambs you were selling for a premium, where did they go? a feed lot? or enthnic kill?
And what did you do whit the ones you held back because of price.
acording to my figures, If I held back a 135lb lamb for two weeks I would need .02 more just to cover feed cost. And every day on the lot is one more chance for the beast to die. I buried more market ready lambs then I care to admit to.
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Paul DeWitte
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Postby Paul DeWitte » Wed Apr 05, 2006 11:12 pm

Randy I understand your situation exactly. When you are in an area that does not have a steady supply of the product that you are looking for (quality and numbers both) you have to do the best that you can. Sometimes that is less than desirable.

Bill, I said to Peg after I read the markets in New Holland that you gave the link to, that there is where we should be selling our lambs. Shrink and trucking would eat up any extra advance in price that we got. A whole semi load might be worth looking into but we do not have even a good start on that.

I am convinced that to make serious money on lambs,they will have to bring more than just the local market price. Such as ethnic market, or direct marketing for freezer meat. Any Ideas?

Paul

Bill Fosher
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Postby Bill Fosher » Thu Apr 06, 2006 4:18 am

Hi Randy,

Here are some stats on last year's lamb crop of 1,100:

320 sold as hothouse lambs (45 to 60 lbs, unweaned). Of these, 225 went for $2.25/lb liveweight, mostly for the Roman and Orthodox Easter markets, with some going to people who wanted to raise their own lambs for their freezer. The balance sold to a coop that pays based on carcass weight, minus commission and kill fees, which worked out to about $1.76/lb liveweight.

another 300 or so sold as fats, mostly to the same coop. The price worked out to between $1.10 and $1.25/ live

The balance went for the ethnic kill, mostly at live weights between 70 and 85 lbs. I sold both direct to slaughterhouses and to an order buyer. Price was a little variable, but I would not let a good lamb leave the farm for less than $95. I think the lowest price I accepted was $1.25 for this category of lamb. At one point, they were selling for $1.45.

I did have one lot 50 of what I would consider really good feeder lambs, which I would have fed out if I had been staying on the farm. They averaged 95 lbs, with a range of 90 to 102 lbs and I got $1.25 for them.

I guess the advantage I had was that if I didn't sell a lamb as an Easter lamb, I could sell it for the ethnic kill, and if I didn't sell it there I could put it on feed and grow it out. And I was getting calls nearly every week from slaughterhouses, the coop, or the order buyers looking for *something.*

It has been four years since I sent a lamb to an auction house.
Bill Fosher
Westmoreland, NH

Paul DeWitte
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Postby Paul DeWitte » Thu Apr 06, 2006 7:23 am

Bill, it seems that location has a lot to do with what you get. You are in a more highly populated area than we are here in WI and therefore have a better market. For us to get our lambs to your area it would eat up all of the extra profit in transportation.

The ethnic market either does not exist here or I do not know about it. It may be a population thing, or it may be that someone there (slaughterhouse) has hit on a market and is taking advantage of it. Good for them.

We have sold a few to Muslim friends and co-workers as sacrifice lambs, but they are few and they do not want to pay much extra.

In turn, costs of production in your area may be higher so your breakeven cost would reflect that.

Paul

Randy
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Postby Randy » Thu Apr 06, 2006 8:20 am

Bill
There I knew it!!!! you are not dealing with the standard market channel.
As paul said ''location'' The east coast has or will spend more, then say the mid west. I sell my bottem enders to two ethnic kill plants, they want a certent wt, and only buy at certent times of the year, in lots of 50 to 80 head. Last load went out in Jan. 94lb adv. at $1.10 not bad, but not good as I held them for 6 mos. But its a way to rid of my junk.
Paul you may be right about the cost eating up any profet But.. I have heard of guys doing it. I know I can run my equipment down the road cheaper then the truckers, and I played with the idea of putting together a load of lite lambs and heading east.I just haven't gotten around to getting some real numbers to see if it would really work or not. I believe it is something to take a good hard look at.
Getting back to the ethnic market; its quite large here in wis. But they know that if theysit in at the local sale barn they can get what they need at below market price, again thanks to the hobby farmers.
Those $1.10 lambs I sold, went out his door for $1.65 .55lb in his pocket
But I can tell you that ,you or I will not be able to tap that market.
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Bill Fosher
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Postby Bill Fosher » Thu Apr 06, 2006 10:20 am

HI Randy,

I'm not dealing with a standard market channel because there is no standard market channel in New England. Unless you count the local sale barns, where I have seen 105 lb lambs sell for 30 cents a pound.

Everybody here has to do some amount of fancy marketing, or give their lambs away. I just think there's probably some room for you guys in the midwest to do it to, if you decide you want to hassle with it. And it is a hassle.

I have never sold directly to Muslim customers -- always through a middleman of some sort. I had quite a few come to the farm, and what they wanted was the best lamb for the least money. There was quite a clash of cultures between us because they wanted to dicker and I didn't. I thought they were rude and they thought I was rude. After a while, they stopped coming around.

A Morrocan friend of mine later told me that even he can't stand doing business with his people because they can be so pushy. He said the Arabs are worse, which was also my experience.

What I couldn't get across to these people was that if I didn't sell the lambs to them, one by one, after spending an hour dickering over the price, I could sell them for the same price the next day in lots of 50 to 100 after spending five minutes agreeing on a price. That they weren't doing me a favor.

I was happy to leave that part of the transaction to others.
Bill Fosher

Westmoreland, NH

Randy
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Postby Randy » Thu Apr 06, 2006 7:16 pm

Bill
Now that I think about it, I guess one would not find a feed lot out east.
The closest plant that I know of is in Michigan.
What you said about dealing with the ethnic crowd, is just what I tryed to say. A lot of years ago when the Hmogs starting settleing in I tryed to get in the black chicken market, and the same things happen that you mentioned. After I threw the last one off the yard, I found a middle man, made a little less, but life got easyer.
You said that there is room for us midwest guys up by you. Care to explaine?
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Bill Fosher
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Postby Bill Fosher » Fri Apr 07, 2006 5:39 am

Hi Randy,

There are some pretty good reasons why we don't have feedlots in the Northeast, but they don't have a lot to do with lack of marketing opportunities. They have more to do with corn that goes as high as $220/ton ($6.16/bu) at this time of year if you buy it in full tractor trailer loads, grass hay that goes for $205/ton delivered in big square bales or noses $300/ton if you need small squares. Unskilled labor starting at $9 an hour. I could go on. This is a crazy place to try to make cheap food.

My comment about there being room for you guys in the Midwest was more to do with tactics than with actually shipping lambs this way (although we need them). Simply put, just refusing to sell lambs for less than it costs to produce them. The packers need the lambs at least as much (and probably more, truth be told) than you need their money.

The problem you have, of course, is that they can go down the road and get their lambs a lot easier than they could with me.
Bill Fosher

Westmoreland, NH

Bill Fosher
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Postby Bill Fosher » Fri Apr 07, 2006 5:59 am

Randy,

Just to clarify a little bit: you're taking prices in the dominant market channel in your area. I think there's room for you to step outside that paradigm.

The equivalent in my area would be to send my lambs to the local sale barn. When I chose not to use that marketing channel anymore, I was able to stop taking prices and start negotiating prices. While I wasn't able to get rich doing it, I started to come to know what my lambs were actually worth. And it was a lot more than what the buyers were paying at the local sale barns. Sometimes double.

But there's no doubt that it would be a hell of a lot less work to simply ship them off and take whatever I got. In order to sell my lambs the ways that I did, I had to put a lot of effort into understanding the markets, finding the markets, knowing prices at major markets, and knowing what it would cost buyers to replace my lambs if they didn't buy them.

And I also had to make sure that my lambs were worth the extra that I was asking for them. Good, well-muscled, properly conditioned lambs drawn to order are worth more, and I wasn't afraid to ask for the extra money.

Of course it helps to be in a region where there is a market for any size lamb from 40 pounds to 140, but you have some major advantages where you are as well -- cheap feed and processing infrastructure being the main ones.
Bill Fosher

Westmoreland, NH

Randy
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Location: N.E. Wisconsin

Postby Randy » Sat Apr 15, 2006 10:10 pm

Bill,
There are not that many ways to sell fats here;
direct market 1 or 2 at a time, ''I'' don't have the P. R. skills , and there are a lot of hobby farmers doing it.
Local sale barn, where you pretty much give them away,
Ship to a live auction like St. Paul, trucking and shrink would kill any gains
What I use is the'' Electronic Lamb Auction'' We call in what we have, they put together lots and post them on the net for the major buyers [all six of them] to bid on. That sets our price. Lambs are in fact sold before I load them. I can and have canceled if the price is too low.
The only other thing is , a contract with the packer, But they want a certain number, of uniform lambs on a given date. My supply would make this very hard if not impossible.
And the contracts I looked at have all kinds of discounts built in.
I feel I'm better off just shipping every two weeks, by the end of the year I should adverage out.
Big Horse Farms

A Proud Producer Of American Lamb

greengrazer
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Re: Pricing based on quality? (split from Wool or Hair)

Postby greengrazer » Mon Nov 28, 2016 11:34 am

Been several years since this thread was commented on. Anyone care to revisit and share your observations of change (if any) and if those changes are for better/worse?

Justin-PA
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Re: Pricing based on quality? (split from Wool or Hair)

Postby Justin-PA » Wed Apr 19, 2017 11:39 am

The change I have seen since I started in sheep about 10 years ago is that prices seem to have steadied more in recent years, which is good for us producers. Of course the cyclical changes between holidays is still there. ie here in the Northeast we get excellent prices for light (or hothouse) lambs at Easter and Christmas, and good prices for medium weight lambs around the Muslim holidays.

I have given up on auctions for anything except cull ewes around here. All my lambs go thru packers that sell into NYC. IMO that is the best way to get a fair price. If you grow quality lambs, you will never have to search for a place to sell...they will call you back year after year. If you ship junk...you'll know it.

For example, I just shipped a group of lambs that averaged 45 lbs at about 50 days old. That weight was going onto the trailer, just weaned, still on full feed. They hung at 56% (range was 51% to 63%). I averaged $150/head on lambs that were in my barn for < 2 months. The lambs that were still too light will remain on full feed and I will market around the 4th of July at 80-110 lbs and I should average $200/head on those.

These are not grass-fed lambs. My ewes are grass fed up until lambing, then they come into the barn to lactate 60 days, get dried off, re-bred, and back to pasture (or baleage in the winter). I gave up on finishing lambs on grass in my wet clay-soil worm-factory climate. The two things that screwed me the most and nearly bankrupted me was New Holland Auction and grass-fed lambs. Never again... Now, if I had those irrigated alfalfa fields like Lana and others have out west...I'd bet I'd be singing a different tune. The key is...understanding your sheep, your climate, and your markets. Then decide how to become the best producer you can be.

denice
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Re: Pricing based on quality? (split from Wool or Hair)

Postby denice » Thu Apr 20, 2017 6:16 am

Justin
I totally agree with your KEY statement. Have to know and understand what gets you the $$ and what does not. Adjust accordingly. Grass fed sounds good. It Sounds like you just turn them out on grass, move them around some, you're done. That pretty picture of ewes and lambs out grazing. It doesn't come easily in this part of country.

Matt Miller
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Re: Pricing based on quality? (split from Wool or Hair)

Postby Matt Miller » Tue Apr 25, 2017 6:13 am

Thanks for the insight, Justin. I have also moved away from the auction barn to a local packer and have been finishing all lambs in the barn on full feed. It does feel like you're on the right track when you get calls asking if you have any lambs ready to go. We seem to have found a nice wheelhouse with lambs in the 60-100 lb. range. Cull prices have helped as well and incentivized flock improvement.

What has struck me has been the hit that 100+ lb. lambs have taken at the packer we deal with, who markets mainly to the ethnic demographic in population centers. I have zero incentive to hang onto lambs past 100 lbs. at this point, which suits me fine.

Linda Poole
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Re: Pricing based on quality? (split from Wool or Hair)

Postby Linda Poole » Mon May 01, 2017 9:14 am

Justin-

How do you dry up your ewes at two months post-lambing? I'm pretty sure that I would end up battling mastitis. But your production model is impressive so maybe you've also got a secret to safe early weaning. Thanks.


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