Opportunity ?

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Sugar Creek
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Location: Central Kentucky

Opportunity ?

Postby Sugar Creek » Fri Oct 03, 2014 8:32 am

Despite record prices (prices previously thought impossible by even the most optimistic) the demand for ground beef has remained strong in the face of declining supplies.
Slaughter cows are bringing over $1.10 a pound and 600 pound Holstein steers well in excess of $2.00. A large percentage of the fed beef coming out of the feedlots at over $1.60 a pound is being made into ground beef to make up for the lowered amount of cow and Holstein steer beef that traditionally went into the hamburger at the food store.

Why is this not an opportunity to expand the market for sheep meat of various types? It would seem to me that cull ewes at 65 cents, yearlings at $1.10 and even fed lambs at $1.60 would be very competitive alternatives to the scarce ground beef that there seems to be such a scramble for at this time.

It would seem to me thew the American Lamb Board could never find a better time to promote some ground mutton or ground yearling lamb product and perhaps permanently expand the acceptance of lamb in the American marketplace.
Fred

Bill Fosher
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Re: Opportunity ?

Postby Bill Fosher » Sat Oct 04, 2014 4:15 am

You might be right, but you're basing your thought on the assumption that the only reason people don't eat ground lamb is that it's more expensive than ground beef. While price is certainly a factor, it's not the only one.

Also, is it good for the industry to be grinding up its breeding stock to try to take advantage of what will surely be a short-term market condition for ground beef? And is it good for us to try to be the low cost alternative to beef, when we know that will only be the case when beef is at record high prices?

My final concern would be supply. I don't know what the actual number is, but my guess would be that the US consumes more ground beef in a long weekend than we could replace with ground lamb in a year.

I actually think we're better off playing to our strengths: developing a market for high-quality, good tasting product that is not an alternative to beef, but a treat in its own right.
Bill Fosher
Westmoreland, NH

Bill Fosher
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Re: Opportunity ?

Postby Bill Fosher » Sat Oct 04, 2014 4:34 am

Just looked it up. In order to replace the ground beef used in the US in 2006, we would have had to grind up about 272 million lambs. Meat consumption has declined since then, so let's call it an even 250 million.
Bill Fosher

Westmoreland, NH

Sugar Creek
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Posts: 440
Joined: Thu Jul 13, 2006 4:07 am
Location: Central Kentucky

Re: Opportunity ?

Postby Sugar Creek » Sun Oct 05, 2014 1:30 pm

I never intended to imply we could replace the shortage of ground beef with mutton and lamb.
I just wanted to point out an opportunity to introduce a broader segment of the American population to how good ground mutton or ground yearling lamb can be. Never before in my experience has lamb been as competitively priced when compared to beef. The item that is in short supply and driving the beef market is hamburger. Perhaps while this remains true, some consumers could be tempted to try ground mutton/lamb, and continue on as customers if they have a favorable experience.

(Ever notice the difficulty in communication on a blog like this? Sometimes we read over what someone says with the idea that is already on our mind.)

As always I acknowledge my limitations and wish the best for all involved in this business.
Fred

Bill Fosher
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Re: Opportunity ?

Postby Bill Fosher » Mon Oct 06, 2014 4:18 am

Hi Fred,

I was using those figures to illustrate that we are not really an alternative to ground beef, but our own product needs to stand on its own. With the price of beef rising, ground lamb or mutton might start to be on the radar of a small number of people for whom the only reason for not trying it in the past was price. But price is not really the main barrier for people who buy beef rather than lamb. It's a question of habit, familiarity, and safety. Even when people say they don't try lamb because it's too expensive, a big part of what they're saying is "I don't try lamb because I don't know how to cook it and I'm afraid I'll ruin it and have to throw out $X worth of meat." Hamburg, they know. They're comfortable with it. They have a billion recipes available to them. Their parents cooked with it. Their neighbors cook with it. It's everywhere.

While we might be able to reach out to consumers now, just pointing out that the price differential is lower isn't the strategy to employ. We would want to make lamb and mutton a destination -- something better than ground beef. Ban the boring burger. And make no mistake about it, Americans are bored with ground beef -- otherwise we wouldn't see burgers being loaded up with bleu cheese, bacon, chipotle sauce, and every other flavor enhancer under the sun.

A lamb burger that stands on its own might very well be less expensive than a beef burger that needs $3 worth of toppings per serving to have any flavor profile, but that's not our way forward.
Bill Fosher

Westmoreland, NH

Sugar Creek
Old Hand
Posts: 440
Joined: Thu Jul 13, 2006 4:07 am
Location: Central Kentucky

Re: Opportunity ?

Postby Sugar Creek » Mon Oct 06, 2014 7:59 am

Thanks.
You make some good points.
They will help me in the decision over whether to stay strictly with the stockyards market or again consider working with a local processor that caters to a more upscale market.
Fred

cjhiemke
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Joined: Fri Oct 15, 2010 4:03 am
Location: Town of Pleasant Springs, WI

Re: Opportunity ?

Postby cjhiemke » Sat Nov 22, 2014 6:22 am

Bill, I appreciate your comments in this older thread. I agree.

A challenge many marketers have is responding to an opportunity in a timely manner. It takes a long time to sell product into a customer. From an ALB perspective, it’s the packers with the customer relationships and it would need to be a large and coordinated campaign to push the ground product as Fred is suggesting. Not to mention we do not have a larger supply of “yearling lamb” right now (that supply comes March through July) and the industry doesn't differentiate that product from “lamb” when we do have the supply.

The reason I wanted to respond to this post is to share some math I’ve calculated for people previously…this is math that shows that despite higher live prices for beef, lamb is still more expensive…
Finished steer price $1.70 per lb live weight / 63% dress / 63% yield to boneless = $4.28/lb for boneless beef
Finished lamb price $1.65 pre lb live weight / 50% dress / 50% yield to boneless = $6.60/lb for boneless lamb
Cody Hiemke
Town of Pleasant Springs, WI
www.facebook.com/MapletonMyndShropshires


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