This fact sheet was developed by students enrolled in Purdue's ANSC 442 Sheep Management course in Spring 2001, as a semester project. These fact sheets provide useful information on various topics related to sheep. View the list of fact sheets.


Lamb, From Producer to Consumer

 

Lamb Meat Product Marketing

The sheep and lamb marketing system serves two purposes for consumers and lamb producers. These two purposes are 1) to provide a mechanism for consumers and producers to coordinate production options with that of consumer demands, 2) to provide a vehicle for the transfer of productive resources and products. With that in mind, the sheep and lamb productive system will be discussed from its starting point at the production level, to the end of the cycle, which ends with the consumer.

Ovine Supplies

Sheep and lambs are produced all over the United States. This production is however concentrated mainly in the Western states with about 80% of all stock sheep inventories existing in about 17 of the Western states.

Most meat lamb production is somewhat seasonal. This is mostly due to the fact that lambs exhibit seasonal estrus, meaning that most breeds only breed during one time of the year, which is usually in the fall during the long days. There are some breeds, however that are able to biologically exhibit different breeding patterns and may be able to breed in the spring. Because of the seasonality of sheep production, slaughter numbers are usually highest in the spring and fall, when spring and fall lambs are market ready.

Lamb Prices

Prices for lambs usually follow a seasonal pattern from year to year. As with many markets, prices fluctuate with producers supply and consumers demands. Religious customs and cultural preferences highly drive the production of lamb and its intake in the United States. This strong ethnic drive of consumption results in a high consumption rate of lamb products in the spring, when the meat supplies are usually highest. Also, with any market, prices will be lowest when the supply is the highest and vice versa.

In the past, lamb prices have been affected greatly by the economy. Usually when the economy goes up, so does the consumption of lamb products. "A 1 percent increase in disposable income results in a .21 percent increase in retail lamb prices."(Fresh American Lamb 1986)

Retail vs. Farm Prices

The price that a lamb producer receives for his market lambs is much different than a restaurant owner receives for the sale of a lamb chop. Retail lamb prices are usually much higher than that that the producer receives. The reason for this is that the live animal must be converted to usable retail cuts of meat that the consumer can utilize. Also, highly concentrated restaurant demands that are often based in large cities are often far away from the Western states where many of the lambs are produced. Hence, traveling expenses must also be taken out of the lambs cost as well as the conversion factor from a live animal to a consumable product.

So, you may be wondering what this conversion factor from a live animal to a meat product entails. To give an idea of this conversion, take this into account. It takes about 3.3 pounds of live lamb product to produce 1 pound of boneless, trimmed retail cuts. (Fresh American Lamb 1986) Retail prices take into account marketing, or what value was added to the lamb product. This includes things like processors, distributors, packaging, promotion and display. Over the year, the farm-to-retail spread has increased in the lamb market. Many believe that this is due to an increase in the cost of processing, wholesaling, and retailing.

Lamb Processing

As times change and technology takes over our world and our consumer's demands, the lamb and sheep industry has changed with consumer's demands. A new development has been processing of lamb products directly in the slaughter plants. In this process, the carcass is cut into specific cuts and then vacuum-sealed and shipped to stores in cardboard boxes. This process has shown to be more economical as labor costs have been reduced. Also, with this method, the amount of fat and bone that is packaged has been reduced and therefore, more overall pounds of lamb product can be packaged and sold directly to stores.

This process has also shown to be more economical and efficient for food service buyers. With the vacuum packaging, they can buy only the specific cuts of lamb that they will utilize and do not have to try to find alternative ways of dealing with the cuts that consumers are not strongly demanding.

Grades and Standards

Lamb and mutton (older sheep) are graded by two USDA grading systems: quality grading and yield grading. The purpose of the grading is to aid in ranking of the lambs both as live animals and as meat products. Using the grading systems, products can be more easily priced and marketed according to their given values by the grades.

Quality Grades help in distinguishing the predicted palatability of the meat product. The quality grades for lamb, which is younger sheep usually under a year old, are Prime, Choice, Good, and Utility. Quality grades for older sheep, which are called mutton, are Choice, Good, Utility, and Cull. Quality grades are determined based on flank streaking, conformation, specifically leg conformation scores, and maturity. Since, younger lambs are preferred; mutton must exhibit a higher degree of flank streakings to grade Choice, as compared to younger lambs, which are more easily labeled as Prime with the correct conformation and flank streakings. Prime is the highest and the most consumer demanded quality grade, with a close second in Choice.

The following gives and example of how lamb carcasses are quality graded according to flank streaking and age:

Degree of Flank Streaking

Young Lamb

Older Lamb

Yearling Mutton

Mutton

Abundant

Prime

Prime

Prime

Prime

Mod. Abundant

Prime

Prime

Prime

Prime

Slightly Abundant

Prime

Prime

Prime

Pr/Choice

Moderate

Prime

Prime

Prime/Choice

Choice

Modest

Prime

Prime/Choice

Choice

Choice/Good

Slight

Choice

Choice/Good

Good

Good/Utility

Traces

Choice/Good

Good/Utility

Utility

Utility

Practically Devoid

Good/Utility

Utility

Utility

Utility/Cull

Yield Grades

Yield grades determine differences amongst carcasses between the amount of proportional trimmed meat in comparison to fat and bone in the carcass. There are five yield grades between 1 and 5. The lower the yield grade, the better as this means that the carcass most likely exhibits more pounds of meat as compared to waste (fat, bone, unused by-products).

To determine the yield grades, the external fat thickness is measured between the 12th and 13th ribs of the lamb carcass. Kidney, pelvic, heart fat is also measured subjectively at the slaughterhouse to aid in determining yield grades. Lastly, the leg conformation score is considered, with a higher, larger leg score, making a lower more desirable yield grade. The equation for determining yield grade is as follows:

Yield grade = 1.66 -(.05 x leg conformation score) + (.025 x percentage kidney and pelvic fat) + (6.66 x adjusted fat thickness)

Yield grades are not seen in the store, they are mostly used in meat packing plants. Yield grades are however, an effective method to aid in the pricing of lamb meat carcasses.

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Consumer Choice of Lamb