Producing and Selling Sheep and Goats
to the Ethnic/Religious Meat Markets

by Susan Schoenian Area Agent, Sheep and Goats Western Maryland Research & Education Center Maryland Cooperative Extension Date created or revised:   26-Jan-2005

The per capita consumption of sheep and goat meat in the United States is less than one pound per person. Americans (or immigrants) of Northern European descent traditionally do not consume much lamb or goat; however, lamb and goat hold a significant meaning in the observances of many religions and are a dietary staple in many countries. In the U.S., the largest consumers of lamb are Middle Easterners, Greeks, and Hispanics. Goat consumers include Middle Easterners, Hispanics, Asians, Africans, and Caribbean Islanders. Population demographics and immigration patterns generally favor an increase in demand for lamb and goat.

Most lamb and goat is consumed on the East and West Coasts and in major metropolitan areas; however, ethnic/religious markets can be developed anywhere where ethnic populations exist (e.g. college towns, rural areas where foreign labor is utilized). The demand for sheep and goats generally increases prior to various religious observances. The type of sheep or goat (age, weight, sex, condition, etc.) and manner in which it is to be slaughtered (Halal, Kosher) depends upon the ethnic/religious group and the holiday. The table below lists some of the religious observances (for the next 3 years) in which lamb and goat is commonly consumed:

Muslim holidays occur 10 to 11 days earlier each year and cannot be predicted with exact certainty since they are based on a lunar calendar and the sighting of the moon. Eastern (Greek) and Western (Roman) Easter use different calendars (Julian vs. Gregorian) and rarely occur on the same date. In addition to the holidays listed above, the demand for sheep and goats may increase prior to other ethnic observances. It is common for Muslims to consume sheep or goat meat to celebrate the birth of a new baby.

Tapping Ethnic/Religious Markets
There are many ways that sheep and goat producers can tap the ethnic/religious markets for their animals. Producers may direct market their sheep and goats to ethnic customers, take their animals to local or regional livestock auctions prior to holidays, sell to middlemen who supply the ethnic/religious trade(s), and/or work cooperatively with other producers to market live animals or carcasses to ethnic markets. Producers should choose a target market and produce and market lambs and goats in a manner that is consistent with the religion, beliefs, and customs of their customers, which may require changes in breeding, feeding, and management. The following tables contrast the different methods of marketing sheep and goats, with the ethnic consumer in mind.

MARKETING SHEEP & GOATS THROUGH A PUBLIC LIVESTOCK AUCTION
Advantages	Disadvantages
Convenient Regular sales (weekly, bi-weekly, etc.) Requires minimal effort Sell based on a "certified" weight Prompt payment Guaranteed payment **Method of price discovery**	Price is not known in advance No control over price - "price-taker" Wide fluctuations in price Must pay sales commission, yardage, and other fees (up to $5/head) Transportation costs Shrink (weight loss during transport) Goats may be sold on a per-head basis Stressful to livestock

The easiest way to market sheep and/or goats is to take them to a local or regional livestock auction. Producers can take advantage of the ethnic/religious demand for lamb and goat when they sell to livestock auction markets, if they produce the type of animal(s) that the ethnic buyers want and sell their livestock prior to the religious observances in which lamb and goat is commonly consumed. Many auction barns offer "special sales" of lambs and kids prior to Easter, Christmas, and the major Muslim holidays.

To maximize returns from public livestock auctions, a producer should develop a working relationship with the market manager. To start with, let him know when you are bringing a load of lambs or goats to market. Ask the market manager what kind of sheep or goats his buyers prefer and when the best time to sell is. You can also use public livestock auctions to make contact with livestock buyers and to negotiate direct sales to packers and other middlemen.

Producers should compare livestock auction markets and choose the markets that will return the most profit. Auction prices are listed in newspapers, farm periodicals, and on the Internet. When comparing the prices from livestock markets, it is important to compare "net" proceeds, rather than "gross" reported prices. The auction that brings the highest prices may not result in the most profit if the higher prices are negated by higher transportation costs, shrink, sales commissions, etc. The difference in prices between auction markets should reflect regional differences in transportation costs. Prices should be higher at the markets which are closest to the point of slaughter.

On-farm slaughter
It is illegal to slaughter a sheep or goat on the farm for the purpose of sale. Sheep and goat meat may only be sold if the animal has been processed in a USDA inspected slaughter plant. Some states have state meat inspection which allows the sale of state-inspected meat within the state. However, there is an exemption in federal laws which allows on-farm slaughter of livestock for personal consumption.

When selling livestock for slaughter, you need to sell a LIVE animal and let the buyer process the animal himself or facilitate the slaughter of the animal at a custom or USDA slaughterhouse. You must not help the buyer process the animal; however, you have an obligation to ensure that the animal is handled and killed in a humane manner (livestock should not be hung until they are insensible) and that offal is disposed of in an environmentally sound manner (e.g. composting).Cornell University has published a poster depicting humane on-farm slaughter. Producers should familiarize themselves with local, state, and federal laws before allowing on-farm slaughter of sheep and goats.

Before you sell livestock directly from your farm, you have to find customers and develop a client base. Some of the ways, you can develop an ethnic client base are:

• Word of Mouth
• Place a classified ad in a large metropolitan newspaper
• Post flyers at religious and social centers prior to a major holidays
• Send articles to magazines, newsletters, TV, and radio stations that represents specific ethnic groups.
• Advertise on college campuses that have large foreign populations.
• Leave your business card or brochure at a custom or USDA slaughterhouse.
• Hand out free samples of lamb at a farmer's market
  

MARKETING SHEEP & GOATS TO MIDDLEMEN (i.e. dealer, broker, order buyer, buying station)
Advantages	Disadvantages
Price known ahead of time No sales commission, yardage, or other fees No transportation costs if animals are picked up by buyer on-farm	Transportation costs if you must deliver animals to a pick-up point or buying station May have to pay a "pencil" shrink No grading or weighing (varies) Payment/credit risk

For various reasons, many producers do not want to market livestock directly from their farm. Nor do they like the uncertainty of taking livestock to an auction. Selling to "middlemen" may be the best option, if a fair price can be obtained relative to other marketing options. There are various middlemen that purchase sheep and goats: Dealers (or traders) buy and sell livestock to make a profit on price and weight differences. Brokers or order buyers buy livestock (for a fee) for feeders, live markets, and slaughter houses. Packers buy live animals, process them, and sell meat wholesale or retail. Retail markets sell to the end consumer.

To find middlemen . . .

• Ask buyers, dealers, and producers at local and regional auction markets.
• Contact your local Packers and Stockyards office to obtain a list of processors.
• Contact USDA or your state department of agriculture for a list of USDA-inspected and custom slaughter houses.
• Visit restaurants that serve lamb and/or goat.
• Visit stores that sell lambs and goats.
• Look at meat marketing listings in the Yellow Pages.
• Check directory listings on sheepgoatmarketing.org.

When selling livestock to middlemen, there are many things to consider. For example, will you sell a live animal or a carcass? Will the buyer pick up the animals from you farm or will you deliver them to a collection point? Who will pay for the cost of transportation, including shrink. Sometimes a "pencil" shrink will need to negotiated between buyer and seller. You will need to agree upon a method of payment. There is considerably more financial risk when selling to an individual buyer as compared to selling livestock through a bonded livestock auction or to a bonded livestock dealer. You need to protect yourself from payment forfeitures and bad checks. Bank transfers prior to the sale of any livestock is recommended. Good records should be kept on financial transactions.

MARKETING SHEEP & GOATS DIRECT TO A MEAT PROCESSOR
Advantages	Disadvantages
Price known in advance Less fluctuation in price Year-round pricing possible Can re-negotiate price periodically Sell carcass instead of live animal **value-based marketing** Less stressful to livestock	Must guarantee supply Must guarantee quality Prices may be higher elsewhere Hard for small producers, unless they form a marketing co-op or alliance

Many producers wish to sell sheep and goats directly to the packer because it streamlines the marketing chain and should result in higher prices (when averaged over the long run). When selling livestock directly to a packer, you need to negotiate a deal (or contract) that is beneficial for both parties. The packer wants a guaranteed supply at a consistent price, whereas the producer is looking for price stability and the opportunity to forward price his product. While small producers may be able to sell a few animals to custom slaughter houses or small butcher shops, most processors will want a regular supply of lambs and/or goats and this may require several producers to work together or form a marketing pool or cooperative.

MARKETING COOPERATIVES/ALLIANCES/ASSOCIATIONS
Advantages	Disadvantages
Gives small producers more clout Can share transportation costs Can organize special sales Can purchase inputs in bulk Democratic	Cooperative needs money to operate (e.g. membership fee, shares, sales commission) Need to have similar genetics and management to market cooperatively

Producers can have more clout in the market place if they organize marketing cooperatives or informal marketing groups. This is because unless a producer is very large, it usually takes many producers to supply a market on a regular basis. Marketing groups can be as simple as pooling animals together for sale to sharing transportation costs to legally organized cooperatives that market their own branded meat products. Numerous public grants are available to help producer groups organize cooperatives and market value-added products.

Mid-Atlantic Sheep and Goat Marketing Project

The Mid-Atlantic Sheep & Goat Marketing Project is a continuation of the Northeast Sheep & Goat Marketing (NESGM) Program, which was established at Cornell University in January 2001 to improve the marketing infrastructure for sheep and goat producers in the twelve northeastern states. The original program was funded by the Lamb Meat Adjustment Assistance Program, which resulted from legal actions taken by the American Sheep Industry Association to limit cheap lamb imports to the U.S.

Accomplishments of the NESGM Program include:

1)  Establishment of a sheep and goat marketing web site at www.sheepgoatmarketing.org.
2)  A small ruminant marketing list serv
3)  Identification of a knife for religious slaughter
4)  A restraining device for humane religious slaughter (see photo above)
5)  A poster depicting humane handling and on-farm slaughter - http://www.sheepgoatmarketing.org/sgm/news/HumaneSlaughter.pdf
6)  Pilot marketing projects and tele-auctions
7)  Holiday listings of sheep and goats for sale
8)  A database of participants
9)   An online directory of producers, feeders, dealers, order buyers, live markets, processors, retailers, and wholesalers
10)  A meat goat pricing resolution that recommended that goats be sold by weight by livestock auctions.
11)  A recommendation of grading standards for lambs and goats being sold to the ethnic markets.
12)  Regional marketing summits.
13)  Establishment of an advisory board.
14)  Associate membership in the American Sheep Industry Association

The Mid-Atlantic Sheep & Goat Marketing Project is funded by a Northeast SARE2 grant. Its purpose is to build upon the aforementioned accomplishments of the Northeast program and to extend the benefits further south into states such as Maryland, West Virginia, Virginia and North Carolina. The existing web site is being redesigned and expanded to included entries for other states. The new name and url will be sheepgoatmarketing.info.

Source: Northeast Sheep & Goat Marketing Program, www.sheepgoatmarketing.org

© Copyright 2005. Maryland Small Ruminant Page.

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Spreadsheets
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Resources
Sheepgoatmarketing.info
Northeast Sheep and Goat Marketing Program