Lamb feeding

• Farm flocks
• Feedlots

• Western New York
• Western states
• Packer feeding

Lamb slaughtering

• Major packing plants in Colorado, Texas, and the west coast
• The only two packing plants on the west coast (Ca and Wa) are owned by Superior Pack and the USDA statistical service will not report slaughter numbers for Ca and Wa to avoid disclosing individual plant operations.
• Many smaller plants are scattered throughout the United States. This is particularly true in the Northeast.
• Major Eastern slaughter plants are in New Jersey.

Packer concentration

• ConAgra
• Superior Pack
• Economies of scale may mean smaller packers have difficult economics

Lamb distribution

• Packers: slaughter lambs
• Breakers: purchase carcasses and primal cuts and sell further processed cuts
• Wholesalers: general food distribution firms where lamb is a small part of business
• Supermarkets
• Food service firms

Lamb consumption

• 30% of consumers have not eaten lamb
• 24% eat lamb once per year (mainly in northeast and western U.S.)
• Ethnic - Muslim (halal) and Jewish (kosher) - markets are very important

Prices

• Break-even prices for 1) feeder lambs or 2) slaughter lambs or 3) cost of gain

  Example 1: If the slaughter lamb price for 100 lb lambs is expected to be $1.40/lb and the cost of gain is $0.70 per pound, what is the break-even feeder lamb price for 40 lb lambs:

  • Income: 100 lb x $1.40/lb = $140
  • Gain expense: 60 lb gain x $0.70/lb gain = $42.00
  • Gross income: $140 - $42 = $98
  • Break even feeder lamb price per pound: $98/40 lb = $2.45/lb

  Example 2: If the feeder lamb price for 40 lb lambs is expected to be $2.454/lb and the cost of gain is $0.70 per pound, what is the break-even slaughter lamb price for 100 lb lambs:

  • Lamb expense: 40 lb x $2.20/lb = $98
  • Gain expense: 60 lb gain x $0.70/lb gain = $42
  • Total expenses: $24.50 + $17.50 = $140
  • Break even slaughter lamb price per pound: $140/100 lb = $1.40/lb

  Example 3: If the slaughter lamb price for 100 lb lambs is expected to be $1.40/lb and the feeder lamb price is $2.45 per pound, what is the break-even cost of gain:

  • Income: 100 lb x $1.40/lb = $140
  • Expense: 40 lb lamb x $2.45/lb gain = $98
  • Gross income: $140 - $98 = $42
  • Break even price per pound of gain: $42/60 lb = $0.70/lb

• Seasonality of feeder lamb prices:

• Seasonality of slaughter lamb prices:

• Seasonality of wool prices: