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The Invisible Hand

Remaking The Old American Sheep Industry

By Nathan Griffith


Big changes are remaking the U.S. sheep industry from top to bottom, changes that mean extra income and more security for those able to adapt.

The “Old” Sheep Industry

Towards the late 1800’s freight trains started to carry the new large mutton breed sires from the east-longwool sheep in those days-to the west. Those same trains carried the resulting mild-meat western lambs back to eager Eastern markets.

This grew to be a national sheep industry, a system in which eastern flocks carefully bred rams for large western ranches, which then cranked out bulk wool and meat.

By 1912, American lamb use had grown to an average of about eight pounds of sheep meat per capita. (Compare that to today’s paltry one pound per year.) From then to 1915, more U.S. sheep and lambs were consumed than U.S. cattle and calves.

Americans ate about five to seven pounds apiece for over 40 years. Even during the Great Depression (1930-39) American lamb consumption never fell to less than six pounds per year.

By the 1950’s a lot had changed. Breeds had changed; methods had changed; meat flavor had changed. The “old” sheep industry began to decline.

Despite rising incomes-and a rising influx of lamb-eating ethnic groups-American lamb consumption fell to less than four pounds per year, and kept falling.

About that time, petroleum-based fibers hit the market too. New “wash-and-wear” clothing ended shrinkage and moth damage.

Almost yearly thereafter, experts rejoiced that “lamb and wool is set to rebound,” or “the wool market has at last stabilized,” and “the sheep business has now turned the corner.”

Even today, folks trapped in the fading “old” sheep industry still look back with longing eyes, ever hopeful for that promised rebound.

Certain characteristics have come to define the dwindling “old” sheep industry:

It deals in bulk commodities of random flavor and texture.

It is heavily reliant on economies of scale (large volume/small margins) rather than targeted production for specific needs.

It craves public subsidy (“corporate welfare”) even today, when buyers are eager and prices are up.

The “New” Sheep Industry

The “new” sheep industry doesn’t try to get people to buy what it wants to grow; it looks to grow what the highest-paying buyers are already buying.

For example, for meat production, instead of getting stuck on mere carcass size and fat content, the “new” sheep industry is focusing on the all-important trait of flavor uniformity. They listen to consumers, who buy food based on known, reliable flavor.

This is why the “new” sheep industry has put breed-based selling back into service again.

Growers around the world are now marketing their sophisticated boutique lamb and mutton by breed-defined meat flavor and texture, instead of merely growing for obvious traits like lean or bigness (“plate coverage”). After all, they say, modern see-through packaging already lets buyers select by size and/or fat content. But categorizing their meat’s flavor by specifying breed and/or husbandry method tells customers what they really want to know before they buy: Is the meat strongly “gamy” (the flavor many love and insist on while others hate and avoid) or is it mild? Or, is it just subtly savory? Breed-specific labeling tells buyers this meat will taste as good as last time.

Flavor variability would have killed off the wine, honey and tobacco industries had they not sold their products by specified varietals and/or husbandry methods. When buyers can’t be sure of getting what they want in U.S. lamb they just quit buying it.

The flavor-defined product offerings are much appreciated by customers. Those who are doing it in Europe and Japan find their meats snapped up faster than they can grow them, even at ultra premium prices.

Closely defining goods for the buyer’s convenience is more profitable than trying to play the losing game of who can sell the biggest tonnage of meat or wool at the “best” (cheapest) prices. It’s hard to win at that game even if you can find super cheap grazing rights and sub-minimum wage foreign sheepherders.

Conversely, here are some traits that define the “new” sheep industry:

It categorizes meat by breed and production method to insure reliable and definable flavor intensity.

Its wool is carefully bred and grown for special high-paying buyers.

Its wide profit margins cushion market fluctuations and cut risk.

The Invisible Hand

In 1776, economist Adam Smith observed that (as he called it) an “invisible hand” guided the overall direction of markets.

He noted that every enterprise is motivated in some way by self interest, and that some earn more than the average for that business, and some less. If profits in some flocks rise considerably above the average, then they must pull the average upward with them. Therefore, the fortunes of individual flocks-regardless how small-help to decide the profitability of the industry as a whole.

Smith showed that those who make the best profits do more for an industry than those with smaller profits. He went so far as to claim that those with the widest profit margins did far more good for everyone concerned than those who merely plan and organize specifically for the greater good. (Adam Smith, Wealth of Nations, Book 4, Chapters 2 & 8. 1776)

In other words, Adam Smith’s “invisible hand” must be what is guiding the slow but steady reformation in today’s sheep business-where some have profits way above the norm.

How To Get In

The famous billionaire J. Paul Getty once advised that the key to success is “Find a need and fill it.”

The first step into the “new” sheep industry is to find who’s paying extra for a specific sheep product.

The second step is to produce that product.

The third step is to get the product to those buyers before someone else does.

You need a plan to get the product into eager buyers’ hands. Focus on why a certain type of customer buys their chosen product.

It is a good idea to fill out a “Product Marketing Information Sheet” for each item you produce for sale, identifying the top-payng current customer types, what their specific needs are, buying locations that they frequent, and how you plan to present the product to them.

Here are samples of how to target buyers who need specific kinds of sheep products:

Flock Marketing Information Sheet #1

Targeted audience: Experienced, high-priced wool crafters & hand spinners in the New York metropolitan area.

What they need: Something tangible and exclusive that justifies higher prices for their handicrafts (durability, beauty, comfort).

Where it could be sold: 1) Through my private buyers’ list. 2) At Reese’s Fleeces, downtown Bilgewater, New York. 3) At sheep & wool festival booth. 4) At Plunkett’s Historical Farm gift shop-along with spindles and instructional materials.

Secondary market outlets: 1) eBay 1-pound-at-a-time auction (gets new buyers); 2) Swap with Gino Cleano Merino Wool, in Bugtussle, Texas. (He sells my luster wool alongside his, I sell his superfine fiber alongside mine.)

Promo, publicity & ad strategy: Free ads in Pennysaver; monthly photo & article submissions to local newspaper; return card in each pack of gift-shop and craft store wool.

Proposed name: Silverglow Farm Fleeces

Proposed format: Raw fleece from my jacketed purebred English Leicester

Competitive retail price(s): $16/lb. (&plusmn8 lbs. skirted ; so approximately $128/fleece)

Brief description: Leicester: Very finely curled, radiant white, so shiny it glows, full-year, 10-inch length, soft handle, spins very smooth to touch

3 main selling points: 1) Very clean (can be spun straight from fleece); 2) Very uniform curl throughout (less work matching); 3) This wool is unavailable in industrial (cheap) wool products.

Unique or unusual traits: Stronger than ordinary wool, high luster, long staple, extra-durable for warps & high-wear products, organically fed, kindly treated, locally grown.

Notice that the emphasis is on what the highest-paying customers need, and not on what the grower wants them to buy.

Flock Marketing Information Sheet #2

Targeted audience: Orthodox Jewish families in Richmond, VA

What they need: Lamb to honor high holy days that isn’t gamy-kids like it and learn to enjoy religious life.

Where it could be sold: 1) Through my buyers’ co-op list. 2) Goldie’s Organics says they’ll arrange orders on freezer lambs for 10% of selling price + display frozen shoulder cuts for sale for 30%. 3) Local synagogue Hadassah societies.

Secondary market outlets: 1) Manny’s Deli – he says “chops & lamburger only, no freezer lambs .” 2) The Pits Natural BBQ wants legs only, for shish kabobs 3) Swap lambs with my friend Polly Paisley to supply richer flavored lambs for savory Jewish dishes.

Promo, publicity & ad strategy: Inquiry letters to local rabbis; free ads in The Trader to direct readers to my personal website; send spring and summer photo essays to Richmond & community papers.

Proposed name: Barbie Doe’s Mild Lamb & Mutton Farm

Proposed format: Whole & half lambs from my Barbados Blackbelly flock, maybe some restaurant & store cuts.

Competitive retail price(s): $11.00/lb. Kosher (approx. 80 lbs. live=40 lbs. hanging; 28 lbs. wrapped x $11=$308, less $50 Kosher butcher cost=$258, less $31 marketing cost=$227, or $2.84/lb. live weight)

Brief description: Barbados breed developed for extra mild flavor and small cuts perfect for holy day servings.

3 main selling points: 1) Reliably mild taste that even finicky children like to eat; 2) Small cuts so kids’ Passover servings need not be large and wasteful; 3) The only lamb of specified flavor available in Richmond stores.

Unique or unusual traits: Naturally raised, kindly treated, locally grown.

In both of the above cases, a breed was chosen that could be relied on to satisfy that market. But arrangements were made to also supply alternate products in order to gather additional clients not served by the current industry “pipelines.”

One further hint in getting started in the “new” sheep industry: Try growing something you or your family will consume with gusto. If you can’t stand to eat the meat you grow, it’ll be hard to keep up enthusiasm for it, even when eager customers come calling. If you just don’t know how your sheep’s meat compares to others, you’ll need to find out before you can step into the “new” high-profit sheep industry.

Wool that has those “itchy” hair-like fibers in it may keep you wearing cotton and plastic. If that’s what you grow, there are many other uses than clothing, which can sell your wool at surprising prices.

The “invisible hand” has swept away about 80% of the sheep of America in the last 50 years. With the New Year, let us resolve to refocus so it will instead guide us toward profit and success in the “new” sheep industry.

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