Strategies for optimizing the bottom line
Currently, small ruminants are raking in record prices. The price trend for sheep and goats in this country has been on a steady climb for decades. Year after year, without fail the price for lambs and kids increases. “With both sheep meat and goat meat we actually import more than we produce in this country,” Jennifer Lutes, agricultural business field specialist with the University of Missouri Extension, explained. “So, we have demand here that is unfilled by domestic production.”
Hence, a continual upward trend in prices. However, in order to get the absolute best price possible, there are management and marketing strategies producers can implement. The first step requires an understanding of the industry’s seasonal markets.
The sheep and goat industries have clearly defined seasonal markets. Research indicates consistent, predictable times of the year when demand for product is high. In most cases, the time when demand is high, the supply is low. The reverse is also true, when supply is high, demand is low.
This discrepancy is related to several factors. First, most sheep and goats are born during January through May. This makes the lambs or kids ready to market in the summer or early fall months.
However, most of the holidays in which people want to eat goat meat or sheep meat occur in the winter months or early spring months. “So, we have higher supply when we have lower demand and we have higher demand when we have a lower meat supply and that happens every year,” Lutes said.
Secondly, most lambs and kids are born later in the winter and in early spring because ewes and does go through a period of anestrus in the summertime. Ewes and does are considered short-day breeders, meaning they cycle during days with fewer hours of sunlight and cooler temperatures. The long, hot days of summer sends ewes and does into a temporary state of anestrus – a time when ewes and does do not ovulate.
Market Highs and Lows
Years of research and data collection provide an indicator of the best time for most producers to sell their animals. Seasonal price highs occur in late fall to mid-spring and seasonal price lows happen beginning in early summer and through late fall. “We can have as much as a 25 percent price swing between market highs and market lows for the year,” Lutes added.
Therefore, preparing to sell animals when the market reaches its peak, ensures producers will maximize profits. According to years of market data, the above average annual high price for goats occurs in April and the average annual low price happens in September. As for sheep, the market high was in December and low in August. The higher prices typically are tied to demand and holiday celebrations. “A lot of that revolves around the Easter market and when Easter falls, especially the marketing month before Easter, it is often the strongest demand point in the year,” Lutes explained.
Preparing to Hit the Market Highs
In order to sell animals when the market peaks, the animals must be ready at the right time. This requires making sure does and ewes are bred to kid and lamb at the end of December or beginning of January. In these cases, the animals can be marketed when prices are in the above average window for the year.
Due to ewes and does going through a period of anestrus in the summertime, it is difficult to get them to lamb or kid much sooner than late December. Another option for producers is to wait for kidding and lambing until April or May, then keep the kids and lambs to sell in January or February.
Doubling and Tripling Money
Lutes recommends producers keep records to help them evaluate which animals are their top producers. One way to increase profits is to retain the does and ewes that are producing twins and triplets.
Sheep and goats are capable of having and raising twins and triplets. One management strategy is to cull the does and ewes that are consistently producing single offspring. The does and ewes that raise twins and triplets are performing extra work that could have taken a whole other doe or ewe to do. Keeping the high performing animals will increase profits.