Recommendations to Strengthen the U.S. Lamb Industry

Recommendations to Strengthen the U.S. Lamb Industry

By AMY TRINIDAD

Sheep Industry News Editor

(Aug. 1, 2013) After conducting significant research for the Lamb Industry Assessment Study, the goal of the second meeting of the advisory group in June was to develop recommendations for the industry to implement to strengthen the American lamb industry and return it to profitability. The objective of this study is to stimulate collaborative industry action; therefore, the advisory group is now: (1) looking for industry input regarding their recommendations to encourage continuous industry improvement; and (2) creating specific action steps with deadlines for implementation of the preliminary recommendations that the advisory group is seriously considering. Final recommendations along with specific action steps to implement each recommendation will be adopted at the advisory group’s third meeting in late August.

“This process of identifying recommendations for an improved U.S. lamb industry has encouraged collaboration and cooperation across all sectors of the industry,” says Megan Wortman, American Lamb Board (ALB) executive director, whose organization has been tasked with this effort. “Our discussions have moved beyond just getting a consensus on some action items. We are improving communication across all sectors in the industry to help broadening each other’s understanding of the various challenges.”

The Lamb Industry Assessment Study was a derivative from the depressed lamb market of 2012. After a decade of year-after-year price gains in the lamb market, lamb prices were cut in half, there was a back log of slaughter lambs in addition to quality concerns. Therefore, the purpose of this study is to identify and analyze the major challenges facing the American lamb industry, to propose the most effective solutions to those challenges and to develop a strategy for the industry that will strengthen its short-term and long-term competitive advantage and return the industry to consistent profitability. 

Although a number of short-term recommendations for improvement were discussed at the second meeting of this advisory group comprised of representatives from all sectors of the industry, the general consensus is that there is no quick fix for the immediate situation.

“The situation we are in now wasn’t a quick market adjustment,” says Dan Lippert, ALB chair, “and I don’t think people can realistically expect that we have the power to immediately change the lamb market. However, members of this group do have influence on structural changes, which is what I believe the work of this group should be focused on.”

“We are trying to do more than just get through this depressed lamb market,” explains Wortman. “We have been through times like this before, but now we are actually identifying long-term solutions to address the issues that got us here and we are committed to implementing them.”

In his opening statements of the first meeting of the advisory group, Bob Ludwig, a consultant at The Hale Group which has considerable experience helping a wide variety of food industry entities with strategic planning, said that he would rather see three actionable recommendations that the group thinks are realistic and create a mechanism to execute them on a timeline than just producing another study for the industry. However, the five working groups – awareness and promotion; meat quality and consistency; seasonality management; productivity improvement; and information transparency and industry collaboration – developed a number of recommendations that were considered. The advisory group is now looking for feedback from the broader lamb industry prior to making final recommendations which will be issued at the conclusion of the project.

Awareness and Promotion Working Group
Mandate of this Group: How should the American lamb industry make non-lamb eaters aware of the great attributes of lamb and what should it do to promote higher lamb consumption among those who currently eat lamb?

The summary of committee recommendations were:

  1. Initiate an American lamb branding program that identifies the unique features and benefits of American lamb relative to the competition.
  2. Encourage ALB and all companies marketing American lamb to continue to place a high priority on the following:
  • conduct market research with consumers and the trade that supports the continual refinement of understanding of market needs;
  • develop industry “success story” case studies to support American lamb marketers;
  • create communication materials and tool kits that allow American lamb marketers to customize the message for the unique needs of their brand and customers without duplication of effort and resource expenditure; and
  • seek industry input on research, market communication and promotional tools beyond the companies represented on the ALB board.

Meat Quality and Consistency Working Group
Mandate of this Group: What changes should the American lamb industry make to ensure that all consumers get the quality of lamb they want with every eating experience?

The summary of committee recommendations were:

  1. Urge all lamb packers and the entire industry to initiate specific value-based pricing systems for the purchase of slaughter lambs on a carcass quality basis.
  2. Urge the lamb packers to install electronic grading equipment to provide greater consistency in grading results, and to have packers share the data from electronic grading with the appropriate parties.
  3. Support ALB’s efforts to initiate a comprehensive lamb quality audit of the entire industry – from consumers to seedstock producers – similar to that conducted by the U.S. beef industry.

Productivity Improvement Working Group
Mandate of this Group: What changes should the American lamb industry initiate to make continuous improvements in productivity at every link in the lamb value chain from breeders to food retailers?

The committee recommendations was:

  1. Develop a long-term plan for sheep-related research and producer education as public funds diminish.

Seasonality Management Working Group
Mandate of this Group: What changes should the American lamb industry make to better manage the challenges of the seasonality of production, the seasonality of consumption and the seasonality of slaughter and processing?

Although the group realized that no one action step will “smooth out” the seasonality of the U.S. lamb industry, the summary of committee recommendations were:

  1. Encourage greater use of different product formats – especially frozen products.
  2. Explore an electronic ordering system for lamb products reducing supermarket inventory requirements, gradually increasing lamb consumption throughout the year.
  3. Encourage more detailed planning of lamb slaughter numbers, week-by-week.
  4. Encourage longer-term alliances throughout the industry with stable pricing:
  • packers with supermarkets and restaurant chains;
  • feeders with packers; and
  • producers with feeders.

Information Transparency and Industry Collaboration Working Group
Mandate of this Group: How should the American lamb industry provide greater transparency of information throughout the industry and build greater trust and collaboration among all sectors of the industry?

The summary of committee recommendations were:

  1. Create a rapid response, industry-wide communications mechanism.
  2. Improve the quality of industry data and analysis:
  • the percentage of industry transactions reported;
  • the accuracy of the data; and
  • the reliability of industry analysis.

To view the complete presentation from the advisory group’s meeting in June, including the rationale and discussion points supporting the recommendations, visit  www.lambcheckoff.com . The group is soliciting feedback from a wide spectrum of the lamb industry and will incorporate the feedback into the more detailed final recommendations for approval. If you would like to provide comments, contact Wortman ( megan@americanlambboard.org ; 303-759-3001) at ALB as soon as possible as the final meeting of the industry advisory group is scheduled for the end of August.

To read the article covering the advisory group’s initial meeting, see “Developing a Roadmap for a Sustainable Industry” in the May issue of Sheep Industry News at  www.sheepindustrynews.org .

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