Education

Report on the First Choice Lamb Pool, Astoria, NY

Report on the First Choice Lamb Pool, Astoria, NY
Presented at the NESGMP Advisory Board Meeting October 21, 2003
Reported by Bruce Vermeulen, Lamb Producer coordinating the First Choice Lamb Pool
Bruce provided a handout that is included as Appendix 1.

Note – although this lamb pool is no longer in existence, this review of its first years may be useful to other farmers interested in setting up a lamb pool.

The pool was started last January and sells to a butcher shop with a particular need for a fat lamb for a Greek restaurant serving lamb roasted on a spit. The pool provides at least 10 lambs per week. The market would like to obtain all 40 of the lambs it needs weekly for this purpose from the pool. Eventually the pool might be able to cover this request. Five farmers regularly provide the lambs. Other farmers have supplied lambs when needed. Prior to his death in the summer of 2002, Bob Melchior operated a feeder operation and as such was able to fill orders on occasion. Bruce noted that they could use another feeder person like him. Bruce is one of the producers and also serves as the marketing coordinator. He volunteers his time which when things are going well only requires about three hours per week. His role is primarily to contact the other producers to plan the scheduling of animals.

The lambs are delivered to a slaughter plant with a current business of transporting carcasses into NYC. The farmers get a year-round price. It works well, although some of the farmers they have approached to join the pool felt that the stable price was too low. For example, Victor Decker and a Pennsylvania lamb association were approached but believed they could do better marketing at New Holland. It was pointed out that it is hard for some farmers to accept the security of a year round price. Many producers who are not on accelerated lambing schedules try to just lamb for the peak demand times of the year. The five main producers in this pool operate on accelerated lambing systems.

Scheduling issues are sometimes difficult for the pool. Same farmers already have commitments for higher priced hothouse lambs and on-farm direct sales such as for halal customers. They can often receive $80 for these lighter-weight lambs. That is one reason the pool started marketing only 10 lambs per week. There have been some problems with arranging for slaughter because the pool needs to use slaughterhouses that have their own transportation for carcasses to NYC weekly. This means that these slaughterhouses usually have their own retail and wholesale accounts in NYC and may view the pool as a competitor whose market they would like to have for themselves. The pool would probably have to market at least 30 lambs weekly before it could pay for separate transportation to NYC. More lambs also would be needed to pay for the pool coordinator time.

Quality consistency was a big concern initially but this small pool has been able to provide a more consistent product than the larger dealers that provide the remainder of the animals. Producers travel 40 minutes to 1 1/2 hours to get to the slaughterhouse. The per carcass slaughter and delivery charge to NYC is $16. Payment is within a couple of weeks. The producers pay the slaughterer and delivery costs up front at the time of delivery to the slaughterhouse. The slaughterhouse provides a receipt to the buyer upon delivery. The buyer sends a check to the pool marketing coordinator made out to the coordinator. The coordinator pays the other farmers.

One of the Board members also sells direct to meat shops in NYC. He stated that the pool was getting about $1 less per pound than he was receiving and that that might be why the lambs provided by the pool pleased the buyer. However, it was pointed out that the labeled price for lamb at this meat shop is not high.

Appendix 1. Summary of the First Choice Marketing Pool Operation by Bruce Vermeulen.

Concept
Connect a group of farmers to a specific buyer for regular sale of lambs.
Began: 5 January 2002

Producers
5 regular producer farmers
1 feeder/dealer
3 seasonal producers

Purchaser
Greek butcher in Queens NY.
Ultimate purchaser is Greek restaurant with specific requirements.

Organization
Farmers are bound only by their desire for a sustained regular market for their quality lambs. Most sell to other markets in addition to the Pool. The size of farms range between 60 and 500 ewes. Most are an accelerated lambing system.

A market coordinator schedules deliveries by farmers to slaughterhouse, receives and distributes payments and deals with all parties for negotiation and problems.

Program
The demand is for a fat (internal and external) lamb carcass of 35 to 40 pounds. These lambs are roasted on a spit at the front of the restaurant. The restaurant uses roughly 40 pieces each week year round.

The butcher supplies all these lambs to the restaurant in addition to other sizes of lamb, which are obtained through various markets and dealers.

The First Choice Pool is committed to providing 10 carcasses per week and the butcher is willing to take more when they are available. The owner has indicated that if he could get all 40 from the Pool he would.

The live lambs are delivered by the producer to a Halal slaughterhouse where they are killed and skinned with head on. The slaughterhouse then delivers the carcasses to the butcher after hanging for 1 or 2 days.

Pricing
Slaughter and delivery is $16 per head, which is paid directly by the producer to the slaughterhouse. Price of $2.50 per pound is a set, year round price. Price received by Pool is $2.50 per pound on hanging weight (which ranges from 48% to 52%). This equates to roughly $93.75 for a 75 pound lamb or $77.75 net ($1.04 /lb) live.

Shipments
There have been 10 different shippers since the onset.
During the 41 weeks of sales 560 lambs were shipped.
Sales totaled $51,000 or $91.25 per head.

Outlook
The buyer needs quality, fat, grain-fed lambs year round. These can be difficult to find at some times of the year. The producers like having a reliable place to market their product at a known price. Currently the price received is roughly $15.00 more per head than can be had at auction.

Year round, the price for these lambs range from $0.60 to $1.50 at auction depending on supply. Producers often receive more for their lambs through other niche markets (hothouse or on-farm sales) so the Pool is not most farmers' first market.

The difficulty is meeting the demand. Despite a large number of ewes being represented, meeting the year round demand is difficult. If more committed producers can be included, the program will continue and can grow substantially. Not only will this butcher take more lambs, but in Queens, NY alone, there are dozens of shops like this one who welcome the chance to deal more directly with producers.

Please note:  This lamb pool is no longer in operation but information on how it was initially set up may be useful to other producers