Saturday, January 23, 2016

Lamb Prices

I wrote a really detailed post last summer regarding egg prices and how much (or very very little) profit we make on eggs. People sometimes question our prices, so I like to be able to justify it. We did  a lot of research on our lamb prices when we first got  started. We haven't raised them. Ever. Hay has gotten more expensive, but we've gotten better at sourcing it. And again, our pricing models don't even take into account our time and labor, any electricity used (to heat their water), the water they drink, and any expenses related to the truck and trailers we use to take them to processing, and to bring home their winter hay.  So, yeah, not really profitable at all when you put all that together. However, our farm is breaking even at this point, so it is paying for itself.

But I reposted my Craigslist ads last night, as they expired over the holidays and I almost immediately got this anonymous email last night. So I am calling this person on the carpet....

They took the time to create a fake email just to tell me this. Wow! $2.50, you got a heckuva deal. Didn't tell me what you bought, if it was on sale, or if it had any of the same qualities as my pastured, humanely raised lambs.

So let's break it down and see how outrageous my prices are, compared to lambs that were probably raised on a CAFO and bought at the auction to be sold at Atlas. (not picking on Atlas, we don't use them, but have friends that do, and so far, they seem to do a great job, just not sure where their retail lamb is coming from)

Alright, so the costs that are obvious for me to identify, and keep in mind, raising lambs also means keeping their moms and bringing in breeding rams.

So here are the costs we have:

$3000/year for hay for the winter. Pasture grasses don't grow year round in Colorado, so we source local hay to feed the lambs and their mamas.
$300/year for a breeding ram
$300/year for needed vaccines for the flock
$75/lamb for processing

OK, again, this does not consider the maintenance and gas on our truck that we use for getting hay and taking them to the processor. It doesn't consider water, or electricity (running commercial freezers isn't free, either!), or our time for taking care of them and their barn (that means I don't get paid to shovel poo!)

So here's about what we get per year for lambs...

We have about 35 born each year, in a strong year, they weigh on average 70 pounds at time of processing. We get back about 35 pounds of meat from each lamb.

Taking the prices above, our costs are about $85.71 per lamb for hay, $8.57 per lamb for vaccines, $8.57/lamb for the cost of the breeding ram, and then the $75 for processing.

That equates to about $102 profit per lamb.

OK, there are some other  things to note here, we sell a lot of lamb to our CSA members, at $7.50/lb. I was using the $8/pound price for the analysis above. ALSO, my price per pound is the price of the WEIGHT OF THE MEAT YOU TAKE HOME. A lot of folks charge by the pound for hanging weight or live weight. That is not the same as what you take home.

But if I were to drop my prices down to $2.50/lb for butchered weight... I'd lose $90 on every lamb. That doesn't sound sustainable.  And if $102 profit upsets you, multiply that by the 35 lambs I raise per year, that's a net profit of $3575. Again, not being paid for my time, electricity, water, diesel, etc. That pretty much could pay the property taxes of the pasture they eat 6-8 months out of the year. Thanks, sheepies!!

And then there are the cut prices. Yeah, not only do we sell most of our lamb bulk, we really really encourage folks to buy enough to stay in the $8/lb range. But if someone really only wants one cut, we have prices for those, and yeah, they are higher. This is driven purely by supply and demand. The higher demand cuts get the higher prices... this is to help drive consumer behavior to try and purchase all the cuts of lamb, and not purchase all the prime cuts, leaving the lesser meats behind. That helps ensure we always have a good selection of meat for all our customers and especially our CSA customers who get ALL cuts at $7.50/lb.

For us, it's imperative that we make a little profit on each endeavor so that the farm can keep going. Again, I don't know the source of Atlas' lamb products, but I do know mine... pasture raised, grass fed, babies that live their whole lives with their mama, never exposed to chemical sprays or antibiotics, and live a happy, healthy life, outside in the sunshine, and even so spoiled they get a full barn to sleep in when the weather is cold.

I guess, as is with anything, you can't please everyone. And I don't intend to. When I research prices for other pastured lamb, such as at Whole Foods, and other pastured lamb enterprises around the US like ours, our prices have always been lower. This individual doesn't need to ever buy my lamb, I sell it all just fine to folks who appreciate what we do and why we do it. This individual also didn't really need to take all the energy to send a negative note to us, either. We know where our prices stand, and we know the quality of our product. Sometimes you get what you pay for.

OK, so after that, here's a picture of a cute lamb to put a smile on your face....