October 27, 2011
by Allan Nation
MORRILTON, Arkansas: When you are direct marketing grassfed lamb for between $6.50 and $10 a pound how do you overcome the consumer’s initial “sticker shock” when reading such high prices?
Arkansas grazier, Ed Martsolf, who sells at the Little Rock farmers’ market said the answer is simple.
Stop selling it by the pound and start selling it by the ounce.
“Forty cents an ounce is not nearly as intimidating as $6.40 a pound,” he said.
Martsolf said most people can’t do the math in their head but to head them off he simply holds up a small Snickers candy bar.
“It’s roughly the same price per ounce as this candy bar,” he tells them and then quickly adds,“However, this grassfed lamb is high in omega-3 and CLA and is a lot better for you than this candy bar.”
This usually ends any price quibbling.
After 20 years of lamb marketing, Martsolf said he has learned a few things about consumer behavior. One of which is to put your product in a frame of price reference as he does with the candy bar.
Another is to have your sale portions small.
KEEP PORTIONS SMALL
“People don’t care what your product costs as long as the package price doesn’t exceed ten dollars. People come to a farmers’ market looking for something for that night’s meal. They don’t come looking to buy a freezer-full of meat.”
He wants every thing he sells to fit into his hand so he can have the candy bar in the other for the value comparison. This means all cuts are sold boneless.
“Selling boned out meat lowers the yield but just forget about that.”
He also keeps his meat cuts simple and realizes that most of them are going to be grilled rather than roasted.
He sells boneless loin, leg steak and chops. All meat is sold frozen.
“You want your meat cut so as to be as presentable as possible.”
All ground meat is sold as a “lamb filet.” A lamb filet is ground meat molded into a circle like a filet and surrounded with a strip of bacon.
“The best way to get rid of low value ground meat is to sell it as a high value something else,” he said.
Martsolf sizes the amount of meat he takes to the market to make sure he sells completely out.
“I want all the loin chops gone by nine. All the legs gone by eleven and all the front shoulder cuts gone by three.”
With his regular customers he encourages them to buy unfamiliar cuts with free samples.
“The Little Rock lamb market is just starting. This is a big medical center so there are a lot of health workers here. They are hearing the grassfed health story in the media and are responding to it.
“In our first month, we sold as much lamb as we had expected to sell the whole year.”
He said to keep in mind that your primary product is your farm and its story.
WHITE LAB COATS AND NOSTALGIA
“We are marketing a unique combination of white lab coats and nostalgia. We want to use the latest medical research but put it into the terms of Grandmother’s farm.”
He said his Arkansas farmers’ marketing person is Linda Jones who can put medical research in the local vernacular so that it is not intimidating.
This marketing of the farm first allows you to expand your market offerings under the same marketing umbrella.
For example, Martsolf not only sells his own lamb and farm-raised honey but also markets grassfed beef for a neighboring ranch at his booth.
He said an ill-advised foray into wholesale marketing through traditional grocery channels with the ranch’s honey production was a complete financial disaster. However, this taught him to respect the simplicity of the farmers’ market model as a marketing tool. Martsolf ranches atop Petit Jean Mountain near Morrilton, Arkansas. However, his primary farmers’ market is not in nearby Little Rock but in Pittsburgh, Pennsylvania.
Of the 700 ewes he personally owns, only 100 are grazed in Arkansas. The remainder are grazed on his old family farm in Pennsylvania. However, this is not his only geographic diversification.
A COOPERATIVE CRESCENT
Martsolf has also put together a group of cooperating ranchers that stretch from Oklahoma in a crescent across the Southeast and up to Pennsylvania for whom he also does both the meat and seedstock marketing. Currently, this totals about 1000 head a year.
This marketing arrangement came about as a result of his seedstock sales of the Katahdin breed of hair sheep. Martsolf’s niece, Carrie Scott, maintains the registry for the breed.
He said hair sheep do not have to be sheared or have their tails docked as the wooled breeds do and have a much milder flavor than the fine wooled breeds.
Katahdins are tolerant of both heat and cold and are non-seasonal breeders which makes them ideal for direct marketing.
Despite their apparent advantages, he spent ten years spinning his wheels trying to sell seedstock hair sheep.
MEAT SALES CREATE SEEDST0CK SALES
“Hair sheep were considered as something weird. People weren’t sure they could market the lambs.”
It wasn’t until he added the meat marketing that things really started to roll for him on the genetic side.
“Once I got interested in commercial meat marketing, it made the hair sheep real and the seedstock sales really took off.
“There are a lot of people who just don’t want to worry about the marketing. Working with me allows them to ease into ownership.”
Prior to adding the meat marketing, he said selling 20 ewes was a big sale. Now, cooperators have to buy at least 100 ewes and he prefers to work with people who want 350 to 450 ewes.
“I want to work with serious graziers,” he said.
His biggest recent customers are ranchers who diversified into goats several years ago and are now realizing that hair sheep can be raised in the same low-input way. The big difference is that a lamb brings three to five times as much as a meat goat kid.
He said a grassfed, direct marketed lamb can net up to $200 a head and that 300 ewes could provide a good living if direct marketed. In the east, this number of sheep can be run on between 50 and 100 acres depending upon soil conditions.
This should give grassfed beef producers pause.
TWICE THE PROFIT OF GRASSFED BEEF
With six ewes equaling one steer in grass consumption, Martsolf figures the sheep net twice as much per acre as the grassfed steer based upon a $600 a head net for the steer.
“The other big advantage with sheep is that it is a one year deal, whereas grassfed beef is a two year deal. You lamb in April and everything is gone by September.”
He said the annual overhead and maintenance per ewe runs about $45. The ewes are wintered on strip-grazed stockpiled fescue with no hay.
He said a grazier producing commodity lamb would need twice as many as a grazier willing to direct market. He considered 500 to 600 lambs a minimum size needed for a full-time wage if sold as commodities.
Martsolf said he enjoys doing what he describes as “genetic research and development,” which is what he concentrates on at the Arkansas ranch. He is currently working on developing parasite-resistant and higher meat yielding strains of hair sheep. He said many hair sheep were poorly muscled, flighty and of only medium productivity and needed heavy selection pressure.
“My genetic goal is a 100-pound lamb from a 100-day graze.”
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