The U.S. sheep industry is in the midst of a long-term decline.
The reasons are many: reduced wool demand, low lamb meat prices,
losses to predators, and labor shortage. Despite these concerns,
demand for lamb meat has remained steady, and imports have increased
to meet U.S. consumer needs. The trend of declining domestic supply
and increasing imports could be reversed if the industry pursued
a different business model. The experience of Australia and New
Zealand shows that aggressive marketing and diversification of
demand offer hope for the industry’s recovery.
Survey data indicate a lack of a broad consumer base, and little
success has been achieved in promoting and differentiating U.S.
lamb from other meats. The U.S. sheep industry focuses on high-valued
cuts for the domestic market, concentrated mainly in the Northeast
and Western States because of their large immigrant populations.
It has neither capitalized on market segmentation nor developed
export markets. Most low-valued meat is rendered or made into pet
food. What little is exported goes mainly to Mexico in the form
of whole mutton carcasses. In contrast, beef, pork, and poultry
markets are geographically dispersed with organized export markets.
In addition, they have consumers of all ages and backgrounds who
buy a wider variety of cuts.
Australia and New Zealand offer a model for industry success.
Lamb marketers in those countries have waged very aggressive ad
campaigns aimed at clearly distinguishing their product from, and
defining it as superior to, those of its competitors. Their ads,
appealing to customers outside their borders, tout the fresh, wholesome,
free-range, grass-fed image. Imports from Australia and New Zealand
now make up more than 40 percent of U.S. lamb and mutton consumption.
Australia and New Zealand lamb and mutton exports have grown
and diversified. Both countries export to a wide range of markets,
including traditional markets in the European Union, the Middle
East, and Papua New Guinea and newer markets in the United States,
Southeast Asia, and Africa. With these diverse markets, a clear
delineation among three market segments has emerged. High-priced
prime lamb products sell in the developed economies, lower valued
lamb products sell in developing economies, and low-priced mutton
sells in both developed and developing economies for institutional
catering and for further processing.
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