‘Significant opportunities’: Why copying the beef industry could pay off for lamb

Lamb selling at $100/kilogram is possible if the industry wants to mimic what has happened with beef.

The lamb industry should follow the path of beef in terms of promoting brands and even breeds if it wants to maxmise returns.

And throwing off the tag as a commodity is vital to ensuring the meat, which is seen as a niche protein overseas, maintains or grows market share.

Lambpro principal Tom Bull from Holbrook, NSW, was one of the speakers on aSheep Roundtable run by The Weekly Times recently and said that lamb had always lacked segementation.

He said in the past 20 years, the beef industry had transformed.

“We actually have segmentation it the beef market being Wagyu, Angus and a number of branded products,” Mr Bull said.

“Where we see lamb – and the current model that all lamb is lamb – is that it is a commodity.”

“I think there are significant opportunities there and from what we have seen in the past couple of weeks (with the threat of foot and mouth disease) for farmers to position themselves in the global market by producing something that is better than average.”

Gundagai Meat Processors chief executive Will Barton said lamb could be a specialised expensive product but was treated like a commodity.

“It is a specialised product that has been bid into markets globally to a point that it is quite expensive globally for the prime cuts,” Mr Barton said.

“Those prime cuts are being sold at prices that are not commodity prices but as a commodity so when economies slow globally, people retreat back to other commodities.

“The brands and the segmentation that is being created by businesses like ours and like Tom’s (Lambpro) will shelter those segments of lamb from the volatility of commodity markets.”

Mr Barton said the industry needed to improve.

“We just need to be better at making sure we are selling lamb appropriately and managing it well to ensure we can continue to be a super profitable opportunity for a mixed farmer.”

Mr Barton said prime lamb cuts were typically sold in high income locations globally.

“The only thing stopping us selling every cutlet at $100/kg is proving it is worth it – will it eat the way it should?” he said.

“No one has problems buyuing an expensive product like oysters or caviar as long as it eats well and provided we can prove it will eat better, people will continue to pay high value for lamb.”

Lamb being sold into a market for special occasions can achieve stellar results.

“Do I think $100/kg lamb prices can be mainstream?” Mr Bull said.

“No, but I always say that when I am in Sydney, within a 2km radius, there are 25 beef products selling for $100 if not $200 a kilogram, and all of a sudden, if lamb sells for $100, everyone is questioning that.

“I think lamb has to have a similar progression to beef – niche products into high end markets within demographics that don’t care what they have to pay which gives an opportunity to extract more value.”