By Malinda Geisler, content specialist, AgMRC, Iowa State University, malindag@iastate.edu.

Profile updated January 2011.
 

Overview
Several producers have turned to direct marketing their lamb enterprises by developing and expanding upon the niche to market directly to consumers, bypassing traditional marketing channels. Reasons for direct marketing include the opportunity to capture a greater share of the food dollar. The value farmers currently contribute to food expenditures accounts for just 19 percent of the total value.

Another reason for direct marketing is the growing consumer segment that desires information about the organizations that are raising the food and the methods they use. This trend relates to traceability. The ability to trace a product to the original source is a critical food safety issue.

A growing number of individual producers are reaching new consumers using the Internet. With widespread sales of home computers, an estimated 60 percent of the U.S. population has Internet access. More consumers are shopping over the Internet. According to the U.S. Census Bureau, total e-commerce sales during 2008 were estimated at $142 billion. An affordable method to market new products directly to consumers is for producers to establish their own Web sites.

Lamb products that are sold over the Internet must be processed in federally inspected plants. If the meat is processed in a state-inspected facility, it is only legal to sell the meat within that state.

Freezer market lambs are another direct marketing method. Lambs are sold live to customers. Arrangements are made with a custom slaughter facility for processing and packaging.

Direct marketing to consumers using farmers’ markets continues to grow in the United States. According to the USDA, there were more than 6,132 farmers’ markets in 2010, up from 3,700 in 2004. Farmers’ markets are beneficial to farm operations that have less than $250,000 in annual receipts. The markets provide an outlet to consumers interested in purchasing products directly from growers.


Sources
Farmers' Markets, Ag Marketing Service, USDA.

Food CPI, Prices and Expenditures, Briefing Room, Economic Research Service (ERS), USDA.

Food Marketing System in the United States, Briefing Room, ERS, USDA.

United States Department of Commerce

Profile prepared January 2003 and updated January 2011.