The Alberta sheep industry is too small to be efficient, processing plants are operating below capacity and retailers don’t have enough lamb for consumers, said a report commissioned by the province’s sheep industry.
The good news is there’s clear potential for the industry, said the chair of the Alberta Sheep and Wool Commission.
“There’s lots of room to grow,” said Laurie Read of Silver Valley, Alta.
When the report was commissioned in 2005, sheep prices were at historically low levels and the industry was searching for clues to improve producer profits.
Read Also
USDA’s August corn yield estimates are bearish
The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
Since the report was released, sheep prices have jumped to some of the highest levels in years, bringing optimism back to the industry. At the same time, demand for lamb is larger than what the Canadian industry can provide.
“We’re supplying only half the lamb market in Canada. There’s your potential to grow,” said Read.
The report said lamb slaughter in Western Canadian needs to increase to 240,000 head per year, an 80 percent increase over the 2004 inspected slaughter.
Since 1981, Canada’s per capita lamb consumption has been steadily increasing from 0.69 kilograms per year to 1.11 kg in 2004, a 61 percent increase in 25 years.
Total lamb consumption has increased 107 percent to 35,000 tonnes from 17,000 during the same period.
While demand has increased, the Alberta flock has not grown, a situation that stumps producers.
In Alberta there are two distinct sales streams for sheep and lambs: sales to feedlots and the Sunterra Meats plant in Innisfail or direct to customers at farmers’ markets and farmgate sales.
Ray Price, president of Sunterra Meats, which owns the federally inspected lamb plant, said many producers are happy raising small flocks and selling their lamb direct to customers.
“People are reasonably comfortable with what they’ve got and it’s been an excellent niche business for a lot of producers. They’ve done well with the farmers’ markets and they enjoy that part. I don’t think there’s a big push by even those people to say ‘I want to do twice as much,’ ” said Price.
“They’re happy and they’re successful in what they’re doing.”
For Albertans to displace Australian and New Zealand lamb in the supermarkets, there has to be a steady, year round supply, said Price.
“In order to step up one more notch, we’re going to have to see some larger operations that are looking at it on a more year-round supply,” he said.
Sunterra’s plant slaughters lamb only two to three days a week. The rest of the time it kills hogs, cattle and bison. Until there is a steady, long-term supply, the company won’t increase its slaughter capacity.
“We’ve got a real good market niche for Canadian lamb in Canada, but in order to get to the next step of replacing offshore, we’ve got to get a more year-round business.”
Price said the company is building its own feedlot to help provide a more uniform supply of lambs to its processing plant, which supplies fresh lamb to supermarkets.
Along with a need for a more steady supply to replace offshore lamb, prices for Canadian lamb in the grocery store need to be comparable, said Read.
While many Canadians prefer and will buy Canadian lamb, few people are willing to pay twice as much as they would for the New Zealand equivalent.
“Canadian lamb is too expensive at the shop level. That’s the tough part of attracting and keeping people eating lamb,” said Read.
The report also looked at the possibility of creating a single desk selling agency for lambs, but there was no consensus that the market should move in that direction.
“From the study it seems that is not a direction people want to go,” said Read.
