Contemporary Producer-Owned Lamb Processing Ventures: Lessons Learned

The U.S. sheep and goat industry is in transition. Its producers have been forced to adjust to a more market-oriented environment with less Government income support, more international competition, and increased market concentration beyond the producer level. In trying to realize higher returns for the lamb production enterprise in the early 1990s many lamb producers became involved in group projects that had value-added processing and marketing through vertical integration as the primary way to capture more of the consumers’ food dollar. Most were unsuccessful. Spokespersons for the U.S. sheep and goat industry, while not being critical of the unsuccessful ventures, believed that lessons learned from these business failures could greatly benefit future vertical coordination efforts in the lamb processing and marketing arena. A case study approach was used to evaluate two producer-owned ventures--American Lamb Producers, Inc. and Virginia Lamb Cooperative. Findings from these case studies have relevance in determining the potential for future producer-owned ventures into value-added lamb processing and marketing in an industry characterized by significant concentration among a few established marketing firms.