Gary Alexander delivered a message at the Alberta Lamb Producers annual meeting that many didn’t want to hear.
“I will tell you right now that the sheep business, in my opinion, is a dysfunctional and declining business and I’m not saying that solely about the Canadian business,” said Alexander, president and CEO of the North American Lamb Company.
A Canadian who worked in lamb finishing and processing in New Zealand for 25 years, Alexander said it was the state of the lamb industry in New Zealand that prompted his return to Canada. North American Lamb Company is a partnership of SunGold Specialty Meats (which has the country’s largest federally inspected lamb-processing plant in Innisfail and the Canada Gold Lamb feedlot in Iron Springs) and Canada Sheep and Lamb Farms in Manitoba.
Alexander said that the problems in the sheep industry in both New Zealand and Canada mean that there is huge opportunity for sheep producers.
“I’ll tell you what the biggest problem in our industry is on both sides of the hemisphere. The biggest problem is consistent livestock supply,” he said.
In New Zealand, about 20 million lambs are processed each year, and the supply still isn’t consistent.
“If it is dry, we will get those lambs real early and real light,” said Alexander. “If it gets wet, we’ll get them real heavy. There’s no consistency.
“The consumers are not being served what they should be served. That’s in New Zealand where we have 20 million lambs. You have the same problem here, if not worse.”
It’s not just the lack of a consistent supply in Canada but also a lack of lambs meeting the specification that processors need, he said.
“There are some lambs here that I’ve seen that (in New Zealand) we would turn around and send them right back,” he said. “We wouldn’t even touch them. I’ve seen lambs that have more mud than meat on them. We can’t continue on like that.”
Canadians consume about 35,000 tonnes of lamb annually, but only 13 per cent of that is domestic lamb processed in federally inspected plants (and therefore able to be sold in other provinces or exported to the U.S. or overseas). Imports, virtually all from New Zealand and Australia, account for 65 per cent of the market.
“So there’s a lot of value on the table,” said Alexander. “But very little of your product is portable.
“What we need to think about as a group is lamb as a global supply business. That’s the only way you’re going to extract value.”
There is an opening for Canada to become a major global supplier of lamb, he added
“In New Zealand, over the last nine or 10 years, we’ve lost nine million head of breeding ewes. We had 17 million breeding ewes,” he said. “That’s the sheep mecca of the world.”
But the Canadian lamb sector could also see the sort of decline, he said.
“I would suggest your industry might be on the same trajectory,” said Alexander. “So you need to think really hard and really long about where this industry can go in the future. Because we see really huge opportunities. We’ve made a huge investment in the business and we’re going to move forward with what you’ve just left on the table for us.”
His company’s plan is to build a lamb value chain, founded on what the market wants.
“If you’re not market led, forget it,” he said. “Right now, we don’t provide the market much. We’re lucky we even have markets, the way we change things around. We don’t have enough product to satisfy their needs.”
The sheep industry needs to provide consistent lamb products year round. Right now, people are supplying different breeds of lamb, and slaughtering at different ages. That should change and there should be more of a focus on genetics.
“We need a maternal animal that will breed year round and provide us with three market lambs per ewe per year,” said Alexander.
The North American Lamb Company has two breeding units and one growing unit in Manitoba. Lambs are weaned at eight weeks, go into the growing unit for six weeks, and are then finished at the Canada Gold feedlot in Iron Springs. Once they reach 56 kilograms, they are processed at SunGold Specialty Meats in Innisfail.
“A key to this thing is that we get those lambs processed at less than 200 days of age, year round. We do the same specification, year round.”
In total, Alexander hopes to grow barns of 30,000 breeding ewes in Manitoba, as well as a barn of 20,000 ewes in Alberta.
“They’re always the same age when we slaughter. They have always been fed the same, and they’re always the same breeds. It’s all about generating more value.”
Alexander told the producers in the audience that he is interested in talking to people who want to raise and sell lambs for finishing, but added they must be able to provide what his company wants.
“The opportunities for people to be involved with this are many,” he said. “But I’ll be frank with you — they have to be commercial. They can’t be a handshake arrangement where you go do what you want to do and we’ll make something out of this.”