Free grazing lambs sold direct liberate Minnesota couple from the commodity rollercoaster

by Allan Nation

MORTON, Minnesota: Doug Rathke walked along the front row of attenders at a Minnesota grazing conference and waved two crisp new $100 dollar bills under our noses.

"How would you like two of these in profit for every direct marketed home-raised lamb?" he asked.

"Or how about one of these in profit for every lamb you buy from your neighbor? Well, that's what we are here to talk to you about today."

Needless to say it was a good way to get our attention.

Doug Rathke and his wife Connie Karstens own the Liberty Lamb and Livestock Company in Hutchinson, Minnesota.

"At Liberty Lamb our lambs are free to graze," Connie said. "They are also free of hormones and antibiotics. We're really into freedom including our own."

Doug and Connie direct market between 800 and 1000 grassfed lambs plus grassfed beef and pastured chickens and eggs off 80 grazed acres. Another 50 acres is leased to a neighbor for summer crop production but the residues are grazed in the winter.

They began their partnership in 1986 when they married. Doug is a professional sheep shearer and Connie had always had a passion for sheep. However, Connie said that passion alone doesn't pay the bills. They quickly realized that for them to make real money from a small acreage, they were going to need a wider margin that what commodity lamb offered.

"We saw that to increase our profits we had to do two things," she said.

"We had to lower our input costs or we had to get a higher price for the product produced. We decided to do both."

They first put in a management intensive grazing (MiG) pasture system which tremendously lowered their input costs. This allowed them to graze their sheep for nine months of the year - April through December - and cut their hay feeding to only three months.

For those three months, the sheep eat their way through the hay stack with movable head gates. The British call this technique "horizontal grazing" so I guess you could say that Doug and Connie's sheep graze year-round. Next they added perennial ryegrass and brassicas to their pasture mix.

GETTING OUT OF THE COMMODITY BUSINESS

In 1988, Doug and Connie decided they had enough of the commodity business and decided to take control of their prices and lives by direct marketing.

To facilitate year-round direct marketing they decided to use Dorsets, which can lamb year-round.

"The Dorset breed suits our needs because they supply a steady year-round supply of fresh lamb for our marketing options," Doug said.

They lamb in February, May and October.

Because of their strict genetic selection, Doug said seedstock sales have become a part of their product mix.

Connie said in starting their direct marketing they followed the recommended route of producing it for themselves, then for their friends and then for their friends' friends.

"There's not a business in the world that doesn't get most of its customers by word of mouth. Direct marketing all starts with your creating a product that is something special."

Doug and Connie admit that starting a direct marketing program is not easy and is very time-consuming but theirs quickly got them off the commodity market roller-coaster.

"With a little creativity, some extra hours and consumer savvy, we said good-bye to the middle man and today we direct market everything we raise," Connie said.

"And because our markets have expanded so heavily, we also purchase additional sheep from producers within the state that meet our quality standards."

She described the shift to grassfed meats and dairy products as a "tidal wave" that was building out in the ocean. She said direct marketing would be much easier for current graziers than it was for them thanks to Jo Robinson's new book Pasture Perfect.

Connie said they have not sold any sheep through the commodity market for 12 years. In addition to the lambs they produce and sell grassfed Jersey beef, chickens and eggs.

Their marketing program consists of a combination of on-farm, restaurant and event sales.

RESTAURANT SALES

Every week they sell six to eight lambs to an ethic restaurant in the Minneapolis/St Paul area. They deliver the lambs in a USDA approved refrigerated trailer. The carcasses are halved down the backbone and cut up by the chef.

"The chef is very particular and has come to rely on us for a top quality supply all year. By dealing direct with our product, they have come to know exactly what we produce," Connie said.

Connie said they planned to expand their restaurant sales but warned newcomers that restaurants are notoriously short-lived. She said she liked ethnic restaurants because they knew how to use the whole carcass, whereas, American restaurants only wanted certain cuts.

STATE FAIR BOOTH

Starting in 1991, Doug and Connie have operated a booth at the Minnesota State Fair. Connie said this 12 day event with 1.5 million attenders produces a large portion of their annual income and is a very intense experience. They have to hire outside employees to work in the booth as the 12 hour days for 12 days are just too tiring for strictly family labor.

"Our most popular item is the lamb gyro. Other items on the menu are lamb burgers, leg of lamb, and lamb wrappers," she said.

The booth gives the farm a lot of good publicity and helps to generate sales throughout the year.

ON-FARM LIVE SALES

Doug said they sell about 100 live lambs a year to ethnic communities based on cultural and religious beliefs. This business evolved strictly from word of mouth and is hassle-free and requires no licenses.

Another live animal niche is the sale of animals for research purposes. Doug described the research niche as "demanding but very lucrative."

USDA FACILITY AND RETAIL OUTLET

The centerpiece of their marketing program is an on-farm USDA inspected processing facility. This is in a portion of their home and was the first in-home facility the USDA had ever been asked to approve.

The lambs are slaughtered at a near-by USDA plant for $15 a head. Because this facility was so near, Doug and Connie decided to only add a carcass processing facility.

"Our meat is packed by us to insure our precise standards of cutting, trimming and presentation and to be the finest meat in freshness and taste. Excess fat is not tolerated," Connie said.

Connie said an important part of their marketing success was her taking a British Meat and Livestock Commission course in lamb butchering. She also went to a lamb butcher school sponsored by the American Sheep Industry.

"We learned where certain glands were and how to remove them to prevent strong off flavors. The average butcher in America has not had enough training to know how to cut up a lamb carcass correctly," she said.

She said that lamb butchering was not particularly difficult to learn and was primarily a game of "practice makes perfect."

However, the skills required to cut up a lamb and a steer are entirely different. Since beef butchering skills are more commonly known, they have decided to leave the beef butchering to others and to concentrate on lamb. They cut meat every two weeks. They have to notify the USDA on what day they are cutting meat. The inspector is provided free of charge by the USDA.

THE LAMB SHOPPE

In a free-standing small building, they added a retail meat shop called "The Lamb Shoppe." Here they sell lamb, beef, chicken, eggs, woolens and other farm and garden surpluses from time to time. While 75 miles from the Twin Cities, most of their customers come from there and enjoy a "country outing."

"We have found that people from the city will come out to the country to get those things they cannot get in the nearby grocery store."

She said quality lamb is very difficult to find in America and so serves as their main customer draw. The grassfed Jersey beef is sold for only slightly more than commodity-priced beef and is offered as much as a service to the customer as a profit center. The steers are bought as calves from dairying neighbors and are primarily used to soak up pasture surplus to the sheep.

Jersey is ranked right behind Angus as one of the most consistently tender meat breeds. They fatten easily on grass and the fat is always a healthy yellow color. Doug said he particularly liked that the Jersey steer could be killed over a wide weight range and still produce a quality product. He said this made it much easier to provide a year-round supply.

"Product diversification is very important to us," Connie said. "Our customers come all this way and want more than one thing for the journey. We plan to add pastured turkeys and always try to keep our minds open to other species that we could layer over our current mix."

Doug and Connie said propagandizing their customers about the health benefits of grassfed meats is an important part of their sales pitch.

"While we aren't certified organic, once they hear our story about the importance of grass raised animals, they never ask about it again," Connie said.

All meat is sold vacuum-packed as frozen cuts. Their biggest retail sales times are weekends, holidays and grilling season.

The lamb sells for $9.95 a pound year-round, year in and year out. Crown rolls are a popular specialty at $14.95 a pound. (2000 pricing)

The price of the lamb is not an objection with their customers who include New York real estate developer, Donald Trump and the rock star formerly known as Prince.

The pastured hen eggs are sold in big wicker baskets and the customer is encouraged to pick through the eggs and choose those they want.

"This is just like going to Grandpa's farm," is a common comment and a sentiment Doug and Connie like to encourage.

"People who come to the Lamb Shoppe leave not only with their purchases, but also with the total experience we have created for them," Connie explained.

"We want a very sensory experience for our customers. They see beauty in our pastures and colorful animals, they hear the sounds of lambs baaing, the smell the freshness of nature and feel the wholesomeness of real food raised naturally."

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