Size of herd, land holdings allows rancher to supply lamb all year long

By MATEUSZ PERKOWSKI

Capital Press

The transformation of Reed Anderson's business model was motivated largely by frustration.

By the early 1990s, the Brownsville, Ore.-based sheep rancher had spent the better part of a decade focused on expanding the size of his business.

Despite amassing more land and sheep, Anderson wasn't making consistent profits and felt vulnerable to the whims of the commodity lamb market.

"It was a crap shoot. It was a real gamble. There were a lot of times we were happy just to break even," he said. "We were pretty unhappy with the status quo."

Anderson had brushed up against the concept of directly marketing to restaurants and retailers but initially dismissed the strategy as incompatible with his operation.

"My mindset then was more about volume," he said. "I didn't see enough volume that I thought it was a viable option for us."

As he started doing the math, however, the prospect of bypassing the mainstream meatpacking system began to look more financially appealing.

The idea continued to gain momentum when he began speaking with local grocery stores in Oregon's Willamette Valley.

Meat packers were seeking greater efficiency and were increasingly unwilling to fill the small order requests of independent retailers.

Anderson saw an opportunity and began diverting some of his lambs from the mainstream market channel by having them processed at a nearby slaughterhouse, Mohawk Valley Meats in Springfield, Ore.

Though this sideline was at first small, selling lamb to grocery stores was clearly more profitable.

"I could make more money on two than I could make on 10" sold to a large packer, he said.

At the time, the "locavore" movement was in its infancy, but it was apparent consumers were interested in tracing their food back to the farm, said Mike Wooley, owner of Long's Meat Market in Eugene, Ore.

Wooley was an early client of Anderson's and continues to buy his lamb in addition to distributing the meat to local restaurants.

"We were way ahead of it," Wooley said, noting that local professors and others from the nearby University of Oregon helped alert him to the trend. "We have a pretty educated group that comes through here."

As the direct-marketing business grew over time, Anderson's strategy of establishing a large, year-round supply of lamb began to pay off. Potential customers needed consistency.

"The question was, 'Will you have this available all the time?'" he said. "The answer was yes."

At any given time, Anderson has an inventory of 3,000 to 7,000 lambs grazing year-round on several hundred acres he owns in the Willamette Valley and thousands of acres he leases across Western Oregon. Roughly 75 percent of his sales are now through direct-marketing channels.

Anderson was able to grow his business thanks to a multitude of contacts in the farm industry, which he began making as a young man earning money by shearing sheep.

In the 1980s, the economic turmoil in the farm industry was conducive to Anderson's goal of acquiring land because it had steeply dropped in value.

"There were people going out of business left and right," he said.

His operation benefits from the multitude of climates in Oregon, because grass for lambs will keep growing in some areas even as it becomes dormant in others.

"What makes it hard for most direct marketers is having a steady supply," Anderson said. "You have to have a steady supply 52 weeks a year."

Consistency is especially important for grocers who hire workers to turn carcasses and primal cuts into specialized portions, said Lauren Gwin, an economic researcher specializing in meat marketing at Oregon State University.

If the farmer can't deliver the promised amount, the grocer must still absorb those labor costs, she said. Grocers also require a steady supply of lamb because their customers expect to buy the meat year-round.

"They have a real hard time dealing with seasonal meat products," Gwin said.

Around 2000, Anderson started selling to restaurant clients.

Word spread among chefs about his product, which is now featured in restaurants as far flung as Las Vegas, Nev., and Orlando, Fla.

Anderson's reliability has helped him secure market share in the competitive restaurant industry, said Geoff Latham, who distributes Anderson's lamb to restaurants in Portland through his company, Nicky USA.

For example, some ranchers enter the restaurant market when prices for livestock are low but then exit it when those prices strengthen, he said.

"Reed is looking at this as a long-term deal," Latham said. "It is a lot more work trying to keep all these people happy rather than selling to just one plant."

Reed Anderson

Age: 52

Occupation: Sheep rancher and grass seed farmer

Hometown: Brownsville, Ore.

Family: Wife, Robyn, and two grown sons

Education: Graduated from Harrisburg Union High School in 1977