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Wednesday, December 05, 2007

11/30/2007 6:00:00 AM Email this article • Print this article



Drought could shrink U.S. flocks

Sheep numbers could decline 4 percent, says analyst


Dave Wilkins

Capital Press


SUN VALLEY, Idaho - Continued drought and high feed costs could force many U.S. sheep producers to scale back next year, an industry analyst said.


U.S. sheep producers have been helped by a strengthened domestic market, the weak dollar and some government lamb purchases this year.


But they've also been hindered by extremely dry range conditions in parts of the West and soaring feed costs, Ron Cole, a consultant to the American Sheep Industry Association, told producers attending the Idaho Wool Growers Association convention Nov. 17.


"Looking out ahead, I think there's going to be a significant decline in overall sheep numbers in the United States of 2, 3 or 4 percent," Cole said. "It's going to be down."


California sheep producers have a major drought problem that has continued for well over a year, he said.


"They're liquidating herds down there," Cole said. "They simply can't find the feed."


Drought and high feed costs are also likely to force some Idaho producers to scale back, he said.


"We're probably going to lose 3,000 to 5,000 ewes in Idaho this year just simply from the grass situation that we have - the cost of feed and so forth," Cole said.


Idaho started this year with 178,000 breeding ewes one year old and older - the same level as in 2006, according to the National Agricultural Statistics Service.


Total U.S. sheep and lamb inventory on July 1 was 7.73 million head, slightly down from levels of a year earlier.


The high cost of hay and feed grains will make it tough on lamb feeders this winter, Cole said.


Corn prices have come off their highs, but hay has remained expensive because of tight supplies.


But all isn't bleak in the U.S. sheep industry, Cole said.


Lamb carcass prices have been well above their five-year high, and U.S. processors have maintained their profitability throughout the year, even during the summer months when they usually operate in the red.


"It's been a good year," he said.


The weaker dollar has also aided U.S. producers because it has made imported lamb products more expensive in the United States.


Imports - primarily from Australia - account for about half of all U.S. lamb consumption.


Australian sheep producers are also facing drought problems that are as bad or worse than those in the United States.


Australia has lost 10 to 12 percent of its ewe herd over the past two years because of drought conditions, Cole said.


"That trend will probably continue. That's a significant change that affects your market in the U.S.," he told Idaho producers.


The demand for U.S. lamb products is also picking up, said Gary Pfeiffer, executive vice president of sales and marketing for Superior Farms. Sales were up about 6 percent last year.


The hottest trend in the retail meat market is the focus on health and nutrition, Pfeiffer said.


More and more consumers are looking for organic or natural products and products that are locally produced.


"Whenever I sit down and talk with retailers, these are the things they want to talk about," Pfeiffer said.


Superior's pure lamb program fits into that category because it's produced without the addition of any hormones or antibiotics, he said.


Increasing the demand for U.S. lamb is still a big challenge for the industry.


Lamb accounts for less than one-half of 1 percent of all U.S. protein consumption, and 76 percent of consumers never prepare it at home, Pfeiffer said.


Staff writer Dave Wilkins is based in Twin Falls, Idaho. E-mail: dwilkins@capitalpress.com.

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That story rings pretty true for this part of the country as well. Corn prices are actually going up around here, but other than that, we're facing all the same issues they're facing out west. Amazingly lamb prices have remained decent (at least in my experience so far) despite folks having to sell off stock.



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There are a lot of sheep for sale here. Hay prices are up to around $7.00 per bale, from $5.00 a bale two years ago. Also, a friend of mine and I went to the sale and she sold off all her wether lambs. They brought her a whopping $10 a piece. I am off to the sale this weekend to sell off my wethers, as I don't want to pay to feed them through the winter. My irrigation was turned on three weeks later than normal, and cut off more than a month sooner than usual. Therefore, my pasture dried out quicker, and I was already hay feeding by the end of November, when I normally don't start hay feeding until early January. And this is a very tiny operation. I couldn't imagine what the real sheep farmers are doing. I am hoping we have a very heavy snow season ... but so far, it's been a very mild winter.



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We lost 10 acreas of feed corn this year, ponds dried up to near to nothing for awhile, God is our irrigation system and an uncooprative one at best this year. Hay prices are through the barn roof, people are selling off, giving in a lot of instances, stock away so they dont have to feed through the winter, couldnt get our winter pastures planted, not even a cover crop ( dry soil, no rain in the forcast) and there have been several instances that I have had to decline some pretty good sheep deals, because I feared that I wouldnt be able to afford to feed more critters. Not only is hay expensive, it is pretty scarce around here too. Everyone is hanging on to what they have for thier own stock. Getting ready to slaughter a fatted lamb, and invite over a few Native American friends by for a feast, and see if I cant get them to send some smoke signals to the powers that be, or at least teach me a rain dance! Soy bean fiels didnt make any beans, so I see farmers baling it up to feed thier cattle through the winter. Some things gotta give, and now the prices of gas and deseil are eating up any chance of a profit in an unprofitable year. Makes me want to re-think the whole idea of hobby farming. This year has been a hard blow to a majority of farmers and ranchers most every where. I hope the New Year brings with it, a better year for all.

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Where I live in southern Ontario, lamb prices remain high..... just shipped some lambs at $1.51. Culls are lower now than earlier in the year (my guess is high volume but would have to check) at only $0.90. I last shipped culls in June at $1.08. (an alltime high for me!)


Hay prices are very high here too because of the drought we've had. Although not as bad as some places, we have been feeding out our winter hay stores since August. We are good for a few more months but will have to buy in by Feb.


Um, something I wanted to ask regarding the original post....your government buys lamb? Can you explain this please?


Nancy in Ontario

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About once every five years -- although the schedule is not intentional -- the USDA purchases lamb roasts to use in various government food service programs. It's made available to school lunch programs, the military, meals for the elderly, VA hospitals, etc., etc.


I believe that the purchases this year were the last authorized in 2005.


The buys are often a response to excess inventory of relatively low-value cuts such as shoulders in packers' freezers. It's usually pitched as a way of stimulating demand for US lamb, which isn't even a problem, as evidenced by the fact that we produce only half of what we eat.

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It's a subsidy, but it's not a subsidy that has any effect on supply or demand. I suspect it's something that some congressperson sticks into a bill in a smoke-filled room as a favor to someone.


But sheep farmers agreed to tax themselves a half a cent per pound plus 50 cents per head on all sheep that are slaughtered, and the money is paid to the American Lamb Board to promote American lamb. As I pointed out above, there's no shortage of demand for lamb in the US; the shortage is in supply and infrastructure for processing and distribution. The biggest problem is that most of the lamb is produced in the intermountain West and most of it is consumed on the East coast.

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Yes, we also pay a small 'tax' to our provincial sheep board. ($1.45 per head - or close to it)


It sounds like you have the same problems we do here in the north of you. Although they have been trying to address infrastructure since the BSE trouble. It has helped with more plants becoming federally inspected, allowing many of the larger chains of grocery stores to buy our lamb. Has made a difference in my pocket I think. Prices remain high partly because of this (IMO).


I wonder how much it costs you for your government to step in a buy your surplus? I don't begin to understand your agricultural structure so won't comment on it, but if what they are doing makes no difference at all.....it must cost money! :rolleyes:



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I made a typo in my statement about the production tax on sheepmeat in the US. It's half a cent per pound liveweight plus 30 cents per head. Usually works out to about $1 per animal for a full-sized heavy lamb.


The amount of money involved in the lamb roast purchases is pretty minimal: on the order of a couple of million dollars. Which sounds like a lot until you realize that corn subsidies are in the billions.


I would be very happy to pay a production tax if the money were directed at solving a problem that actually exists -- such as fabrication infrastructure, distribution facilities, or quality control at the farm level. But creating generic demand for a product that is already in higher demand than the nation can produce, fabricate, and distribute just seems silly.

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