LMIC Lamb/Sheep Update: Re-Building Phase; Record Prices
May 20, 2005
May 20, 2005 -- In response to historically high market prices combined with much improved pasture and range conditions, signs that the U.S. sheep and lamb industry has fully entered an expansion phase continue to appear. As of Jan. 1, 2005, the number of all sheep and lambs in the U.S. posted a year-to-year increase for the first time since 1990. During 2005, the number of mature ewes in the U.S. will likely show an annual increase, again, for the first time since 1990.
A key indicator that the U.S. flock is into a re-building phase has been sheep and lamb slaughter data, which is indicating that producers are retaining a larger portion of mature ewes and ewe lambs. In the first quarter, commercial sheep and lamb slaughter totaled 704,000 head, 4.8-percent below a year ago. Based on recent slaughter data for April, sheep and lamb slaughter is expected to be down 17 percent from a year ago, with mature ewe slaughter down nearly 24 percent. Further, in recent years many U.S. cull ewes have been exported to Mexico, but the pace of those shipments has been down significantly, too.
As a result of year-to-year declines in slaughter and lamb-meat imports, slaughter-lamb prices have posted new record highs in 2005, having averaged $186.49 per cwt. (dressed weight basis) in the first quarter, 12-percent higher than a year ago and $66 per cwt. more than the prior five-year average. Slaughter-lamb prices are forecast to modestly decline for the remainder of the year, with seasonal lows expected this fall. For the year, slaughter lamb prices are forecast to set another record high, 3-percent to 4-percent above a year ago. However, larger supplies of slaughter lambs next year will push prices lower in 2006 (preliminary forecasts are for a 2-percent to 7-percent year-to-year decline).
Feeder-lamb prices also have established new records this year. In Texas, 60-to 90-lb. feeders averaged $132.25 per cwt. in the first quarter compared to $128.87 per cwt. last year. Feeder-lamb prices have remained relatively strong in April but are expected to seasonally weaken into the spring and summer months. Nonetheless, annual feeder-lamb prices for 2005 are projected to be 2-percent to 4-percent above a year ago.
Article reprinted from Livestock Marketing Information Center