The U.S. Department of Agriculture's (USDA) Agricultural Marketing Service (AMS) announced the purchase of 396,000 pounds of lamb leg roast and lamb shoulder chops at a cost of approximately $1.64 million. This product will be distributed in federal food and nutrition programs.
"American lamb producers and the entire market will benefit from the purchase of this lamb," commented Margaret Soulen Hinson (Idaho), president of the American Sheep Industry Association (ASI). "The intent of the program is to strengthen lamb prices to the farm and ranch level and we are very appreciative of the department taking this very much needed action."
Both companies that submitted bids -- Mountain States Rosen LLC and Transhumance Inc. -- were awarded contracts from this invitation. The lamb is scheduled for delivery in September.
"With deliveries in September, the winning companies can begin processing to fill the orders promptly," said Peter Orwick, ASI executive director. "By my count, this bid accounts for the movement of more than a dozen semi loads of lamb."
ASI secured approval of the program to spend a minimum of $2 million in section 32 funds through calendar year 2012 to provide the industry with more confidence in this rough economy.
Additional program information can be accessed at www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateJ&page=CPDCommodityPurchaseMeatFish.
In related news, ASI leadership petitioned AMS to support an additional section 32 commodity purchase asking for consideration of additional millions of dollars of authority for lamb purchases.
Soulen Hinson commented that this program is the quickest and most efficient way to address the backlog in supply and improve prices for sheep producers. Industry, company and department officials discussed options this week for the remaining loads to be bid along with the potential of additional authority for further product offerings this fall.
Compounding the situation are the severe drought conditions across much of the nation hitting grazing lands and forcing lambs into the feeding sector sooner than normal as well as the dramatic increase in all feed costs. AMS is well aware of the collapse of the live lamb prices in recent weeks with July prices for slaughter and feeder lambs selling for half the amount they did in 2011.