The lamb market for farmers and ranchers has collapsed to well below half of last year's prices. That, combined with the severe drought and the corresponding high cost of feedstuffs, has put sheep producers in a very difficult situation. Eight U.S. Senators, in a letter to Agriculture Secretary Tom Vilsack, stated this is why prompt support is needed for sheep producing operations.
"With price swings exceeding normal boundaries and an insurance product that does not appear to be offering price protection as intended, my Senate colleagues and I want the U.S. Department of Agriculture (USDA) to investigate market anomalies, make much-needed corrections to its livestock risk-protection insurance and push hard for increased lamb exports," said Sen. John Thune (R-S.D.).
U.S. Sens. Thune, Max Baucus (D-Mont.), Jon Tester (D-Mont.), Tim Johnson (D-S.D.), John Hoeven (R-N.D.), Kent Conrad (D-N.D.), Michael Enzi (R-Wyo.) and John Barrasso (R-Wyo.) requested the secretary to implement agriculture department actions in four key areas. A request was made for the Grain Inspection Packers and Stockyards Administration to immediately investigate the drastic change in the price spread between live lambs and meat markets to ensure that the benefits of the recent USDA commodity purchases actually reached the farm and ranch gate.
"When everyone plays by the rules, Montana sheep producers can compete with anyone around. Montana sheep producers deserve the right to compete on a level playing field so they can continue supporting agriculture jobs and rural economies across the state - and that's what we're fighting for," said Baucus.
The senators also called for support of lamb-market price discovery and transparency, including market reporting and statistical reports provided by the department, to provide accurate and unbiased market information to producers and businesses.
"Agriculture is Montana's largest industry, and the food we raise is world-class," Tester included. "Our sheep producers are dealing with market disruptions from this year's record drought. They deserve a chance to compete on a level playing field so they can get back on their feet and keep feeding our families and strengthening our economy."
Additionally, the letter makes a request for the Risk Management Agency to conduct a full review of the Livestock Risk Program for lamb (LRP-Lamb) and to make the necessary adjustments to allow the program to function as an effective risk-management tool for sheep producers. In recent weeks, the policies have not been functioning as intended due to administratively imposed restrictions, states the letter.
"Market instability hurts producers and can affect consumer behavior at the meat counter," stated Enzi. "The USDA needs to explore whether our lamb producers have suffered from price manipulation and determine what changes need to be made to help producers manage risk in the market. Addressing this quickly will help prevent further price swings and give ranchers confidence that they are competing on a level playing field."
In conclusion, the senators asked Vilsack to make the opening of export markets for American lamb a priority.
"We have lamb companies interested in trade beyond North America, however, key markets, such as Europe, Taiwan and Russia, are closed to American lamb," commented Peter Orwick, ASI executive director. "In fact, Japan shut down lamb trade nearly 10 years ago due to BSE and a key push from USDA is needed to right this trade disparity."
Rep. Kristi Noem (R-S.D.) also forwarded a letter to Vilsack iterating the importance of supporting the sheep industry in the same four areas.
Noem wrote, "While the drought has impacted the entire agriculture industry, the sheep industry has been hit particularly hard. In order to ensure a thriving, robust sheep industry here at home, I am asking that USDA take immediate and thorough action."
Press Release Issued by ASI