Updates from the ASI Lamb Council
March 31, 2005
March/April 2005 -- The American Sheep Industry Association (ASI) Lamb Council met during the ASI/National Lamb Feeders Association (NLFA) convention to discuss a number of issues affecting the lamb market. John Van Dyke, branch chief of the U.S. Department of Agriculture (USDA), Agriculture Marketing Service, Livestock and Grain Market News (LGMN), and Ron Cole, also of LGMN, kicked-off the meeting with presentations on mandatory price reporting for sheep, lamb and wool.
Highlights of their presentations included:
Gary McBryde, Ph.D., acting director of the Economic and Statistical Support at the USDA, Grain Inspection, Packers and Stockyards Administration (GIPSA), updated attendees on a livestock- and meat-marketing research project that GIPSA is administering.
- The mandatory legislation for sheep and lamb reporting will expire Sept. 30, 2005, and will need to be reauthorized. If this occurs, ASI will have the opportunity to work the USDA, Agriculture Marketing Service to revise the regulations of the legislation.
- Both the lamb-carcass report and the imported-boxed lamb report -- high priorities for ASI -- were reviewed. The lamb-carcass report includes sales from producer and producer groups starting January 2005. The imported-boxed lamb report, also started January 2005, is similar to the domestic-boxed lamb report, except it reports on imports from New Zealand and Australia.
- The transition of reporting wool on a clean basis started January 2005. This move will put U.S. wool prices on a more comparable basis to world prices.
Congress allocated GIPSA $4.5 million to study the marketing procedures of sheep, cattle and hogs from the production to the retail level.
The five study goals are to:
McBryde said 6,800 surveys will be mailed to people from the producer to the retailer level for data collection. In addition, data on actual transactions will be collected from the largest businesses at each level of the marketing channel. He stressed the fact that all surveys will be kept confidential and that this study will only contain factual reporting and not recommend policy.
- identify the marketing procedures and their terms;
- determine reasons given for their use and how much each arrangement is utilized;
- determine if there are price differences between the marketing arrangements;
- identify the costs and benefits associated with each arrangement; and finally
- determine the implications for the livestock and meat marketing system of using each arrangement in the marketing channel.
Frank Moore from Mountain States Lamb Cooperative (MSLC) led an interesting discussion on the focus of the commodity marketplace on a fat lamb rather than a lean lamb.
He explained the marketing system that MSLC is developing to provide a consistent, high-quality product to the consumer, while also rewarding the producer or feeder who supplies the product. They work off a grid-pricing system which offers premiums for "the right type of lamb," and discounts for those lambs that do not meet these criteria.
"The lambs that receive discounts (at MSLC) may have brought more money on the commodity market, but they were not the quality of product the consumer wants," Moore said. "It appears that the number one problem of the U.S. sheep industry is not predators, imports or disease. Our industry's biggest problem may be the willingness to sell a less than desirable product to our customers."