Inventories Motivate Section 32 Request

Inventories Motivate Section 32 Request

WASHINGTON – ASI’s executive board voted to request that the U.S. Department of Agriculture’s (USDA) Livestock, Poultry and Seed Program consider the implementation of a Section 32 lamb-meat purchase.

Declining prices justify this request as live, slaughter lamb prices at auction were about $20 per hundred weight (cwt.) lower during the first quarter of 2015 compared to a year ago.

At 36.8 million pounds, the amount of lamb and mutton in cold storage in March, 2015, was 5 percent higher from the previous month and 40 percent higher year-on-year. For perspective, that is nearly double the level of 2008.

In addition, the strength of the U.S. dollar is contributing to a higher volume of imported lamb and contributing to price pressure on the U.S. market. The magnitude of imports from Australia alone was up 4 percent year-on-year during the first quarter of 2015.

ASI visited with key lamb-processing companies and they are fully supportive of the request but strongly encourage that all expediency be undertaken due to the back up of slaughter lambs in the feeding system.

“ASI leaders discussed the USDA commodity purchase program option with the department during our recent trip to Washington, D.C., and, following the Easter sales period, it was agreed that a purchase request was in order.” said Burton Pfliger, ASI president and a North Dakota producer. “The program is designed to support prices at the farm and ranch gate and there is high demand for the program this year by a number of meat and food commodities.”

Section 32 is a permanent appropriation that since 1935 has earmarked the equivalent of 30 percent of annual customs receipts to support the farm sector through a variety of activities, including the funding of child nutrition programs. The Secretary of Agriculture also uses Section 32 funds to purchase non-price-supported commodities like meats, poultry, fruits,vegetables and fish.

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