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Sheep Industry Not Immune from Country’s Struggles

Benny Cox, ASI President

What a ride we have gone through in recent months. No one could have known, but here we are in another trying time. Thank goodness here in our area recent rains this spring have improved our pastures where we are not forced to move stock because of drought issues.

The excessive purchase of many products in the grocery stores – including meats – has been crazy. We all might figure that will change, but when? By the time you are reading this article, we might have a better idea. Slaughter and delivery are two important factors in the food chain and on March 30 I was informed Wolverine Packing in Detroit had temporarily shut down. Other processors have followed suit.

Not everyone is aware of this, but in the traditional lamb business 50 percent or so of lamb is sold in restaurants and hotels. So with many of those being closed or offering only limited services, that puts us in a somewhat negative position. The ethnic market for sheep in San Angelo, Texas, fell off drastically during our weekly sales on March 24 and 31. Most of the slaughter and feeder lambs fell off as much $1 per pound from a very high market in those two weeks. The kid goat market took a big hit on March 31, with a $50 to $60 loss.

The ethnic marketing groups can shutdown in many cases overnight and open back up the next week or two without a challenge, it seems. We might see the ethnic market recover a good deal faster than some of our other facets of the livestock market. This is not the case with large processing companies that have many employees on hand that need a paycheck every week. The Easter season is very important to the traditional lamb trade and the timing of this disruption has not been good, to say the least.

ASI has continued to plead its case to the U.S. Department of Agriculture for the need of assistance: first, on wool and pelts, and now on lamb sales. Prior to the virus issue, lamb sales were moving along nicely. ASI worked with university and industry analysts to put a damage figure of $350 million lost on today’s feedlot lambs and the 2020 lamb crop for the purposes of a target for the request of financial assistance via USDA. No one knows all of the ways the pandemic will affect our business, but the analysts hit the impacts well enough that some concerns occurred so fast they increased the dollar figure from the initial $300 to $350 million. No one seems to be completely comfortable with an estimate on just how much this will affect us on down the line.

The answer depends on how fast we get people back to work and start the chain of production and delivery moving in the right direction. The lamb imports have stayed at high levels so far again this year, averaging more than 200 percent of domestic production on a weekly basis.

ASI Executive Director Peter Orwick reports his understanding that the Mountain States Rosen plant operation has been approved for Small Business Association assistance, which is positive. ASI and the Wyoming Wool Growers Association supported language from Wyoming Sen. Mike Enzi to allow Mountain States eligibility due to their Chapter 11 bankruptcy filing. We believe it is critical to the processing capacity of our industry to have Mountain States continue in light of recent processing backlogs, the upcoming USDA lamb purchase and Mandatory Price Reporting of lamb.

The lambs that were bringing more than $1.50 per pound through the winter were slaughtered at $1.00 that week. I seem to hear of another plant shutdown every week and it’s not just lamb, this includes some pork, chicken and beef facilities, as well.

Y`all keep on doing what you do best and I will see you on down the road.

COVID-19 Threatens Lamb & Wool Markets

JULIE STEPANEK SHIFLETT, PH.D.
Juniper Economic Consulting

COVID-19 has had an immediate impact on lamb markets: Prices are down and industry slaughter capacity has slowed. Similarly for wool. Domestic wool trade is at a standstill, and international markets have slowed. The longer-term outlook is even more worrisome.

The Coronavirus lamb story is mixed. In the short-run, fresh meat sales spiked because of widespread panic in which shoppers stocked their pantries and freezers. In the week ending March 22, meat sales were up 91 percent year-to-year and volume was up 78 percent (IRI, from Supermarket News, 3/31/20). During this period, lamb was up 55 percent in sales. Exotic meat sales such as duck and bison more than doubled from a year ago.

In the long-run, an uptick in at-home lamb preparation might be sustained if consumers are able to find lamb in the meat cases at competitive prices. However, consumers’ freezers might be stocked for some time now. Further, grocery sales are often lower-priced cuts such as the shoulder and ground lamb, so grocery sales will not likely support the entire industry.

COVID-19 will have a significant longer-term effect on lamb markets, more so than other proteins. This is because more than half of lamb sales are sold in foodservice. With restaurants resorting to take-out only service, lamb sales are down. Lamb is known for its high-end cuts sold in fine-dining establishments – a service that doesn’t translate easily to take-out.

Reportedly, the sale of higher-priced middle meats such as the rack are at a standstill. Early reports revealed that some retail and foodservice lamb accounts are being cancelled entirely, for large and small processors alike. As of early April, cancelled orders were already seeing an effect on live slaughter lamb markets.

 

Easter Sales Uncertainty

A Texas A&M University webinar explained that the effect of COVID-19 might be particularly significant for the lamb industry because a hefty portion of annual sales occur during Easter (4/1/20). During Easter, the sales of legs by volume is 359 percent higher than non-Easter weeks. Total lamb expenditures rise sharply during Easter, from an average of $6.5 million weekly to $23.9 million (2009-2014 FreshLook retail outlet data).

Another factor adding stress to the lamb markets is that Mountain States Rosen – the second largest lamb processor after Superior Farms – filed for Chapter 11 bankruptcy protection on March 19 (Capital Press, 3/31/20). Reportedly, the cancellation of foodservice accounts was the straw that broke the camel’s back. Reportedly, as of early April, MSR’s harvest was down about 80 percent from its typical pre-Easter numbers.

Given that Easter is the largest demand period for the lamb industry, there might be a significant backlog of slaughter lambs in the system. Some estimates put the delay of up to five to six weeks, which will result in overfat market-ready lambs.

A new processing plant – Colorado Lamb Processors, LLC – plans to start operation this summer in Colorado. It is a smaller-scaled plant compared to MSR, and it doesn’t plan to fabricate. Thus, disruptions in weekly slaughter are likely in the next few months.

 

Consumer Expectations Drive the Market

What happens in the lamb markets is a function of consumer expectations. If the outlook is positive, markets will respond positively, keeping slaughter current and prices high. COVID-19, however, is a profound negative shock to the lamb market. According to Dr. David Anderson, professor and extension economist at Texas A&M, “A significant demand destruction is expected, because consumers fear we are slipping into a recession.”

In March, the Index of Consumer Expectations by the University of Michigan was down 14 percent monthly and down 10 percent year-on-year. According to the University of Michigan, March saw the fourth largest monthly downturn in consumer confidence after 1980 and 2008 recessions and Hurricane Katrina.

University of Michigan Surveys of Consumers Chief Economist Richard Curtin commented that stabilizing confidence in April will be a challenge given rising unemployment and deteriorating household incomes. Curtin added, “The extent of additional declines in April will depend on the success in curtailing the spread of the virus and how quickly households receive funds to relieve their financial hardships.”

One redeeming factor looking forward is that lamb markets were in good shape prior to COVID-19 (Texas A&M, 4/1/20). Prices were relatively high, reflecting a current inventory with tight supplies.

On a more positive note, American consumers might be discovering or rediscovering lamb in home-cooked meals. Megan Wortman, executive director of the American Lamb Board, commented that ALB food bloggers are continuing with lamb video tutorials and blog posts for the hundreds of thousands of followers, according to an article in The Fence Post.

Feeder Lamb Prices Lower

In the direct feeder lamb report, 1,500 head of new crop lambs traded out of Texas in mid-March at $206 per cwt. for a 93-lb. lamb. Prices for March were 22-percent higher than the March five-year average.

Many feeders off of Californian pastures were ready for sale in early April, but faced reduced marketing options.

Sixty- to 90-lb. commercial feeders in Sioux Falls, S.D., averaged $223.25 per cwt. in March, down 1 percent monthly and steady with a year ago.

By the second week of April, feeder lambs were seeing a sharp drop in prices due to the COVID-19 demand fallout. Sixty- to 90-lb. feeders in Sioux Falls saw a 32-percent drop in prices from March to the first two weeks of April, from $223.25 per cwt. to $150.85 per cwt. Sixty- to 90-lb. feeders in Fort Collins, Colo., saw a 19-percent drop in the same period to $174.08 per cwt.

 

Slaughter Lamb Prices Higher,… then Lower

Slaughter lamb prices on a formula basis averaged $299.22 per cwt. in March, up 1 percent monthly and 11 percent higher year-on-year. The live-weight equivalent in March was $147.14 per cwt. Live weights at harvest averaged 170 lbs., up 5 percent monthly and up 5 percent year-on-year.

Overall, the impacts from the Chapter 11 bankruptcy filing combined with suspension of operations at some processing plants and reductions in lamb slaughter are preventing USDA-AMS from reporting market price data under Mandatory Price Reporting. In the first week of April, confidentiality guidelines were not met for either the live, negotiated slaughter lamb price or the slaughter lamb price on formula. However, between the two, the combined comprehensive series was reported.

Comprehensive slaughter lambs averaged $304.52 per cwt. in March, but fell 9 percent to $278.64 per cwt. in the first two weeks of April. Prices fell to $138.31 per cwt. on a live weight basis.

At auction, slaughter lambs at Sioux Falls averaged $161.88 per cwt. in March and then fell 31 percent to $111.55 per cwt. in the first two weeks of April (for Choice and Prime, 100 to 150 lbs. lambs).
Early April forecasts are that both feeder and slaughter lamb prices will move lower before bouncing back. Once the United States economy gets back on track, the lamb industry recovery might lag behind other markets.

 

Rack Holds Steady,…For Now

As of the second week of April, feeder and slaughter lamb prices were weakening, but the wholesale composite was holding steady. This is expected to be a short-term disconnect with expectations that cutout prices are to decline. Much market uncertainty prevails as of this writing.

The wholesale lamb composite averaged $429.97 per cwt. in March, the highest monthly average on record since August 2001, when price reporting began. Higher lamb prices can be attributed to year-on-year gains in income, and higher lamb demand. On average, since the 2008 recession, incomes have been rising, making the higher-priced protein more attractive.

The 8-rib rack, medium, averaged $901.95 per cwt. in March, up 3 percent monthly. The rack has only twice before seen $9 per lb., in mid-2011 and in mid-2017. While the rack and shoulder were strong, other primals weakened in March. The shoulder, square-cut, averaged $332.25 per cwt., up 2 percent monthly. The loin, trimmed 4×4, average $524.74 per cwt. in March, down 2 percent monthly. The leg, trotter-off, averaged $400.12 per cwt., down 8 percent monthly.

The shoulder was up an unprecedented 20 percent year-on-year in March. The leg was also higher, up 10 percent year-on-year. The rack, 8-rib, medium, was up 3 percent year-on-year. The loin remained steady from a year ago.

 

Production and Trade Down

In the first quarter, estimated lamb harvest was 443,817 head, down 4 percent year-on-year. Estimated lamb harvest was down 6 percent year-on-year to 21.8 million lbs.

In January and February, the portion of federally-inspected harvest that graded yield grade 4 and 5 was 27 percent, down from 30 percent in January and February 2019. Harvest weights in the first quarter were 135 lbs. live weight, or 68 lbs. dressed weight, down about 2 percent year-on-year.

At the beginning of April, a reported 134,618 head of lambs were counted in Colorado feedlots, up 15 percent monthly and up 8 percent year-on-year, but 7 percent lower than April’s five-year average.
If grocery stores sales continue at an accelerated pace, freezer inventory can supply the heightened demand for some time. At the beginning of March, the amount of lamb and mutton in cold storage was 37.9 million lbs., up 3 percent monthly and up 7 percent year-on-year. Recall that the portion of imported product in the freezers is unknown.

In January and February, lamb imports were down 19 percent year-on-year to 33.5 million lbs. Imports from Australia were down 18 percent to 26.1 million lbs. and New Zealand lamb was down 23 percent to 7.0 million lbs.

Reportedly Australian lamb exports to the United States have slowed due to COVID-19. This might give domestic producers some relief as maintaining American lamb’s market share in this crisis will be a challenge.

 

American Wool Market: “Sit and Wait”

The American wool market was at a standstill in early April. Accelerating COVID-19 cases led to suspended wool sales from warehouses. While the testing at New Zealand Wool Testing Authority was temporarily closed due to COVID-19, it was scheduled to reopen on April 23. NZWTA is the wool lab testing for American wool while the new Texas A&M lab is being expanded to begin commercial wool testing in 2021.

Fortunately, wool can be stored for later sales. Reportedly, most warehouses are accepting wool for storage, although there is some carryover from last year’s clip. If wool is not taken to a warehouse, it should be stored in a covered space to be kept dry for future sale. Wool preparation continues to be crucial.

Growers are reminded to consider using the government wool Loan Deficiency Payment or Marketing Assistance Loan programs. More information about these programs are on page 24 of this issue of the magazine. To view loan rates and payments (updated weekly), visit SheepUSA.org/issues-governmentprograms-woolldp.

In early April, the Australian wool market hit a four-year low. Australian wool auctions were still running in early April, but sales were disrupted due to the COVID-19 virus. Markets were closed in India and Italy due to border closures on top of the factory closures in China. As of this writing, there were limited markets available to sell Australian wool. A few of the major wool markets were effectively – either fully or partially – closed to wool. The industry has serious constraints facing the international wool market.

The Australian wool auction price averaged 1,301 AUD cents per kg. clean on April 8, down 33 percent year-on-year. In U.S. dollars, the value was 797 U.S. cents per kg, or $3.62 per lb. clean, down 43 percent year-on-year. The buyers that were present in Australian wool auctions were cautious and sales to China were slow.

The loss of the American wool market in part in 2019 and again in 2020 can depress incomes across the marketing channel – from growers to brokers to processors. However, the loss of an export market also has a multiplier effect that can depress rural incomes. The U.S. Department of Agriculture Economic Research Service estimates that in 2018 each dollar of agricultural exports stimulated another $1.17 in business activity. This means that for every $1 of wool that is not exported, $1.17 is lost in additional income in rural areas and beyond.

In coming months, there is concern that lower discretionary spending will mean lower demand for wool apparel.

Lamb & Wool Producers Eligible for Assistance

The U.S. Department of Agriculture announced on April 17 a $19 billion Coronavirus Food Assistance Program that will put money directly into the pockets of livestock producers – including lamb and wool producers – all across the United States.

The program was budgeted in the Coronavirus Aid, Relief and Economic Security Act passed by Congress and signed by President Donald J. Trump in late March. As is the case with any government program of this size and nature, details take time to develop and were still in that process as this issue of the Sheep Industry News went to press.

“U.S. Department of Agriculture Deputy Secretary Stephen Censky confirmed to me on April 18 that lamb and wool are eligible commodities for direct assistance under livestock relief of the CARES Act,” said ASI Executive Director Peter Orwick. “ASI will be providing additional price information to the department and relaying assistance program information to producers and their state sheep associations as it develops.”

Analysts have placed COVID-19 damage to the American sheep industry at $350 million, and ASI is encouraging USDA to target that number in financial assistance to the industry.

“Slaughter lamb prices have declined one-third in just three weeks. Feedlots are locked into substantial losses on their current lambs due to this decline, and anticipate that damage will be realized through the 2020 lamb crop that will affect all producers and feeders,” Orwick said. “Assistance needs to be equitable to involve producers and feeders on their lamb and wool.”

ASI President Benny Cox relays the basic structure of the payment assistance as understood at this early stage: USDA will provide $16 billion in direct payments to farmers and ranchers, including single payments determined using two calculations.

Price losses that occurred from Jan. 1 through April 15 will be the first determining factor. Producers will be compensated for 85 percent of price loss during that period. The second part of the payment will be expected losses from April 15 through the next two quarters, and will cover 30 percent of expected losses.

The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. Qualified commodities must have experienced at least a 5 percent price decrease between January and April.

In addition to direct payments, the CFAP will partner with regional and local distributors to purchase $3 billion in fresh produce, dairy and meat.

“We will begin with the procurement of an estimated $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products, and $100 million per month in meat products,” read a USDA press release on the program.

USDA will also utilize other available funding sources to purchase and distribute food to those in need.

“We look forward to working in conjunction with USDA to see that America’s sheep producers benefit from these programs,” Cox said.

Lamb Feeders Facing Difficult Choices During COVID-19 Crisis

While falling lamb prices are nothing new, the uncertainty surrounding the COVID-19 pandemic has put the American sheep industry into an uncertain situation that is proving just as problematic for lamb feeders as it is producers.

“It’s scary right now for everyone, especially in agriculture,” said National Lamb Feeders Association President Jeff Hasbrouck of Double J Lamb Feeders in Colorado. “I see stories about dairy guys dumping out milk and all kinds of strange stuff going on. It all just happened so fast.

“I bought some lambs out of the Imperial Valley (in California) and the day they got to the lot I was losing $110 a head on them. And there’s so much uncertainty. Can I get them harvested? I don’t know the answer to that question. Some of the plants have closed or are having a hard time getting people to show up for work when they are open.”

Hasbrouck hasn’t taken as big a hit as some in the feedlot industry because he owns just 25 percent of the lambs in his lot. But he’s got all the same headaches of trying to help his customers figure out what to do in this unprecedented situation.

“We’re still working hard to get those lambs out of the lot and processed. I have some customers who have retained ownership, had the lambs processed and put them in the freezer,” he said. “At the moment, that’s helping me to stay current. For the customers who can take on the added expense, it allows them to put those lambs in the freezer at a good weight and maintain quality.”

Going into early spring, the outlook for American lamb was good. Prices were solid and the meat was moving. But in less than two weeks, prices dropped from $1.54 a pound to $1, leaving producers and feeders with some difficult decisions to make about the future of their lambs.

“Nobody really knows what to do,” Hasbrouck said. “This is 100 times worse than anything I’ve seen in more than 20 years in this industry.”

Keeping lambs in the feedlots – either because they can’t get processed or in an effort to hold out for better prices – creates a backlog of overweight lambs that reduces overall quality and causes its own problems for the industry.

Hasbrouck said he can limit feed to slow growth, but it actually costs more as the roughage-based feed is more expensive than the corn he feeds regularly. For some producers, it just makes more sense to retain ownership, pay the processing fee and then pay to store the lamb in the freezer for now.

“They’ll have to find a way to move that meat at some point in the next year,” Hasbrouck said. “But I’d rather us do that than create an inferior product with overweight lambs. Personally, I’m trying to get people to understand that frozen lamb is a quality product. This situation might be an opportunity for us to educate people about frozen lamb and the quality that it offers.”

The producers who have taken this approach help clear the way for those who have to sell, regardless of price.

“Some guys look at it like their first loss is their least loss,” Hasbrouck said. “And I can understand that, too. Sometimes you just have to get them sold, regardless of price. But we’re not used to losing $100 on a lamb in this industry, and that’s what some guys are facing right now.”

One other problem that concerns Hasbrouck at this point is that many of the California lambs in the Colorado feedlots are coming up on 1 year of age.

“That’s a whole other problem for the industry,” he said. “But there’s not much we can do about it right now.”

Public Lands Grazing to Continue in 2020

Despite the COVID-19 pandemic, the U.S. Forest Service says grazing on public lands will continue in 2020. The service issued the decree in a memo to regional foresters in late March.

“Our focus is on the safety of our employees and slowing the spread of this virus while we seek ways to reduce impacts to those whose livelihoods depend on using our National Forest System lands,” read the memo. “We believe we have the ability to adjust our normal approach to permit management to allow for a normal grazing season.”

The memo included a three-page supplemental guidance for range management and grazing in these unprecedented times.

Regional foresters were encouraged to contact their permittees or local grazing boards to explain changes for the coming season. Those changes mostly included administrative measures designed to encourage social distancing.

None of the guidelines mentioned in the memo had a direct effect on actual grazing, but rather simply on the administration of grazing in 2020.

MSR Files for Bankruptcy Protection

Just as the COVID-19 pandemic was starting to hit home with most Americans in early March, the American sheep industry’s second-largest lamb processor filed for Chapter 11 bankruptcy protection.

It was another step in a series of recent decisions made by Mountain States Rosen to secure the company’s future. Owned by the Mountain States Lamb Cooperative – which is comprised of 160 lamb producers from across the western United States – Mountain States Rosen closed offices in New York in a planned late January consolidation of operations, and moved those sales to the processing plant in Colorado.

Then came the Chapter 11 filing on March 19, which sent shockwaves through the industry. But Mountain States’ Frank Moore says the company isn’t going anywhere.

“It’s important for people to realize that we’ve been approved to restructure under Chapter 11,” he said in mid-April. “Our operations will be reviewed on a monthly basis. We’ve already got a month under our belts. Everything looks good at this point, especially considering how tough the economy is right now.”

The biggest threat to processing at Mountain States right now is the COVID-19 pandemic. The close-quarter, physical nature of the work has caused outbreaks in processing facilities across the entire livestock spectrum.

“If we have an uptick in illness or absences, we might have to close the plant for a week or two just as a precaution,” Moore said. “We’ve been operating at 50 to 60 percent of normal the past couple of weeks already. Before Easter, we were only doing about half of what we wanted to do. It’s tough because we would like to be doing more. But I think we’ll be ramping back up here in the near future.”

At the time, Moore said four plant workers had tested positive for COVID-19, and that the plant was seeing 20 to 40 workers (of 240) absent on any given day. That’s certainly not the type of massive outbreak that caused the closure of cattle and swine plants in other parts of the United States.

As the company works to minimize the COVID-19 impact on workers’ health, Moore said it’s important to realize that the company is still open for business and processing lambs.

“We are still accepting lambs from our co-op members, and from others,” he said. “We felt like we were starting to make some good progress as a company when the whole country just shut down in mid-March. We’ve transferred some equipment and most of our customers over to Colorado, and we’re still serving customers nationwide.”

The company was also awarded funding through the Small Business Administration that will keep workers on the payroll in the months to come.

“That gave us some breathing room,” Moore said. “With Chapter 11, we have to operate strictly on cash flow.”

What lies ahead for Mountain States is hard to determine given the unsettled nature of the entire American economy at this point. But it’s a challenge Moore is eager to take on.

“It is hard to plan much right now, but we are making plans,” he said. “It feels like we’ve gotten over the hump on these things. And what an opportune time to make some changes. Change isn’t easy in our industry, but there are times when we have to embrace it and take a good look at what we can improve.”

ASI Advocates for Rural Healthcare

ASI, the National Cattlemen’s Beef Association and the Public Lands Council called on the U.S. Department of Health and Human Services and the U.S. Department of Agriculture in mid-April to request rural healthcare providers have resources and funding to properly respond to the COVID-19 virus.

“Rural healthcare providers have unique needs unlike densely populated areas. We are calling on Secretary Alex Azar and Secretary Sonny Perdue to ensure rural healthcare providers have needed resources, particularly where the number of providers are limited across a vast geographic area, and technology to allow for expanded tele-health services amid the COVID-19 pandemic,” said NCBA CEO Colin Woodall.

“This is not business as usual for the sheep and cattle industry. Poor market conditions bring unprecedented levels of stress to farmers and ranchers. COVID-19 has exacerbated this burden through isolation and uncertainty for these industries. We must ensure farmers and ranchers do not navigate this alone by providing ample access to mental health assistance,” added ASI Executive Director Peter Orwick

“Much of rural America operates with limited numbers of healthcare providers. If doctors, nurses or administrators serving rural areas become exposed to COVID-19, it could result in loss of access to care for large regions,” said PLC Executive Director Kaitlynn Glover.

“It is essential these hospitals have resources to protect their employees and the rural communities at the front lines of this crisis.”

Lamb Outlook Studies Concerns of Unprecedented Times in 2020

Livestock economist Dr. David Anderson of Texas A&M University didn’t offer much in the way of optimism in his outlook on the American lamb market during an appearance on the ASI SheepCast in early April.

“It’s an understatement that these are not normal times, and they aren’t for lamb either,” he said in summarizing the podcast. “I expect that we’re going to be talking about continued falling prices, volatile prices and a continued muddled, uncertain situation going forward.

“I think these changes are going to continue. This volatile situation is going to go on, particularly as we see what happens with cold storage and what happens with imports and how we deal with those supplies, and how we get the whole economy kick started and going again.”

The COVID-19 crisis that consumed the United States in mid to late March led to a variety of issues for the American sheep industry. While shearing and lambing continued at the farm and ranch level, the rest of the industry was turned upside down as restaurants shuttered their dining rooms and wool prices tanked. It’s been a difficult time, to say the least, for an industry already reeling from a trade-war induced tariff battle with China.

Lamb prices, however, had been a bright spot for the industry in the early months of 2020. But shelter-in-place orders and the closing of non-essential businesses at the state and local levels led the industry’s shining star to come crashing down in spectacular fashion.

While some sales have ceased altogether, others have continued with lower numbers in all aspects.

“We’re seeing sharply lower prices than three weeks ago,” Anderson said in looking a three-market average from Colorado, South Dakota and Texas. “We had topped out on average at $240 per hundred weight, and now we’re at $210. If you looked at San Angelo this week, you’d have seen some higher prices (due to lack of competing sales). At New Holland (Penn.), sales are going on, but they aren’t reporting prices due to the virus response.”

Prices at a recent auction in Sioux Falls, S.D., were as low as $100 per hundred weight. That’s $40 to $60 per hundred weight less than they were before the COVID-19 outbreak.

“We know we’ve got retailers who have cancelled orders, are not filling new orders. We’ve got processors who have shut the doors due to a lack of orders. We’ve got packers running sharply curtailed runs simply because they don’t have orders for lambs,” Anderson said. “Yet, we’re still producing these lambs, which is driving lower prices. It’s setting us up for fears of some situations we’ve certainly seen in the past in terms of backing up lambs and heavier lambs.”

Anderson said lamb weights might be the lone piece of good news at the moment.

“We were about 67 pounds last week compared to 70 pound as a five-year average, and about 71 pounds last year,” he said. “So, our weights are still under control.”

But that might not be the case for long as lamb production decreases and lambs stack up in feedlots waiting to be processed.

“We’re down 33 percent from a year ago in lamb production,” Anderson pointed out. “And down 26 percent just in the last two weeks. That’s a sharp decline. It’s clear in the data we’re seeing that there’s been a pretty significant affect in lamb production.

“If we’re going to put all of this together, we continue to see volatile prices for live lambs at auction, but generally sharply lower lamb prices, particularly for heavy weight lambs.”

Another concern is that several lamb processors, such as Wolverine and Marcho Farms, have shut down completely during this difficult time. That leads to a lack of reporting as confidentially clauses kick in for U.S. Department of Agriculture price reporting.

Other concerns Anderson mentioned in the podcast include cold storage levels and imports. While imports were down slightly – as of USDA’s February report – cold storage is on the rise.

“The February cold storage report (the latest one available at the time of the podcast) indicated about 38 million pounds, up from 36 million the month before,” Anderson said. “But it’s well above the 32 million pounds we’ve had on the five-year average, and it’s growing. The next report will probably show increasing numbers in cold storage.”

Preparing Your Flock for Successful Gestation

CLAY ELLIOTT, PH.D.
Purina Animal Nutrition

We might be a few months off from breeding season, but now’s the perfect time to start thinking about what you can do to set ewes up for success.
Ewe health during pregnancy and at lambing is critical to overall flock profitability. Challenges such as hypocalcemia, ketosis and cervical dilation issues can all impact flock performance and your bottom line.

Here are some of my top tips to prepare your flock for a successful gestation period.

 

Tip #1: Provide year-round nutrition

Many producers start supplying ewes with mineral or high-fat supplements 30 days before breeding. But, playing catch-up a month or two before breeding can leave your ewes behind, resulting in breeding and gestation challenges.

Providing ewes with quality nutrition year-round is the best way to ensure they get the nutrients needed to reach and maintain proper body condition for breeding. Maintaining a body condition score of 3 can help lead to improved conception rates and reduced health issues during gestation.

Year-round supplementation also helps keep ewes at a more consistent body condition to avoid the up and down cycle – increasing feed before breeding, losing weight throughout gestation and starting over again during the next breeding season.

To conserve costs, look for a quality mineral formulated for low intake, so ewes get the nutrition they need while preventing them from over consuming. When ewes consume mineral at target intake levels, no mineral gets wasted.

 

Tip #2: Offer supplemental fat

When ewes don’t receive enough fat in their diet, they can lose body condition during gestation, cascading into several potential health challenges. Fat is 2.5 times more energy-dense compared to other carbohydrate sources, such as corn. Therefore, it’s more beneficial for maintaining body condition score and overall energy in the diet.

During maintenance – after lambs are weaned from the ewe and before the ewe is rebred – ewes have reduced energy needs. However, depending on forage quality and availability, you might need to supplement ewes with a high-fat protein supplement to make sure they are receiving the nutrition they need to prepare for breeding. Fat is important, not only when it comes to energy and adding body condition, but also because it’s responsible for cholesterol – a precursor for reproductive hormones.

 

Tip #3: Don’t skimp on mineral

My top piece of advice is to not skimp on mineral. It’s the one daily nutritional component that can really help keep your flock on track from a health and reproduction standpoint.

Mineral deficiencies are often overlooked because the symptoms can be slow to show or difficult to connect back to a nutrition issue. Initial signs of mineral deficiency include poor hoof health, lost body condition, unthriftiness and hair or wool loss. Long-term deficiencies can directly impact your bottom line, since your flock won’t perform to its full potential.

 

Tip #4: Get ahead on late gestational health

A ewe’s fetus grows rapidly during late gestation, causing ewe nutritional requirements and energy needs to increase. During this period, a 220-pound ewe, pregnant with a single lamb, will have a 50 percent increase in energy needs and a 71 percent increase in protein needs compared to maintenance requirements. Ewes with twins or triplets will have energy and protein requirements 25 to 41 percent greater than ewes carrying a single lamb.

Increased energy needs, including additional needs for milk production and nursing, can leave ewes deficient in the several vital nutrients. Nutrient deficiencies can result in health challenges that impact performance, such as:

• Hypocalcemia: Reduced calcium levels during late gestation.

• Cervical dilation challenges: When lambs are in the birth canal, but the cervix doesn’t dilate.

• Ketosis (or pregnancy toxemia): A lack of fat in the diet, resulting in ewe’s pulling from their body tissue for energy.

Supplementing ewes with nutrients – including calcium – can help prepare them for increased nutrient and energy needs during late gestation. Ewe size and the number of lambs will determine how much supplemental energy and nutrients are required (alongside good quality hay) to meet ewe nutritional requirements.

Prepare now to help protect your flock during gestation and lambing.

Visit PurinaMills.com/sheep-feed for more tips. Clay Elliott, Ph.D., is a small ruminant technical specialist with Purina Animal Nutrition. Contact him at CElliott@landolakes.com.

Producers Should Look Into MAL & LDP Programs

HEATHER PEARCE
ASI Wool Production & Specialty Markets Consultant

Money has been made available to wool producers through the Farm Bill in the form of Loan Deficiency Payments and Wool Marketing Assistance Loans. Producers can choose to take a payment or a loan.

To be eligible for these programs a producer must: meet the definition of an eligible producer, have ownership and beneficial interest in the wool, have ownership of the sheep at least 30 days before shearing, and the wool must be shorn and in storable condition.

ASI established the programs in the 2002 Farm Bill to address drops in market prices for wool and unshorn sheepskins, and the program paid tens of millions to producers through 2008.
The wool market at that point escalated progressively for most wools, and the marketing loan was seldom needed in recent years.

Price reporting is a crucial piece of this program. Prices need to be reported to the U.S. Department of Agriculture’s Agricultural Marketing Service by buyers, warehouses, shearers and producers to encourage prompt reporting and establish American wool prices.

To view loan rates and payments (updated each Tuesday), visit SheepUSA.org/issues-governmentprograms-woolldp.

Loan Deficiency Payments – Producers can receive a payment on their wool when global prices are lower than expected. Growers can participate in a graded or ungraded LDP program. For both programs, weight of the wool is needed. Producers with core test information can choose to use the graded or ungraded program – whichever has a higher LDP rate.

Note, an LDP is only available when the stated loan rate is above the current repayment rate. Announced weekly, the rates depend on international wool market prices and currency exchange rates.
Marketing Assistance Loans – MALs offer interim financing by providing money for continued operation while allowing the wool to be marketed later. Producers may apply for a loan for up to 12 months on graded (core test information required) or ungraded wool. USDA just extended loan terms from 9 to 12 months amid COVID-19 uncertainties.

After wool is shorn, the loan may be taken with a small initial filing fee. The wool CANNOT be sold while under loan. Any time during the 12 months, the grower may repay the loan at either the loan rate or the announced repayment rate – whichever is lower.

LDP’s on Pelts – Producers can also collect an LDP on unshorn slaughter lamb pelts. The producer must: meet the definition of an eligible producer, own the lambs for at least 30 days before slaughter, sell the unshorn lambs for immediate slaughter or slaughter the unshorn lambs for personal use, have beneficial interest in the pelts, and the pelts must be unshorn and from lambs for unshorn pelts.

Any producer who thinks he or she might want to claim an LDP in 2020 needs to have a form CCC-633 EZ on file with his or her local FSA office before selling wool or sheepskins. Whether the current market conditions provide an LDP or not, it’s important to have that form on file at the beginning of every crop year. It gives producers protection to be able to claim the LDP.

Other eligibility and documentation requirements may apply.

Obituaries

Donald Beerwinkle, 1939-2020

Dr. Donald R. Beerwinkle died on March 16, 2020, in Lubbock, Texas. He was born Oct. 7, 1939, in Bell County, Texas, to Ruben and Esther (Haas) Beerwinkle.

Don graduated from Belton High School in 1958. He went on to get his bachelor’s degree from Texas A&M University in 1962 and his master’s degree from New Mexico State University in 1963.
He married Pat Nickols in Pampa, Texas, on July 10, 1964.

Don taught at West Texas State University from 1964 until 1979, and received his doctorate from Ohio State University. From 1982 until 2010, he was a managing partner for Estacado Industries Sheep Feeding Division. Don continued to farm and ranch the last 10 years. He was preceded in death by his parents. He was also a past president of the National Lamb Feeders Association.

Don is survived by his wife, Pat; a son, Si Beerwinkle and his wife, Alison of Earth, Texas; two daughters, Shelli Beerwinkle of Hereford, Texas, and Staci Smith and her husband, Jay of San Angelo, Texas; a sister, Linda Birch of Borger, Texas; four brothers, Kenneth Beerwinkle of College Station, Texas, David Beerwinkle of Moffatt, Texas, Larry Beerwinkle of Wills Pointe, Texas, and Dale Beerwinkle of Hydro, Okla.; six grandchildren; and three great-grandchildren.

The family suggests memorials be sent to the Earth Volunteer Fire Department, PO Box 274, Earth, Texas, 79031.

 

FRED FULSTONE, 1920-2020

Fred M. Fulstone, born Aug. 27, 1920, died on April 2, 2020. He was 99.5 years old, and simply lost his long-standing battle with natural aging.

Fred was the oldest son of Fred Sr. and Dr. Mary Fulstone, and had been a lifelong resident of Smith Valley, Nev. A lifetime in agriculture and livestock introduced him to people far and wide. He spent his life walking the hills and country of western Nevada until mother nature said it was time to stop. Fred never agreed with this, but he eventually had no choice. His daughter, Marianne, came back to the ranch after graduating college to help out for a short term and she has since been there for 40-plus years working side-by-side with her father.

It was then that Fred began to enjoy life’s changes. He embraced his grandson and granddaughter returning to the ranch, and stepping into a larger role in the family business. He spoke often about his sense of pride in seeing this happen.

Fred spent his childhood years working the family ranch until graduating high school. He then attended the University of California-Berkley for two years and the University of Nevada-Reno for one year until his mom asked him to return to the ranch to help through the depression years. He did so, and met the love of his life, Irene. They were married and spent the rest of their lives together in Smith Valley.

Fred was an innovator in farming and ranching, being among the first to bring in larger farming equipment, to adapt new farming techniques and helping develop new genetic bloodlines in husbandry in the sheep industry. Fred was very proud of the Rambouillet line of sheep he helped develop. Fred was always happy to encourage people to wear wool and eat American lamb. The list of people who cut their teeth as kids working on his haying crew, and people who in some way spent time working the ranch, is long and noteworthy.

Fred was a kind, gentle and compassionate soul. He was an environmentalist long before it became fashionable and a buzzword. Fred understood the balance of nature, the value of renewable resources, and the need to utilize these resources in a responsible way, working with nature and not against it. He was a unique source for teaching generations of politicians, governmental agents and field biologists the realities of livestock as a part of nature.

Fred was preceded in death by his wife Irene, and brother Richard, and is survived by his daughter Marianne (Scott Leinassar), grandchildren Kristofor (Andrea Leinassar) and Danielle (Daniel Rausch) and four great grandchildren, Aubrey, Jeremy, Colton and Kelsey.

In lieu of flowers, donations may be made to the Smith Valley Volunteer Fire Department, 1 Hardie Lane, Smith, NV 89430.

Shave ‘Em to Save ‘Em Celebrates One Year

Wool has many desirable qualities: it is durable, biodegradable, odor-reducing, water repelling and flame resistant. Even so, America has lost 90 percent of its sheep population since sheep numbers peaked in the 1940s.

Due in part to an increase in use of cheap, petroleum-based synthetic fibers, the United States’ wool market has experienced decades of decline, chipping away at the overall sheep population and causing more than 20 once-popular sheep breeds to be added to The Livestock Conservancy’s list of endangered breeds. But threads of change are starting to appear, thanks to efforts underway to rebuild the market for American wool. Just more than a year ago, The Livestock Conservancy launched an initiative to build interest among fiber artists in those rare breed sheep’s wool.

The program, aptly named Shave ‘Em to Save ‘Em, introduces fiber artists to rare breed fiber by sponsoring a challenge to start new projects and earn items upon completion. The Conservancy had modest hopes that perhaps a few hundred fiber artists would sign up during the course of three years, hopefully bringing business to the shepherds and increasing the populations of rare sheep breeds on its Conservation Priority List.

The program quickly surpassed expectations, however, welcoming more than the total expected number of participants in just the first couple of months. To date, more than 1,700 fiber artists have joined and the initiative’s Facebook group has welcomed nearly 4,000 members. Additionally, more than 1,100 people are part of the Ravelry group – a social media site designed specifically for fiber artists.

Shepherd Kate Curren Hagel, who raises Jacob and Romeldale/CVM sheep said, “I’ve had to buy other shepherds’ yarns because my fleeces sold out before I could get them to the mill. And I have joyfully increased my breeding with a confidence that I didn’t previously feel. I can’t thank you enough.”

In addition to benefitting from increased interest in their rare sheep, the shepherds raising them have gained valuable knowledge about their customer base.

“I have learned a lot about fiber artists and the language that they speak,” said shepherd Laura Williams. “The majority of the fiber folks have been gracious, helpful and happy to share their knowledge with me.”

Williams raises the Florida Cracker (Critical) and Leicester Longwool (Threatened) breeds.

Enthusiasm is not slowing, with many artists going back to the Conservancy’s list of shepherds to find fiber from new breeds to work with.

Ravelry user LiselleVelvet shared, “I already went back for more Romeldale and put in a request for a whole Gulf Coast Native (Critical) fleece … my favorite part of the process beyond the encouragement to try different fibers is connecting directly with shepherds to make purchases directly whenever possible.”

To learn more, visit RareWool.org or the Facebook and Ravelry groups.

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