To View the October 2023 Digital Issue — Click Here
Brad Boner , ASI President
As I write this column for the October issue, ram sale season is in full swing. At the Wyoming State Ram Sale, average prices were higher by about $250 per ram than they were last year with an almost $1,300 per head average. The lamb market is much improved from last year, but seems to be experiencing some seasonal softness as we move into the fall.
With fall approaching, I am reminded that it won’t be long before we are all getting together for the 2024 ASI Annual Convention in Denver. The convention will be a week earlier than normal from Jan. 10-13. An important part of the annual convention is our awards program that recognizes those who have had a positive impact on our industry. There are five awards that we hand out annually.
The McClure Silver Ram Award is dedicated to volunteer commitment and service and is presented to a sheep producer who has made substantial contributions to the sheep industry and its organizations in his/her state, region or nation. The award may recognize a lifetime of achievement or may recognize a noteworthy, shorter-term commitment and service to the industry.
The Peter Orwick Camptender Award recognizes industry contributions from a professional in a position or field related to sheep production. Nominees should show a strong commitment and a significant contribution to the sheep industry, its organizations and its producers above and beyond what is called for in his/her professional capacity. Nominees should be well respected in their fields by their peers and by sheep producers.
The Distinguished Producer Award was launched in 2014 to recognize the 150th anniversary of the national organization – the oldest livestock association in the country. This award is a way to recognize an individual who has had a significant long-term impact on the industry, including involvement with the National Wool Growers Association or American Sheep Producers Council, the predecessor organizations to ASI.
The Industry Innovation Award recognizes the accomplishments of an individual or organization that improves the American sheep industry in a game-changing way, regardless of whether its impact is felt at the regional or national level.
The Shepherd’s Voice Award for Media recognizes outstanding year-long coverage of the sheep industry by either print or broadcast outlets. The award excludes all publications and affiliates related solely to the sheep industry, allowing for recognition of outlets with general coverage for excellence in covering sheep industry issues.
Please be thinking of deserving individuals or entities for each of these awards. You can find the nomination form online at SheepUSA.org/events-awards or contact Chris at chris@sheepusa.org or 303-771-3500, ext. 107, and he can send you the nomination forms. The deadline for these nominations is Nov. 17.
As we move into a new season, I hope you all have an enjoyable fall and we all look forward to seeing each of you in Denver in January.
Until next time, keep it on the sunny side.
Across the lamb supply chain, prices are starting to be steady, and even trending higher depending on where the market is located. For producers, this is a welcome sign after more than a year of depressed and low prices.
The accumulation of a shrinking national flock and steady demand has spurred higher slaughter prices and all aspects of the supply chain are seeing positivity.
Retail/Wholesale
In the most recent retail reports, lamb activity has been extremely strong in retail stores. Each week, the U.S. Department of Agriculture’s Agricultural Marketing Service reports the activity index. The index is a measure of the absolute frequency of feature activity equal to the total number of stores for each advertised lamb/veal item (e.g., a retailer with 100 outlets featuring three lamb/veal items has an activity index of 300). Through mid-September, lamb and veal retail activity has been 3,030, which is almost 300 percent higher than a year ago. The main features and activities have centered around chops, which are around $6.99 to $7.99/lb. (shoulder chops) and $8.80/lb. (loin chops). While price per pound is below a year ago for shoulder chops ($9.90/lb.), prices for loin chops are up $0.50/lb. at $8.85/lb and have been featured a heavy amount in store.
The retail activity has given support to the national lamb cutout value. The lamb cutout represents the estimated gross value of a lamb carcass based on prices paid for individual items – primal cuts – derived from a lamb carcass. Essentially, as consumers pay for items derived from primal cuts (i.e., chops from the loin and shoulder primals) in conjunction with expected seasonal demand, retailers and foodservice entities purchase primals or boxes of specific cuts that translate into the price and value seen in the lamb cutout value. Figure one displays the 2017 to 2021 average (solid thick red line), 2022 (dotted line), and 2023 (solid thin blue line) national lamb cutout values.
Through 2023, the cutout has been above the previous five-year average, and even peaked to $456.92/cwt. in August, which was the highest price since $461.40/cwt. in late January-early February. The cutout has remained below 2022, but the gap between 2022 and 2023 is closing. There are two primals that have actually increased such that prices are above the previous five-year average and 2022 prices. Shoulder prices reached $397.76/cwt. in early September, which are the highest prices since July 2022. Similarly, leg prices reached $452.43/cwt. in late August-early September, which are the highest prices since August 2022. Given the retail activity and cutout values, it seems that demand is strong for lamb, which is providing positivity up through the supply chain.
Slaughter
Another factor that impacts prices at the wholesale level is supply. Through 2023, slaughter (figure 2) has relatively stayed on pace with 2022. The largest difference in total supply of lamb is due to the average slaughter weights being well below last year. Through 2023, average slaughter weight has been approximately 125 pounds, which is 7 pounds lower than the 2022 average. But, through the summer (July –September), the average slaughter weight has dropped to an average of 119 pounds, and hit a low of 114 pounds/head in August. The combination of relatively similar slaughter numbers compared to a year ago and smaller slaughter weights has yielded tighter supplies of total product. The smaller total supply also influences the lamb cutout value, and provides support for the increased prices seen in the cutout.
As mentioned in previous market articles, slaughter lamb prices were starting to trend upward. Through the summer, the trend held, and slaughter lamb prices reached $202.08/cwt., which is the highest slaughter lamb prices and first time above the $200/cwt. threshold since June 2022. Given the market signals from the retail and cutout values, there seems to be real reason to be bullish on slaughter lamb prices as 2023 comes to a close. Additionally, with expected tighter supply of feeder lambs, slaughter lamb prices could really ramp up moving forward.
Feeder Prices
Throughout this article, the summer of 2022 keeps popping up because of prices being the highest since then. The story is a little different in feeder lamb prices. Through the summer, feeder lamb prices in the three-market (Colorado, South Dakota and Texas) average for 60 to 90 lbs. feeders have trended upward and have reached levels of more than $200/cwt. in September, which is higher than a year ago ($152.79 to $153.38/cwt.) and above the previous five-year average ($180 to $182/cwt.).
Prices tend to pick up through the last quarter of a given year for feeders, thus with 2023 being above both the previous five-year average and last year, there is reason to also be bullish in the three-market average.
Trade
While there is positivity through the supply chain, imports are a common next question from producers. Through 2023, total lamb imports (130.3 million lbs.) have remained below the previous five-year average (133.5 million lbs.) and through the same 2022 time period (163.9 million lbs.). Given that the Australian flock is expected to increase, while the New Zealand flock is expected to decrease, the question becomes when will we see an increase in imports (if any at all)?
There are two macroeconomic factors that impact this: 1. shipping costs and 2. exchange rates. Through 2023, the global container freight rate index has trended down from $2,046.51 (January) to $1,494.46 (June). During the same time frame in 2022, the index went from $9,420 (January) to $2,119.96 (December). Thus, shipping costs have drastically decreased. Whereas, the U.S. dollar has strengthened against the Australian dollar. Given that freight costs have decreased so much and there hasn’t been an uptick, imports probably won’t pick up this year. But continued monitoring on the exchange rate is warranted not only for lamb products but also wool.
Wool
Through week 10 of the marketing year, the world wool market has had mixed signals throughout. In the early parts of the summer, the Eastern Market Indicator went from $3.39 U.S. per pound and increased week over week for three weeks to $3.60 U.S. per pound, to only then decrease back down to $3.29 U.S. per pound mid-way through August, and has been steady through week 10.
Similarly, fine wool (17 to 19 micron) increased from June through mid-July, but since then, all have steadily decreased. For example, 17-micron wool went from $5.6348 U.S. per pound on June 30, up to $5.7388 U.S. per pound on July 14, then decreased down to $5.0015 U.S. per pound through Sept. 8. In the crossbred wools, the story has been opposite. For example, 28-micron wool was $0.93108 U.S. per pound on June 30 and increased steadily up to $1.0116 U.S. per pound on Sept. 8.
The contrasting trends between fine wool and crossbred wools leave the wool market with mixed signals. The reason for these contrasting trends could be due to the uncertainty of China’s economy. If there was to be a true financial crisis in the coming months, one could expect for the wool market – along with other markets – to trend down and become extremely bearish. If China doesn’t have a financial crisis – like its government has suggested – then questions about where will demand come from (Europe) becomes the key driver.
Summary
For American producers, the continuation of higher prices throughout the lamb supply chain is a welcome sign. The inputs have been high for extended periods of time throughout the last year due to drought and other factors. With low import numbers and tighter supplies, prices seem to really have some longevity on the positive side for producers, which hopefully turns into increased profit margins for producers, as well.
Sheep Genetics USA brought 15 young producers, researchers, university staff and industry personnel to Colorado State University for two days of brainstorming on industry issues and possible solutions in late August as the group considers topics it should attempt to tackle in the months and years to come.
The Sheep Genetics Research Summit in Fort Collins, Colo., was moderated by veteran cattle producer Lee Leachman – who was featured in the August issue of the Sheep Industry News for genetic work in his industry. The two-day session generated seven priorities that the group is passing along to the Sheep Genetics USA Board of Directors. Chief among them is how genetic data is entered into the National Sheep Improvement Program and developing a software platform to streamline the entering and analysis of that data.
“There’s a lot of software investigation in the industry right now among the sectors and the breed associations,” said Superior Farms Director of Producer Resources Karissa Isaacs, who recently joined the board of SGUSA. “We just need to come together on those and be collaborative. One, to bring the cost down, and two, so that everyone is on the same platform for ease of data transfer and usage.”
Additional goals included finding ways to streamline the collection of genetic data – which is essential to allow for implementation among large commercial operations – and the addition of paid staff to achieve strategic goals in the next two years.
“One of main topics was how to move sheep genetics in all breeds forward in a progressive manner,” said Isaac Matchett, a commercial producer from Michigan. “I agree with data being a priority. Most would agree that there’s value in data and in being able to understand what parts of your enterprise make money and what parts don’t. Collection of that data hasn’t been adopted widely within the industry because it’s cumbersome to collect. It takes time at the farm level to collect, so we discussed a lot of avenues to make that a more streamlined process, to improve the technology that is available and the software we have available to get that data from raw data points to a utilizable management tool.”
Matchett said he was somewhat familiar with the initial work of Sheep Genetics USA – which began back in 2021 – and was excited to be invited to the summit in Fort Collins.
“Genetic progress is a limitation to sheep producers everywhere,” he said. “If we can expedite the genetic progress we make in all of these breeds, that’s a huge benefit to a commercial producer and a huge benefit to our production potential. I think it’s good to be a part of that conversation.”
Andrew Weaver, Ph.D., of North Carolina State University was the lone representative from the hair sheep side of the industry, but felt like many of the problems (and solutions) discussed applied to the industry as a whole.
“The traits we’re interested in and the tools we want to develop are going to go across all breeds,” he said. “Katahdins have set an example for the industry having genomics for a couple of years now. They’ve got their foot in the door there, and can be leaders for the other breeds.”
Suffolk producer Gavin Blonquist works with a breed that has also led the way in genetic research and on the technology side with the Digital Suffolk program. As a seedstock producer, he understands the work required to move the industry forward.
“Nearly every lamb we weaned this year, the genomic testing is already done,” he said. “That’s sort of expected from the seedstock producers. When the average producer starts looking at all of this, it’s pretty intimidating to see all of the data you need to collect and submit. The extra work it takes to collect that data is a pretty big task for most producers. And it doesn’t always mean an immediate increase in the dollars you’ll get out of your sheep. But down the road, that information is going to be pretty valuable to the producers and the industry.”
Participants in the summit included:
• Sheep Producers: Gavin Blonquist (Utah), Ryan Boner (Wyo.), Kyle Hurley (Iowa), Cameron Krebs (Ore.), Isaac Matchett (Mich.) and Shane Mickel (Utah).
• University and Extension Personnel: Brady Campbell (Ohio), Kelly Froehlich (S.D.), Ryan Knuth (Minn.), Chad Page (Ariz.), Christian Posbergh (Mont.) and Andrew Weaver (N.C.).
• Sheep Genetics USA Board Members: Rusty Burgett (Iowa) and Karissa Isaacs (Colo.).
• Agricultural Research Service: Tom Murphy (Neb.).
Michigan’s Great Lakes Lamb recently became the third domestic sheep operation – and first from East of the Mississippi River – to reach Level III: Certified status through ASI’s American Wool Assurance program.
“I learned about the AWA program at the 2022 ASI Annual Convention,” said Elaine Palm, who operates Great Lakes Lamb with her husband, Rick, and parents, Jim and Sherrie Bristol. “We didn’t really have to make any changes to what we do on a daily basis, getting certified just helped us put some language behind what we do and why we do it.”
Palm said researching the program and then starting the certification process was one way in which she could contribute to the family operation during her pregnancy in 2022. She tackled AWA Level I: Educated by completing two online courses in half a day, then set about working on the farm’s operating plan in the summer of 2022 as part of Level II: Process Verified.
Reaching Level II certification required an independent evaluation, which was done by an ASI-trained evaluator. AWA evaluators are located throughout the United States and are often university or extension personnel who understand the daily workings of a livestock operation.
“We used a person who we were familiar with through the Michigan Sheep Producers Association, so the process was very comfortable,” Palm said.
Level III certification requires a third-party audit using CloverLeaf Animal Welfare Systems, who was selected by ASI as the official auditor of the AWA program.
“It was really easy to get that scheduled,” Palm said, “and the process of the audit was really smooth and conversational. I’m glad we went through the whole process and got certified. Now, we’ll just have to see where it goes from here and how the program evolves.”
Palm said she was hoping the certification would provide two benefits: a premium for the family’s wool and the opening of additional markets that aren’t available to non-certified producers.
“I’d definitely like to get a list of buyers who are looking for certified wool,” she said.
ASI Wool Production Programs Manager Heather Pearce is working with producers in the AWA program and can answer any questions about the process. Contact her at heather@sheepusa.org or visit AmericanWoolAssurance.org for more information.
The AWA program is centered around the international standard of the five freedoms: freedom from hunger and thirst; freedom from discomfort; freedom from pain, injury or disease; freedom from fear and distress; and freedom to express normal behavior. Additionally, accountability programs preserve the reputation of wool, the growers and the retailers, and encourage better communication between growers, shearers, wool buyers and customers. Better recordkeeping required by such programs can increase profitability, and increased dialogue between growers and consumers helps to educate consumers and keep agriculture thriving.
PEN OF THREE
PRODUCER EDUCATION
ADDITIONAL EVENTS
In the same barn where ewes bonded with their new lambs, the festival offered a Hall of Breeds. A dozen different breeds were on display throughout the weekend. And the area provided the uninitiated an opportunity to milk sheep, as well. Just down the way, a variety of antique shearing equipment sat on display and shearing demonstrations took place throughout the day thanks to Huber’s Sheep Shearing.
Purina Animal Nutrition is excited to announce two new leading-edge nutrition products designed to address the top challenges of sheep and goat producers today – Purina Accuration Sheep & Goat R+R Block and Purina RestEZ Sheep Balancer.
Purina Accuration Sheep & Goat R+R Block is a unique, weather-resistant vitamin and mineral supplement designed to support animals during the high stress of reproductive and receiving transitions. It contains 12 percent protein, 5 percent fat, a high-quality mineral pack with bioavailable zinc and manganese for reproductive health, as well as three different heat abatement technologies.
“High protein levels can negatively impact pregnancy and conception rates in ewes and does,” says Elliott. “That’s why we worked to decrease the protein level in this block while still providing the needed amount of fat to help support reproduction.”
Whether you’re using artificial insemination, embryo transfer or natural service, the block is recommended to be fed from 60 days before breeding through the end of the second trimester. The product is also recommended for feedlots to help get newly weaned lambs or kids on feed faster.
The popularity of balancer products continues to grow as producers look to reduce the nutritional gap when feeding commodity blends. After launching the Purina RestEZ Sheep & Goat Supplement last year, Purina responded to customer requests and included this new technology in an existing balancer product. The Purina Sheep Balancer many producers have come to trust now includes RestEZ technology, formulated to support immune and digestive health in many environmental conditions, including dirt and dust, close quarters and extreme heat or cold.
Learn more about these two great new products at
PurinaMills.com.
Longtime members Pierce Miller and Dave Johnson stepped down earlier this year from the board of the National Livestock Producers Association’s Sheep and Goat Innovation Fund.
Miller – a past president of ASI – had served the fund since its inception. Johnson had served nearly as long. Their departure will leave a void that will be difficult to fill said NLPA’s Scott Stuart.
“Both Pierce and Dave will be greatly missed as members of the fund’s lending committee,” he said. “Their integrity, knowledge and experience are second to none, and NLPA and their fellow committee members are all the better for it.”
Miller said he had planned for awhile to resign during the fund’s meeting in Idaho Falls, Idaho, back in August. But he was completely caught off guard when Johnson joined him in stepping down during the meeting.
“It was just time for me,” Miller said. “And I think Dave felt the same way for himself.”
The fund provides loans to the industry at a competitive rate – which is currently less than the prime rate of 8.5 percent.
“With our rate lower than the prime rate, I think we always hoped we’d have even more loans outstanding,” Miller said. “The fund has provided an invaluable resource, and I’d like to see even more people in the industry take advantage of the opportunity the fund can provide.”
Miller’s resignation means the fund will forge ahead without him for the first time in its history.
“The NLPA Sheep and Goat Innovation Fund would not exist today without the vision and work done by Pierce Miller to help create it as a lending intermediary,” Stuart said. “Pierce served on the fund’s lending committee for 23 years and, most recently, as chairman of the committee for the past two years. Pierce’s experience in sheep and goat production, as well as his financial savvy helped the fund to revolve over $54 million into the industry since its creation.”
Johnson played a crucial role in the fund’s success, as well. Like Miller, he was in the room when the fund was first created.
“Dave Johnson’s passion for the sheep industry helped the fund to assist smaller producers and younger producers to grow their businesses,” Stuart said. “Dave’s experience as a producer, processor and marketer in the sheep industry during his 18-year career has brought a unique perspective to the fund’s lending committee.”
Johnson said travel has been more difficult in recent years and he’s stepping down to spend more time at home.
“It’s been a really satisfying position, working with a great, small group of individuals,” Johnson said. “We had a pretty good budget to make things happen, and I felt like we did a lot of good for the industry. It’s been a real pleasure, and I gave it all I could for as long as I could.”
Johnson went out in style. Traveling home from the summer meeting, he was stranded in Idaho for the better part of a day and had to run through the Denver airport to catch his connecting flight to Wisconsin. But his efforts were rewarded with an unexpected seat in first class for the second leg of the trip.
“That was probably my last official business trip, and I ended up in first class for the first time in my life,” he said.
Visit SheepandGoatFund.com to learn more about NLPA’s Sheep and Goat Innovation Fund.