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LMIC Issues Sheep Analysis and Comments

The Livestock Marketing Information Center released Analysis and Comments on the American sheep flock this week and said two “unusual developments could factor into the lamb market calculus during the next 12 to 24 months.”

“First, the growth rate of American lamb and mutton imports might moderate significantly as the Australian flock has downsized due to drought, and China imports more-and-more of all animal-based proteins driven by the African Swine Fever epidemic inducing reductions in their pork production,” read the report. “However, in the near-term, the China story has a new dimension of uncertainty with the Novel coronavirus epicenter in Wuhan, China. Second, 2020 brings on line both opportunities and potential disruptions to the sector – the opening of a modern, federally inspected lamb packing plant in Colorado (Colorado Lamb Processors near the town of Brush).  That state-of-the-art plant is scheduled to begin harvesting animals late in the first quarter of the year, or early in the second.”

“In the face of the developments listed above, for the next two years, annual changes in the supply of American lambs are expected to be rather modest. Importantly, the two unusual developments described above, provide uncertainty regarding how much U.S. prices increase and how volatile markets are.”

However, the report concludes with some promising news.

“Overall, for the first three quarters of 2020, look for lamb prices (slaughter and feeder) to be at or above 2019. For slaughter lambs, the largest percentage year-over-year gain is expected to be in the first quarter. The second quarter might bring the biggest gain from 2019 for feeder lambs.  Note that the first quarter of 2019 had very low slaughter lamb prices compared to the balance of that year. Even though lamb supplies should remain tight during the fourth quarter, the LMIC price forecast incorporates some pressure from competing meats, especially huge pork supplies.  Still, lamb prices that quarter might be very close to 2019.”

Read the full report in the March issue of the Sheep Industry News.


ASI, Livestock Groups Oppose FSIS User Fees

The American Sheep Industry Association joined a half dozen other associations in signing on to letters to congressional leaders opposing the implementation of a user fee for government mandated food safety inspection programs for meat, poultry and egg products.

The Trump Administration’s proposed budget calls for establishing U.S. Department of Agriculture Food Safety and Inspection Service user fees beginning in fiscal year 2022. The user fees – which were proposed in previous administration budget proposals – would cost the industry $660 million annually.

“The mission of FSIS is to ensure that the nation’s commercial supply of meat, poultry and egg products is safe, wholesome and properly labeled and packaged,” read the letters. “The government food safety activities that would be financed by the industry paid user fees are mandated by statute and central to the FSIS mission. The proposal would remove any incentives for FSIS to manage program costs, develop efficiencies or improve results.”

“Congress should continue to reject proposals to assess new user fees to fund – either in whole or in part – federally mandated meat, poultry or egg product inspection. The Food Safety and Inspection Service’s inspection activities are an inherently governmental function that should be funded through appropriated funds.”


Agricultural Border Protection Bill Heads to White House

This week, the U.S. House of Representatives passed the Protecting America’s Food and Agriculture Act (S. 2107). The bill – aimed at addressing a shortage of Customs and Border Protection agricultural inspectors across the country – unanimously passed the U.S. Senate in October and now awaits the president’s signature.

The American Sheep Industry Association joined with 156 other agricultural and trade groups to support the passage of this legislation authorizing CBP to hire 240 agricultural specialists and 200 agricultural technicians each year until the workforce shortage is filled.

Protecting the safety of American agricultural production by ensuring the integrity of the safeguards in place at the country’s borders is critical to preventing the introduction of foreign animal diseases and pests. This bi-partisan bill will ensure CBP has the human resources on the frontlines to do just that.


Australian Market Loses Momentum

The Australian wool market was unable to sustain its upward trajectory, with losses felt across the entire facet of Merino types and microns. While there were 40,176 bales available to the trade, the national offering is still well down on the previous season. Compared to the corresponding sale of last year, there have been 96,438 fewer bales offered through auction – a reduction of 9.3 percent.

Melbourne opened proceedings on Tuesday with the first designated Tasmanian sale of the calendar year. More than 60 percent of the offering was Tasmanian grown and stored wool, with a large selection of 16- to 19-micron spinners/best-style wools with yields averaging more than 70 percent dry. These specialty lots were in keen demand, pushing prices higher.

These increases helped to push the Southern individual Micron Price Guides up by 2 to 11 cents for the day. As Sydney and Fremantle joined Melbourne on the second and third selling days, main buyer focus was again centered on the good/best-style wools with favorable additional measurement results. Due to the strong attention these lots received, they recorded minimal change for the series. Lesser-style wools and those with poor additional measurement results did not receive the same support, continually losing ground as the series progressed. Some lots with very high mid breaks (greater than 85) sold at levels 100 to 150 cents below similar spec lots containing mid breaks of less than 40.

The AWEX Eastern Market Indicator fell by 9 cents for the series, closing at 1,568 Australian cents. The crossbred sector was the only shining light of the series. Strong demand helped to push the 26- to 30-micron MPGs up by 15 to 56 cents.

Next week’s national offering increases slightly to 42,770 bales, with all three centers in operation. Melbourne will again sell for three days to accommodate the increased quantity.

Source: AWEX



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