Industry Report Provides 2021 Assessment
The sheep and lamb industry saw prices reach historic levels in 2021. The year of outstanding domestic demand for lamb is summarized in the 2021 Sheep Industry Review – a checkoff funded report commissioned by the American Lamb Board and compiled by the American Sheep Industry Association.
“The pandemic continued to bring uncertainty during 2021, which drove shifts in consumer food consumption and buying patterns,” said ALB Chairman Peter Camino of Buffalo, Wyo. “Per capita lamb consumption was 1.36 pounds per person for 2021 – the highest level since the early 1990s. Gains in lamb consumption have been linked to the year-round availability of more lamb cuts in supermarkets and direct sales as a result of the pandemic.”
Various factors on the supply side supported higher lamb prices. Persistent drought, higher feed costs and other production constraints – as well as strong slaughter ewe prices – resulted in significantly large mature sheep slaughter in 2021. The continuing downward trend in the American sheep flock has resulted in a smaller lamb crop and lamb supply. Additionally, cold storage inventories in 2021 were below year ago levels, which provided further support to lamb prices.
Although economic uncertainty continued in 2021 – with focus on price inflation and consumer response to higher prices for meat and other goods – the feeder and slaughter lamb prices saw gains of more than 40 percent in 2021. The wholesale lamb market also saw record highs in response to strong consumer demand and tighter available supplies.
Sheep and lamb inventory continued a declining trend, down 2 percent to 5.065 million head. Breeding sheep inventory registered at 3.71 million head, also down 2 percent from the previous year. Replacement prices posted large gains during the latter half of 2021, similar to live lamb and wholesale lamb price trends. Ewe prices all set new record levels in 2021.
Texas held onto the top position with 430,000 ewes. California and New Mexico each had the largest ewe increases – both at 8 percent – but with a significant difference in total ewes: California’s inventory is five times the amount of New Mexico’s ewe inventory.
Commercial slaughter was up slightly in 2021 to 2.25 million head. Tighter supplies of feeder lambs were evidenced in lower on-feed numbers during spring and summer months with inventories climbing into the fall. Compared to the 2015-2019 average, on-feed supplies averaged 7 percent lower.
As the sheep flock has continued to decline, so has lamb production. Commercial lamb production was down only 0.5 percent for the year, but was 8 percent lower than the 2015-2019 average. This lower production is attributed to smaller lamb supply and lighter weights.
Feeder lamb (60-90 lbs.) prices in 2021 were above previous year levels every week except the first week of March. In fact, the industry saw a new record high posted at $271.27 per cwt. This equates to 2021 prices that were 45 percent higher than the 2015-2019 average price. These stronger prices were due to tighter lamb supplies, strong consumer demand for lamb and growth in ethnic, local and niche market demand.
Slaughter lamb prices also set records, coming in 44.8 percent higher than 2020 and averaging $217.25 per cwt. The record high was set in early August. This brings 2021 prices 46 percent higher than the 2015-2019 average.
Wholesale lamb values reached record levels during the second half of 2021. The robust wholesale market was supported by strong consumer demand, supply constraints in the meat and poultry complex and year-round availability of more lamb cuts in supermarkets. Based on retail data collected by 210 Analytics LLC across fresh and processed meat, lamb was the only one to grow pound sales year-on-year in 2020. Lamb also had the highest growth in pound sales when compared to the 2019 pre-pandemic normal.
Strong American lamb prices and tight domestic supplies provided an attractive market for lamb imports. In fact, lamb imports were 264.2 million pounds in 2021 – up 23.7 percent.
Mutton imports have surged in the last few years and were up 13.5 percent to 99.8 million pounds in 2021. Australia was the lead country for lamb imports, contributing 195.6 million pounds at an increase of 20.7 percent in 2021. New Zealand also contributed to lamb import totals at 32.9 percent above 2020 and 64.4 million pounds. Overall, imports responded to record high U.S. wholesale lamb prices during the latter half of 2021.
Exports for lamb and mutton totaled 3.48 million pounds – 7.6 percent higher than in 2021. Growth in the export sector was driven primarily by lamb variety meat exports to Mexico. Lamb muscle cut exports rallied to the Caribbean in 2021, with notable growth in the Dominican Republic and gains to Bermuda, the Bahamas, Trinidad and Tobago, and Turks and Caicos. Lamb exports as a percent of lamb and mutton production were 2.4 percent, slightly higher than in 2020, but lower than the 2015-2019 average of 3.7 percent.
Live sheep exports increased in 2021 driven by exports to Canada, which accounted for 74 percent of all live sheep exports. Live exports to Mexico have been in decline in recent years.
Looking at 2022, the 2021 Sheep Industry Review report estimates commercial production to decline 4 percent and commercial slaughter of American lamb to decrease by about 3 percent. Likewise, imports are expected to fall 3 percent to 352 million pounds. Total lamb availability is expected to contract by 5 percent, with a decline in per capita availability due to the decline in production relative to the U.S. population. In 2022, feeder lamb prices are expected to average 10 percent higher and slaughter lamb prices to average 5 percent higher.
Production costs for all segments of the industry are expected to remain high in 2022, making getting lamb to the consumer more costly than prior years. Feed costs are expected to remain high due to drought conditions and strained hay stocks. Tighter lamb supply suggests high live lamb and meat prices will continue in 2022. Inflationary pressure and lower disposable incomes are expected to impact consumer demand and purchasing behavior in 2022. Supply chain constraints and labor challenges are likely to continue during 2022.
Click Here for the full report.
Apply Now for Sheep Heritage Foundation Scholarship
A $3,000 college scholarship is available once again this year for graduate students from the American Sheep Industry Association’s Sheep Heritage Foundation.
Students should be working in an area of study that will lead to the advancement of the American sheep industry. Students pursing either a master’s degree or a doctorate at a university in the United States are eligible to apply. Application requirements include a complete application form and two letters of reference.
Click Here for the scholarship application.
House and Senate Pass Omnibus Appropriations with ASI Priorities
This week, both the U.S. House of Representatives and the Senate passed the compromise omnibus agreement to fund the government through the reminder of the fiscal year. The bill contained key priorities for the American sheep industry including support for the U.S. Sheep Experiment Station and Wildlife Services.
For the USSES in Dubois, Idaho, the bill contained $4.2 million for improvements to the buildings and facilities, as well as an additional $500,000 in rangeland research funding. The bill also provided additional funding for Wildlife Services, providing $116 million for Wildlife Damage Management and $23 million for Methods Development.
The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service Equine, Cervid and Small Ruminant Health line item – covering the scrapie surveillance program – was increased to $32 million.
Additionally, the bill continued the prohibition on enforcing the Electronic Logging Device mandate for livestock haulers. Finally, it extends the Livestock Mandatory Reporting Act of 1999 until Sept. 30.
Australian Market Off Slightly This week
The Australian wool market recorded an overall loss this series, although there were some price increases in selective pockets with certain types across the three regions recording positive movements.
In the Merino fleece types, the movements in the Micron Price Guides across the country ranged between +14 cents (on the 18 micron MPG in Fremantle, bringing it more in line with the other centers) and -50 cents (on the 17 micron MPG in Melbourne, bringing it more in line with Sydney). The skirting market was the strongest performing sector for the week. Overall, these types were generally fully firm to 15 cents dearer, with the exception of wool carrying more than 5 percent vegetable matter, which eased slightly.
The crossbreds recorded minimal change as the MPGs for 26 to 30 micron ranged between -2 and +3 cents. By the end of the series, the various market movements had the net result of pushing the AWEX Eastern Market indicator lower. The EMI dropped by 14 cents, closing the week at 1,407 Australian cents. Due to currency movements – the Australian Dollar was 1.1 cents higher than in the previous series – when viewed in U.S. dollar terms the market had an overall positive movement. The EMI added 5 U.S. cents for the series, closing at 1,026 cents.
Although the EMI has fallen away from its highest point of the 2022 calendar year – it reached 1,449 cents in Week 31 – the EMI is still trading 49 cents higher than its opening level of the year and 97 cents above its level of the corresponding sale of the previous season. Next week’s national offering remains relatively large, with 2,342 more bales rostered than this week as 52,546 bales are currently expected to be offered nationally. Sale days will be Wednesday and Thursday due to a Monday public holiday in the Western region.
YQCA Transitioning to New Platform
The Youth for Quality Care of Animals program will be transitioning to a new platform that will launch on March 23. YQCA’s certification program has partnered with the American Sheep Industry Association and other livestock industry groups to offer top-of-the-line training in food safety, humane animal care and life skill development for young people.
“There are several important things for you to know and do in preparation for this transition,” read a release from the organization. “YQCA has been trying to obtain data from our current technology partner that would allow us to transfer information from one platform to the other without recreating accounts, trainings, etc. To date we’ve been unable to access this data and cannot guarantee we will receive this data prior to March 23. We recognize this is a busy time of year and not ideal to add these new steps, but it’s necessary given the lack of data we’ve currently received. Please review the action items below and reach out if questions arise.”
YQCA participants should:
- Download your current and valid YQCA certificate on or before March 22.
- If you are currently registered for a YQCA web-based training, be sure to complete this training on or before March 22 and download your current and valid YQCA certificate.
- If you are currently registered for a YQCA instructor-led training that will be completed on or before March 22, complete the training as planned and download your current and valid YQCA certificate.
- If you are currently registered for a YQCA instructor-led training that is scheduled for March 23 or after, cancel that registration so you can receive a refund to your credit/debit card and/or re-activate the coupon used for payment.
- As early as March 23, create a new account at org. A help sheet will be released on March 23 detailing the steps to create accounts, purchase courses, download certificates, etc.
YQCA will be hosting a webinar on Tuesday, March 15, for instructors, parents and youth to learn more about the YQCA site and get their questions answered.
Click Here to register for the webinar.
Livestock Associations Seek Answers on Conservation Plan
The American Sheep Industry Association joined the National Cattlemen’s Beef Association and the Public Lands Council recently in filing comments with the U.S. Department of the Interior concerning the Biden Administration’s plan to Develop the American Conservation and Stewardship Atlas.
In comments filed with Interior Sec. Debra Haaland, the groups called on the administration to answer a series of questions about how the administration’s plan to conserve 30 percent of America’s land and waters by 2030 will affect farmers and ranchers across the United States.
“The livestock associations appreciate the BLM and USFS’s recognition that grazing is conservation and urge the Atlas to clearly include grazed lands – both federal and private – as conserved,” read the letter’s conclusion. “At its core, livestock grazing often represents the last bastion of protection for the American landscape, the acres most often considered as our national gems. These lands are those cultivated by the farmer, ranchers, fishers and forest owners. These individuals, and the ongoing investments they make as part of their larger management strategies, must be encouraged to lead this effort.”
Ag Coalition Seeks Labor Peace at West Coast Ports
The American Sheep Industry Association recently joined a coalition of agriculture organizations – the Agricultural Transportation Working Group – in calling on President Joe Biden’s administration to take an active role in “ensuring the upcoming contract negotiations for West Coast ports don’t result in any labor disruptions.”
“As the largest entry point for imported and exported cargo in the United States, West Coast ports play an enormous role in the supply chain we rely upon to operate our businesses,” read the coalition’s letter to President Biden. “They are the single most important link in the chain, accounting for more than 9 percent of the nation’s GDP – moving trillions of dollars’ worth of goods that support millions of jobs, businesses, hospitals and other organizations in every community throughout the country.
“The agricultural community has been particularly susceptible to supply chain congestion, due in large part to the simple fact that our products have a finite shelf life. America’s farmers, ranchers, growers and the entire agricultural sector depends heavily on smooth operation at these ports to sustain our global markets. As we look to the remainder of 2022, we are closely following developments at the West Coast ports and we are encouraged by the progress toward relieving congestion.
“But we see potential new challenges ahead. Our single most important concern is the upcoming contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association. This contract covers all West Coast ports that we rely upon for our livelihoods. The current contract expires on July 1, 2022, and history shows that some past negotiations were fraught with conflict and widespread disruptions.
“We are writing to appeal to you to use the power of your office to urge the parties to begin negotiations as soon as possible, with the goal of reaching an agreement without any disruption at West Coast ports. We are not suggesting taking a position on the contract issues the two sides will negotiate. But keeping them at the table without disruption is a national imperative.
“Given the continuing and well-chronicled fragility of the U.S. supply chain, any disruption at West Coast ports would be debilitating to the national economy and to America’s farmers, ranchers, co-ops and agribusinesses. Any slowdown or disruption now, just as we are starting to recover, would be catastrophic to the entire agriculture economy.”
- PRODUCER EDUCATION