Sheep Industry News April 2023

Market Report

CHARLES MARTINEZ, PH.D. University of Tennessee

Lamb Market Sees Positive Signals

A s we start to close out the first quarter of the year, there have been some positive signals in the marketplace. Usually, we see a ramp up in slaughter numbers this time of the year in anticipation of the spring holidays before the summer lull, and this year is no exception as we are seeing higher slaughter numbers compared to a year ago. The transmission of positive prices has been seen in various markets. Below are some highlights in the market. RETAIL AND CUTOUT VALUES Retail featuring of lamb products is lower thus far compared to last year, but is expected to increase in the coming week as Easter nears. While featuring is down, consumption is holding steady as prices at the meat case are above last year’s prices. Loin and shoulder blade chop prices are higher than a year ago. Currently, the net lamb carcass cutout value has trended down from $473 per cwt. in January to $447 per cwt. in mid-March. While cutout values have remained approximately $145 per cwt. continuously below last year’s value, the current cutout is still a solid $109 per cwt. higher than the previous five-year average. The two primal cuts that are currently trending positively for the cutout are racks and shoulders, which are approximately $1,153.38 per cwt. and $354.73 per cwt., respectively, mid-way through March. Both of these prices are trending upward and are trading at the highest prices since the fall of 2022. This positive sign is partly driven by steady consumption, but also tighter sup

plies compared to historical slaughter numbers.

SLAUGHTER NUMBERS AND PRICES The positive sided lamb cutout values have been met with higher slaughter numbers compared to a year ago. January slaughter was 2,600 head above January 2022 at approximately 34,357 head. While slaughter was up compared to 2022, volume is still 2,700 below the previous five-year trend. So far this year, weekly slaughter numbers are about 8 percent higher as of mid March. While numbers are up compared to last year, the average dressed weight per head is not. The dressed weight of the January slaughter total was 64 pounds, which is 2 pounds lower than last year and 6 pounds lower than the previous five-year average. Based on weekly data, weights have continued to average lower through mid-March. As indicated in last month’s article, production and supplies are expected to be comparable to last year, which also indicates the continuation of lower slaughter numbers compared to the historical trends. This could potentially help maintain the cutout value above the historical trends, as well. Slaughter lamb prices have really started to rally the last few weeks. The first few weeks of March had a National negotiated live sale price average of $136.58 per cwt. This marks the first continuous weeks of prices above $135 per cwt. since last sum mer. Within these sales, the current range has a low of $123 per cwt. and a high of $215 per cwt. The Sioux Falls, S.D., market also has a positive trend in prices with slaughter lamb prices av eraging $136.55 per cwt. the first few weeks of March – also the highest since summer of last year. FEEDER LAMB PRICES The positive trend in the slaughter lamb prices is also start ing to occur in the feeder lamb prices. The weekly three-market average of Colorado, Texas and South Dakota feeder lamb prices began the year at $214 per cwt. and dropped to $172 per cwt. in January. Since then, the weekly prices have continued to increase each week, and had reached $185 per cwt. mid-way through March. While these prices are below last year’s prices, the market is trending to be on par with the previous five-year average of $204 per cwt. during the same time of the year. In other segments of the feeder market, there is also positivity. Haired sheep in the Columbia, Tenn., market are averaging $312

6 • Sheep Industry News • sheepusa.org