Sheep Industry News August 2021

FORECASTS In late June, LMIC reported that the forecast for 2021 is 2 percent lower production, 10 percent lower imports and a lamb and mutton disappearance contraction of 10 percent. LMIC estimated that third quarter slaughter lamb prices could see $180 to $185 per cwt., 34 percent higher year-on-year. Feeder lamb prices, 60 to 90-lb., could see $240 to $245 per cwt., up 44 percent from a year ago. Slaughter lamb prices could dip below current $200 per cwt. levels if sizable imports are reported during the summer and the largest processors are able to secure supplies for the fall. WOOL CONTINUES ITS COVID-19 REBOUND Australian wool prices have rebounded sharply since the COVID low during the fall of 2020, and by early July remained about 32 percent lower than the 2018 high in Australian dollars and 28 percent lower in U.S. dollars. The Australian Eastern Market Indicator aver aged Australian $6.44 per lb. clean, or U.S. $4.81 per lb. clean on July 9. While finer wools have enjoyed a distinct upward trend in 2021, coarser wools have seen some ups and down, but remained generally flat. Recall that wool is a niche product, catering to a hyper-targeted consumer. Australian Wool Innovation reported at the end of May that in the United States, “there are signs that quality Italian wool apparel, such as women’s coats and next to skin items like base layer and fine Merino knitwear, has remained resilient throughout the pandemic. There is renewed optimism from the Italian mills for wool orders being secured for the impending 2021 Autumn-Winter season.” Similar to the pelt market, international shipping remains a concern in wool export trade. Shipping costs are higher, access to ships more challenging, and delivery and off-loading dates are delayed. Lack of timely payment to wool buyers means less money to spend on the next wool purchase. At some point – if not already – increased shipping costs will be deducted from raw wool price offers. Some substitution to coarser wools might prevail, giving lower-end fibers a lift.

of 2019. Estimated production is lower due to lower harvest numbers, but also lower harvest weights. Between the first-half of 2019 and the first-half of 2021, average har vest weights dropped 5 percent from 137 to 130 lbs. The difference is statistically significant at 5 percent. Lighter weights at harvest might be due to tight supplies, but also due to expanded demand by the ethnic market that prefers a lighter-weight carcass. Freezer inventories continued to contract in June, to low levels not seen since early 2017. Lamb and mutton in cold storage fell for the third consecutive month in June to 21.9 million lbs., down 12 percent monthly and down 54 percent from a year ago. Lamb imports fell 4 percent in January to May year-on-year to 91.8 million lbs. Australian imports were down 10 percent to 65.3 million lbs. and New Zealand lamb was down 13 percent year-on-year. According to the Australian Weekly Times on July 5, Australian lamb exports to the United States posted a 19 percent gain on volumes from May to June – the largest monthly volume of Aussie lamb exports to the United States on record. Thomas Elder Markets Analyst Matt Dalgleish commented in the Weekly Times that increased Australian lamb exports to the United States are due to the strong rebound of the high-end foodservice trade from COVID-19. edented drought conditions. By the end of June, 22 percent of the U.S. was categorized as extreme to exceptional drought, with another 35 percent labeled abnormally dry to severe drought, according to the U.S. Drought Monitor. The Livestock Marketing Information Center reported that as of July 1, 65 percent of Western pastures were rated poor and very poor, 26 percent were fair, and only 9 percent were good/excellent. In mid-June, the California Farm Bureau Federation documented how some sheep producers are facing tough decisions in finding feed. Some producers are culling mature ewes, some lambs are being sold as feeders (for finishing in a feedlot) or being sold to others with ir rigated pastures. However, national harvest numbers and strong live prices support the notion that sheep producers are finding ways to manage (for now). Dan Macon, University of California Cooperative Extension livestock and natural resources advisor, said he's trying to main tain his breeding flock numbers – at least for this year. The big unknown, he said, is what feed conditions will be in the fall, noting that lack of available irrigation water will mean more fallowing of alfalfa fields, reducing the amount of post-harvest stubble on which sheep can graze in October and November. Crippling the industry’s ability to slow lamb growth on deserts and California’s Imperial Valley through the fall and winter could hamper 2022 Easter supplies. Lamb prices are high, which helps ease the pain if a producer is forced to sell due to lack of feed, but in turn, high lamb prices don’t encourage flock rebuilding if there is a lack of feed. DRY CONDITIONS THREATEN FALL FEED SUPPLIES This summer, most of the Western United States faces unprec

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