Sheep Industry News August 2024

Market Report

DAVID ANDERSON, PH.D. Texas A&M AgriLife Extension Service

Production and Total Supplies Ahead of Last Year

N ow that July is here, it’s time for a little mid-year review. One of the interesting events in the market this year is that sheep and lamb slaughter and meat production are larger than a year ago and prices – for the most part – have been higher than last year. That’s typically hard to pull off unless there is some positive news on the consumption and demand side of the equation. TOTAL SUPPLIES The data on sheep and lambs going to meat packers is divided into two categories: the first is mature sheep, and the second is lambs and yearlings. Through the first week of July, slaughter is running ahead of last year in both categories. Lamb and yearling slaughter is up 3 percent compared to last year. Lamb dressed weights have averaged 62.6 pounds so far this year compared to 64.4 pounds last year. The combination of more slaughter and lighter dressed weights leaves total lamb and yearling production 0.2 percent ahead of last year – almost even. While lamb and yearling slaughter is perhaps more important for current lamb meat supplies, mature sheep slaughter might have some longer-term implications. So far this year, mature sheep slaughter is up 12.1 percent during the same period. Given that the ewe flock in the U.S. Department of Agricul ture’s Jan. 1 inventory report was 2 percent lower than the previ ous year, this rate of slaughter suggests reduced domestic produc

tion in the future. The remaining major part of total supplies are imports. Lamb imports are up 35.5 percent compared to last year. Imports from both Australia and New Zealand are up more than 30 percent. First quarter imports totaled 71.1 million pounds and were the largest first quarter import volume on record. Mutton imports are 7 percent lower than last year. Total supplies on the market include lamb and mutton in cold storage. Pounds in storage have been creeping higher this year. In May – the latest data – lamb and mutton in cold storage totaled 23.4 million pounds, up from 19.9 million pounds in January. But the storage in May remains less than last year’s 25.1 million pounds. Put all these supplies from different sources – domestic and international – together and there has been about 5 percent more lamb and mutton on the market this year than last year. for most of 2024. In the face of larger supplies, the resilience of lamb prices has been surprisingly good. Lambs weighing 60 to 90 pounds (an average of Colorado, South Dakota and Texas markets) and headed for a meat packer averaged about $220 per cwt. in the first week of July compared to about $180 per cwt. last year. They peaked back in April at about $280 per cwt. The decline since April has been largely seasonal as lamb prices normally decline from spring to summer. Lambs of the same weight and representing the same mar kets but designated for feedlots have remained above a year ago, as well, reflecting some past positive returns to feeding with lower corn prices. Heavyweight slaughter lambs reported from Sioux Falls, S.D., indicate that prices have fallen seasonally down to $215 per cwt., slightly above last year’s $207 per cwt. in early July. Lambs in that market experienced a strong counter-seasonal price move last year leading to the highest prices in 2023 during the summer. So, when comparing to last year, it would not be surprising for prices later this summer to be below last year. On the wholesale meat side, prices for the cutout and most PRICES Lamb prices have been largely running ahead of last year

6 • Sheep Industry News • sheepusa.org