Sheep Industry News December 2021

Market Report

JULIE STEPANEK SHIFLETT, PH.D. Juniper Economic Consulting

Industry Well Positioned For December Holidays

T his holiday season, there will likely be continued strong demand at retail with more consumers buying a greater range of cuts and stronger demand for high-end meat items such as prime rib, ribeyes, pork roast, seafood and lamb, according to 210 Analytics in early November. Anne-Marie Roerink, president of 210 Analytics, reported in The Food Institute that rising supply constraints and rising input prices might put at risk the supply of turkeys, ham or rack of lamb. Roerink added that the proteins are feeling the effects of COVID-19, labor shortages, transportation issues, lack of packing materials and higher feed costs. As winter approaches, the lamb industry is revealing contin ued tight supplies in higher slaughter lamb and meat prices, but signs of a new normal are emerging as feedlot inventories build, live weights gain at harvest, and weekly harvest begins to increase seasonally. ASI Executive Director Peter Orwick explained in AgWeek in early November that the “lamb market is on fire” and that due to a COVID-prompted demand expansion, “people are going further and further into the meat case, with people giving lamb a try for the first time, and those that have tried it, coming back."

DOMESTIC PRODUCTION DOWN; IMPORTS UP Domestic lamb production has contracted this year while imports have expanded. In the first 42 weeks of the year, estimated federally inspected lamb harvest was 1.46 million head, up 0.2 percent year-on-year. Estimated lamb production was 67.41 mil lion lbs., down 3 percent from the same period last year due to lighter harvest weights. The industry appears to be in a good position to fulfill its holi day orders this year. Late October saw an uptick in weekly harvest numbers as the industry gears up for the December holidays and Easter 2022. Colorado feedlots gained volume in October to a four-year high in preparation for the December holidays and Eas ter. In October, Colorado feedlots reported 270,104 head, a 4 percent gain monthly and 19 percent higher year-on-year. Estimated mature sheep harvest was 116,864 head in 2021 through October, up 27 percent year-on-year, and estimated mut ton production was five million lbs., up 22 percent. The industry remains relatively current with historically low freezer inventory. Lamb and mutton freezer inventory is about half of the record highs observed in early 2016. Cold storage stocks were 23.4 million lbs. in early November, up 6 percent

monthly and down 24 percent year-on-year. Beginning in 2015, lamb imports gained year-over-year for five consecutive years, but then declined by two percent in 2020. In that year, imports were impacted by the pandemic related impacts on foodservice. If fourth quarter lamb imports keep pace with 2020’s volume, then this year will see a 20 percent annual gain in lamb imports with lamb imports up 17 and 30 percent, respectively, from Australia and New Zealand. Total lamb imports were 198.8 million lbs. in January to September, up 28 percent year-on-year. Lamb imports from Australia were up 24 percent to 147.7 million lbs. and New Zealand lamb imports were up 44 percent at 48.2 million lbs. Lamb exports were down January to September by 34 percent to 271,000 lbs.

6 • Sheep Industry News • sheepusa.org