Sheep Industry News February 2023

Market Report

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

2023 BeginsWith Higher Prices

L ive lamb prices began to increase late in the year providing some optimism for 2023. Ample total supplies are avail able in the retail market to begin the year and they should build seasonally. There are some big factors to watch this year that will impact markets. PRICES Live lamb prices began to increase slowly in the last quarter of 2022. Slaughter weight lambs in the 110- to 130-pound category increased from a weekly average of $97 per cwt. to $140 per cwt. by year’s end. While they have increased, they are still below the $230 per cwt. at this time last year and they remain below the five-year average. The average of traditional feeder lamb prices increased also from about $130 to $235 cwt. during the last four months of the year. We often talk about the traditional versus the non-traditional market and the prices relative to each other. It’s important to remember that they are both lambs even though they might be going through different market channels. The prices for lambs

going through those market channels move together. The non-traditional market – as measured by prices in New Holland, Penn. – declined in 2022 like traditional market lambs, but the level of prices was higher. By the end of 2022, the aver age of feeder lamb prices was higher than New Holland prices. The lines between these two markets will continue to blur in the future. While live animal prices were building higher, in the lamb meat area prices for major cuts continued to slide through the end of the year. Given evidence of struggling demand that has caused sharply lower live prices and lower wholesale prices, evidence is that retail prices remain high. Lower prices will have to translate to retail markets to rebuild demand. Retail pork and chicken prices are beginning to decline. Retail beef prices have been declining for months and are now lower than they were last year. So, competing meat prices in the meat case might argue for some lower lamb prices.

SUPPLIES Production was below the year before in the fourth quarter of

2022. While lamb and yearling slaughter was increasing season ally late in the year, it was less than in 2021. Dressed weights corrected lower and fell back below the five-year average and back to last year’s level. Weights – on average – aren’t suggesting burdensome supplies this Spring. Combined with reduced slaughter, domestic supplies should support prices. The struggles of lamb demand and consumption has led to the building of cold storage stocks. Cold storage supplies hit almost 30 million pounds in November – the latest available report. That is equal to the five-year average and more than the 23.4 million pounds in November 2021. It will be important to see stocks drawn

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