Sheep Industry News February 2025

Market Report

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

It's Still Winter, But Almost Spring

I t’s the start of a new calendar year, still winter but, spring is on its way. At the time of this writing, the U.S. Department of Agricul ture’s sheep inventory report has not been released but it will be by the time of publication. So, I’ll leave inventory numbers to the next writer. But, there remains plenty to examine in the markets between the end of one year and the beginning of the next. PRODUCTION Mature sheep slaughter seemed surprisingly large in 2024. Federally inspected slaughter was the equivalent of about 4.3 percent of the ewe inventory in 2024 compared to 4 percent in 2023. That was the largest rate of slaughter as a percent of the ewe flock since 2021. On average in the last decade, that percentage has been about 3.8 percent. On the lamb and yearling side, federally inspected slaughter totaled 1.75 million head. That was 0.7 percent larger than the prior year. When combined with slightly higher weights in the second half of the year, lamb production was about 2.5 percent larger than the prior year. Greater production likely pressured prices during the year. Dressed weights exhibited the normal seasonal pattern in 2024, peaking in the spring and declining later in the year. What made them interesting was that during the first half of the year they were below 2023’s weights, but in the second half of the year they were heavier than in 2023. When comparing production between 2024 and 2023, lighter weights helped to offset larger slaughter during the first half of the year

while later in 2024 heavier weights boosted lamb production.

PRICES On the meat side of the market, lamb prices exhibited little of the normally expected seasonality in 2024. The lamb cutout traded between $460 and $480 per cwt. all year until a late slide below $460 in the last couple weeks of the year. Shoulders, racks and loins exhibited the same flat trading pattern. Normally, different cuts experience dif ferent seasonality of prices, either driven by holidays – Easter or other religious holidays – or by production patterns. For example, tighter supplies of lamb in late summer, but little of that seasonality material ized in 2024. Live lamb prices exhibited a much more normal pattern than lamb meat. Although, the range from high to low was larger than average. That appeared to hold for traditional heavier slaughter lambs and lightweight, 60- to 90-pound slaughter lambs. The larger range of prices throughout the year suggests some increase in price volatility compared to past years. Examining the average, standard deviation, and coefficient of varia tion as measures of volatility using weekly prices each year from 2020 to 2024 revealed some interesting results. The standard deviation and coefficient of variation of prices in 2024 was not nearly as volatile as in 2022. But 2022 was the year prices collapsed from very high to terribly low levels creating the appearance of more volatile prices. Price volatility looks a little different depending on the data used.

Auction market data for 100- to 150-pound lambs indicates little difference in price volatility measured using the coefficient of variation in 2024 compared to other years since 2020. For 60- to 90-pound lambs, little difference is noted for data from San Angelo, Texas, and Sioux Falls, S.D., auction market reports. However, Fort Collins, Colo., prices indicate a little more volatility in 2024 compared to 2020 to 2023. The USDA/Agricultural Marketing Service 352 national negotiated slaughter lamb report indicates a little less volatility than the last five years, but it is worth noting that much of the data for 2020 was not available due to confidentiality rules. On balance, there is some truth to the idea of more volatile prices when looking at the range of prices this year. The timing of price movements is

See MARKET REPORT on Page 18

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