Sheep Industry News January 2023

MARKET REPORT Continued from Page 7

aged $126.67 per cwt. in early December, and it was also lower than the November average of $133.53 per cwt. While prices have varied in the regional markets, the national weekly negotiated slaughter lamb prices have trended upward for five continuous weeks. In early December, prices were $127.63 per cwt., which is below last year’s price at $233.56 per cwt. and below the previous five-year average of $145.65. If the national slaughter prices continue to increase, this could trickle down through to the lighter feeder weight classes in 2023. This could already be occurring as a function of the lower pro duction levels. Additionally, storage is decreasing, and imports are slowing compared to last year. The lamb market continues to have some mixed signals. On the positive side, declining dressed weights and production indicates less supplies contributing to better live lamb prices as we enter 2023. WOOL There’s no question that the wool market has had its struggles for a large part when compared to 2021. But in early December, prices across all reported microns from 17 to 32 rebounded in response to the easing of China COVID policies. According to Australian Wool Innovation trade consultant Scott Carmody after many months of selling under uncertain demand and weakening price levels, the COVID zero policy changes in China had an immediate effect. In the second week of December, most microns gained week-to week, driven by increased buyer demand across all microns. The largest weekly price increases were seen in 18 micron (U.S. $5.77 per lb.), up 29 U.S. cents per lb. and 21 micron (U.S. $4.43 per lb.), up 33 U.S. cents per lb. In early December, the Australian Eastern Market Indicator had its highest weekly gain in 18 months of 54 AUS cents per kg clean or 37 U.S. cents per kg clean to a closing level of 1,278 AUS cents per kg clean (857 U.S. cents per kg clean). While current prices for all microns remain below those seen dur ing the first half of 2022, the renewed demand from China should support prices in 2023. As 2023 starts, the question moving forward is if the bottom in the wool market complex has been found. With the winter season upon us, there are some concerns that wool could miss its peak demand opportunity. Now that COVID restrictions are being lifted in countries around the world, does this spur more demand in 2023 for wool products? In addition to this big question, the global economic impact of inflation and interest rates will be something to watch. POLICY In late November, the U.S. Department of Agriculture an nounced plans for a Section 32 purchase of American lamb products (i.e., leg roast, diced frozen product, shoulder chops, loin chops) that will then be distributed to various food nutrition assis tance programs. This purchase will provide short term relief to ease the buildup of lamb supplies that occurred in 2022.

through October compared to last year came from Australia. In October 2021, mutton imports from Australia began a four-month run of monthly imports of more than 10 million pounds per month. In 2022, mutton imports through October are about 16 per cent lower than last year, with the lion's share coming from lower Australian imports. The lower domestic production levels and higher prices might be the driving reason for the increase in total imports this year. Cold storage of lamb and mutton stocks began to decrease from September to October. Typically, there is a decrease in storage in the second half of the year. In 2022, there was an increase in total storage, but with the decrease from September to October, total storage is only 1.4 million pounds more than a year ago. LAMB PRICES FINDING SUSTAINABLE STEAM? The three-market average of Texas, South Dakota and Colorado feeder lamb (60 to 90 lbs.) prices in the first week of December saw the highest prices since June at $236.12 per cwt. New Holland, Penn., prices were lower on the same week at $225.67 per cwt. for 60 to 90 lbs., but prices have had four consecutive weeks above $225 per cwt. Similar trends for 60 to 90 lbs. feeder lambs have been seen in Tennessee, with Columbia, Tenn., prices around $220 per cwt. Similarly, heavier weighted slaughter lambs saw an increase in prices in all major markets through November. But, in the first week of December, San Angelo, Texas, 100 to 150 lbs. slaughter lambs were averaging $149.50 per cwt. (Choice 1-3), which was ap proximately $10 per cwt. lower compared to the November average. New Holland 100 to 150 lbs. slaughter lambs (Choice 1-3) averaged $149.28 per cwt., and saw a similar decrease in early December prices relative to the November average of $168.93 per cwt. Fort Collins, Colo., 100 to 150 lbs. slaughter lambs (Choice 1-3) aver

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