Sheep Industry News July 2022

So, what does 2022 look like? The U.S. Baseline Lamb Cost of Production Analysis has not been updated, but we all have a sense of rising costs of production. While it is difficult to ac curately reflect the new cost of production without doing a full update of this publication, another simpler approach is to ad just the costs for inflation. This simple inflation calculation is a good approximation, but again might not reflect your actual costs of production. However, using this simple calculation, we can see that costs have likely increased significantly. The adjusted cost of production (2018 dollars to 2022 dollars) on a per ewe basis for each region is as follows: Western – $186.74; Northcentral – $183.18; Southcentral – $156.05; and Eastern – $210.11. The estimate for the national average cost of produc

tion in 2022 would be $182.74 per ewe. I thought it would be helpful to go back to those same 2018 budgets and adjust the cost of production with the new esti mates to determine the new break-even price for each region. I updated the cull ewe prices and wool prices to current 2022 prices so that we could focus in solely on the price needed for lambs that would provide us with a break-even. Using the regional budgets, the average price needed to break-even in 2022 ranges from $1.86 per pound to $2.47 per pound. The price needed to break-even using the national average budget was $2.17 per pound. This represents approxi mately a 13 percent increase in the price needed to break-even from 2018 to 2022.

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July 2022 • Sheep Industry News • 7