Sheep Industry News March 2022

Market Report DAVID ANDERSON, PH.D. TEXAS A&M UNIVERSITY

This Year's Pro m ising Start

T his year is off to a promising start, with live lamb and meat prices continuing their high levels from 2021. But those high prices have come with high production costs and higher costs of getting lamb from the ranch to consumers. Beyond that, there is plenty to dig into in sheep and lamb inventories, cold storage stocks and imports as they respond to high prices and some expecta tions for the coming year. USDA’S SHEEP INVENTORY REPORT The U.S. Department of Agriculture’s sheep inventory report was released on Jan. 31, and indicated 2 percent fewer sheep in the United States compared to Jan. 1, 2021. The ewe flock was down 1.7 percent. Digging into the report a little deeper suggests a couple other points. The ewe flock was down only 1.7 percent in the face of the largest federally inspected mature sheep slaughter since 2011. Mature sheep slaughter as a percent of the ewe flock in 2021 was 4.5 percent – historically very large and the largest in more than a decade. Replacement lambs totaled 640,000 head and were the equiva lent of 22 percent of the ewe flock. This level of retention would be consistent with a steady number of ewes or even some growth if not for the large mature sheep culling that occurred in 2021. Certainly, drought, higher costs and other production constraints – and high

prices – led to more culling and the smaller flock. But the level of retention would suggest some opportunities for growth this year. While most states reduced their ewe numbers, there were some notable exceptions. California, Nevada, Washington and New Mexico reported more ewes ranging from an increase of 3.7 percent (Wash.) to 8 percent (Calif. and N.M.). It was a mixed bag in other regions with more ewes reported in North Carolina, Kentucky and West Virginia, but reductions in Tennessee, Virginia and Pennsyl vania. It’s worth noting that the one category reporting more lambs than the year before was the market lambs under 65 pounds. This category was reported 2.1 percent (7,000 head) greater than the prior year. TRADE Lamb imports are always an important lamb market factor and the latest data released by USDA completes the data for 2021. Lamb imports surged to 29.4 million pounds in June. That was the largest monthly import of lamb – likely on record – with data going back to the late 1980s. Normally, imports peak in March and then decline from April to September, after the Spring holiday season, and then grow in the last quarter of the year. Imports did decline following that peak, and were just under 20 million pounds in December. For the year, a record 264 million pounds were imported with

98.4 percent of that from Australia and New Zealand. Of the total, 74 percent came from Australia and 24 percent from New Zealand. The year also saw record large mutton imports, at 99.8 million pounds. More than 90 percent of that product came from Australia. While mutton imports have trended higher in the last 30 years, the real surge has occurred in just the last few years. Live animal trade grew for both exports and imports in 2021. Almost 23,000 head were imported for the year – the most since 68,000 were imported in 2003. Sheep exports totaled 46,700 head with the majority – 34,329 head – going to Canada. High domestic lamb prices certainly fueled increased imports. It’s likely that imports will remain high this year as high prices and re

US LAMB IMPORTS Carcass Weight, Monthly

Mil. Pounds

30

25

20

15

10

5

JAN FEB MAR APR MAY

JUN JUL

AUG SEP

OCT

NOV DEC

Avg. 2015-19 2020 2021

Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center

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