Sheep Industry News October 2022

Market Report BRIDGER FEUZ University of Wyoming

Making Sense of the Lamb Market

I have been asked to try and make sense of the significant downturn in the lamb market a few times in this last month. Each time I have been asked, those requesting my services have done so quite sheepishly (pun intended). There is a realization that making sense of the current mar ket is a big challenge. As usual when these sorts of shifts happen in the lamb market, there are several contributing factors. These factors include supply side issues such as lamb in cold storage, lamb slaughter weights, lambs on feed and lamb imports. The factors also include demand side issues such as consumer sentiment, price inflation and consumption. I will touch briefly on the supply side issues in this article, but will focus most of the discussion on the demand side issues. I think understanding consumer demand moving forward will be key to the short and long-term trends in the

lamb market.

SUPPLY The supply numbers used in this article are as of Sept. 9. Contributing to lower prices is an increase in lamb and yearling weights. Average lamb and yearling dressed weights this summer are up 8 pounds compared to last year – at 68 pounds as opposed to 60 pounds – representing a 12 percent year-over-year increase in dressed weight. Compounding the issue of heavier lambs has been the number of lambs on feed throughout 2022. Colorado lambs on feed data has shown that we have been feeding signifi cantly more lambs this year than last. The combination of heavier weights and increased numbers on feed can also indicate that there is a backlog of lambs. However, by the end of August, the data shows that we have now dropped below

2021 levels and are back at the five-year average from 2016 to 2020. It is not clear if we have worked through some of the backlog or if lambs are being held on forage longer or sent to slaughter as lightweight lambs. Both are potential strategies to mitigate the cur rent market conditions. Cold storage – as reported by the U.S. Department of Agriculture – was at or below 2021 levels through May. However, since May cold stor age has begun to climb above 2021 levels but is still sig nificantly below the five-year average from 2016 to 2020. Finally, let’s look at imports. Lamb imports were 25.9 mil lion pounds in July, which is slightly above the 25.4 million pounds from July 2021.

6 • Sheep Industry News • sheepusa.org