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September 1, 2005 Market Advisor: Expansion in U.S. Sheep Flock is Occurring
The USDA-National Agricultural Statistics Service’s annual midyear sheep report indicated a U.S. sheep and lamb inventory of 7.8 million head, which is 2 percent above last year. This is the first time since 1990 that the midyear report has recorded an increase in numbers. Sheep numbers generally have been declining since 1942, but the decline in the previous five years has been due to drought conditions in many Western sheep-producing states. Improved moisture conditions in several sheep-producing states in 2004 and continued improvement in many Western U.S. states in 2005 has allowed producers to consider flock rebuilding. Record high lamb prices, along with the extension of the ewe lamb retention program, also helped fuel interest in keeping replacement ewe lambs. The number of breeding ewes a year and older, at 3.79 million head, is 1.2 percent higher than a year ago. Replacement lambs, at 680,000 head, increased 9.7 percent, compared with last year. This was the second straight year with an increase in replacements. The number of replacement lambs was up 3 percent last year. The U.S. lamb crop is projected by the USDA to be 4.12 million head in 2005, which is just 1 percent higher than last year. Declining U.S. sheep
numbers and lamb meat production has led to increased imports of lamb
for U.S. consumption. Imports amounted to less than 20 percent in 1995,
but increased to more than 45 percent in 2004. For the first half of 2005, lamb and mutton imports were 15 percent below last year. If the trend continues, it will be the first year-to-year decline since 1994. While imports from Australia were up about 8 percent, imports from New Zealand declined nearly 33 percent. Most live sheep and lamb imports into the U.S. come from Canada. No live sheep or lambs were allowed into the U.S. in 2005 until July 14, when the 9th U.S. Circuit Court of Appeals lifted the preliminary injunction that prohibited lambs less than 12 months of age from entering the U.S. The USDA closed the border to imports of live cattle and sheep in May, 2003 when BSE was discovered in a Canadian cow Only feeder or slaughter lambs that will be slaughtered before they reach 12 months of age are allowed into the country. Due to the many regulations that affect feeder lambs, only a few slaughter lambs have come in so far. Lambs for breeding purposes, even if they are less than 12 months of age, are not allowed into the U.S. Lamb production in
2005 has been down about 4 percent from last year. Lower production, coupled
with lower imports, has bolstered prices. Feeder lambs weighing 80 to 90 pounds at Northern Plains auction markets were bringing $125 to $135 per hundredweight, with individual lots of replacement-quality ewe lambs bringing a $5 to $10 premium. Lamb prices likely will exhibit normal seasonal weakness into the fourth quarter, but still be at historically high levels. Prices for replacement ewes will be especially strong as interest in flock rebuilding continues. ### Source:
Tim Petry, (701) 231-7469, tpetry@ndsuext.nodak.edu |
Market Advisor: |
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North Dakota State University |
