Lamb & wool outlook: Producers can expect good prices in coming year | TSLN.com

Lamb & wool outlook: Producers can expect good prices in coming year

Gayle Smith

Lamb producers can expect to see prices as good or slightly better than 2011 levels, as long as the economy continues to recover and input prices remain at favorable levels, a University of Wyoming livestock marketing specialist said.

Bridger Feuz spoke of price trends and changes affecting the lamb and wool industry during the Northeast Wyoming Sheep Symposium recently. “There has been a lot of uncertainty, mixed messages and volatility in the livestock market that hasn’t been there in the past,” Feuz said. “In the past, economists talked about how wonderful it was that there was a 35-cent move in corn over a year. Now we see $5-$7 swings in corn over a year,” he explained. Volatility in the livestock market is due mostly to price variation in corn and uncertainty in the economy, sending mixed messages for the lamb market.

Feuz said lamb producers may continue to see increased demand for their product in the future because of demographic changes and population increases in the U.S. There has been a 22 percent increase in Hispanic and Latino populations, which are groups that typically consume lamb. In addition, those groups also traditionally have larger families, which is good for the lamb and sheep industry, Feuz noted.

On the downside, the U.S. unemployment rate continues to be high, with many households operating on a restricted income. “Many of these households may not be able to buy our product, but as the population continues to grow, there may be more people out there with the dollars available to spend on our product,” he explained.

Feuz said the strong Australian dollar is also helping the U.S. lamb industry. “The exchange rate plays into the overall U.S. economy, because the Australian dollar has become relatively strong and is about par with the U.S. dollar. It strengthens the market for our product because it isn’t as enticing to import Australian lamb into the U.S. right now,” he explained.

Per capita, Feuz said Americans are consuming less lamb per pound, but they are willing to pay more for what they consume. “As an industry, we need to continue to work on consumer demand,” he explained. “We need to advertise to get more people interested in lamb, and we need to work on increasing the per capita consumption. I think it will help that the ethnic population continues to grow,” he noted.

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“Prices are strong, which has been great news for producers,” Feuz continued. Looking at the U.S. lamb and mutton imports, Feuz said the U.S. continues to import less and less lamb. “As prices continue to rise to consumers, the ethnic market has started to substitute some mutton for lamb.” As a result, it is projected that imported mutton may increase this year.

Lamb producers can expect to see prices as good or slightly better than 2011 levels, as long as the economy continues to recover and input prices remain at favorable levels, a University of Wyoming livestock marketing specialist said.

Bridger Feuz spoke of price trends and changes affecting the lamb and wool industry during the Northeast Wyoming Sheep Symposium recently. “There has been a lot of uncertainty, mixed messages and volatility in the livestock market that hasn’t been there in the past,” Feuz said. “In the past, economists talked about how wonderful it was that there was a 35-cent move in corn over a year. Now we see $5-$7 swings in corn over a year,” he explained. Volatility in the livestock market is due mostly to price variation in corn and uncertainty in the economy, sending mixed messages for the lamb market.

Feuz said lamb producers may continue to see increased demand for their product in the future because of demographic changes and population increases in the U.S. There has been a 22 percent increase in Hispanic and Latino populations, which are groups that typically consume lamb. In addition, those groups also traditionally have larger families, which is good for the lamb and sheep industry, Feuz noted.

On the downside, the U.S. unemployment rate continues to be high, with many households operating on a restricted income. “Many of these households may not be able to buy our product, but as the population continues to grow, there may be more people out there with the dollars available to spend on our product,” he explained.

Feuz said the strong Australian dollar is also helping the U.S. lamb industry. “The exchange rate plays into the overall U.S. economy, because the Australian dollar has become relatively strong and is about par with the U.S. dollar. It strengthens the market for our product because it isn’t as enticing to import Australian lamb into the U.S. right now,” he explained.

Per capita, Feuz said Americans are consuming less lamb per pound, but they are willing to pay more for what they consume. “As an industry, we need to continue to work on consumer demand,” he explained. “We need to advertise to get more people interested in lamb, and we need to work on increasing the per capita consumption. I think it will help that the ethnic population continues to grow,” he noted.

“Prices are strong, which has been great news for producers,” Feuz continued. Looking at the U.S. lamb and mutton imports, Feuz said the U.S. continues to import less and less lamb. “As prices continue to rise to consumers, the ethnic market has started to substitute some mutton for lamb.” As a result, it is projected that imported mutton may increase this year.

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