Tim Petry: Lamb prices to continue strong | TSLN.com

Tim Petry: Lamb prices to continue strong

Tim Petry, Livestock Marketing Economist, NDSU Extension Service

Lamb prices set a record high in 2010, which is welcome news for producers after the last several years of depressed prices. The last record high year for slaughter-lamb prices was 2005. The 2010 prices exceeded that old record by more than 15 percent. Slaughter-lamb prices were 25 percent higher than the depressed prices of 2009, and feeder-lamb prices were 33 percent higher.

Higher prices are being fueled by shorter supplies of lambs and strong demand for lamb and byproducts.

Lamb and mutton production for 2010 was 163 million pounds, which was down from the 171 million pounds in 2009 and down from 187 million pounds in 2005. Total lamb and mutton imports were 169 million pounds in 2010, down 2 million pounds from 171 million pounds recorded last year. This decrease, coupled with the 8 million pound decline in production this year, means lamb availability in the U.S. declined by 10 million pounds.

A U.S. and world economic meltdown resulted in lackluster demand for lambs in 2009. Fed-lamb prices at major markets in the northern Plains started 2010 at around $100 per hundredweight and steadily increased throughout the year to about $160 per hundredweight. Fed-lamb prices usually peak seasonally in midsummer and then decline the rest of the year. Last year, prices continued to increase in the last half of the year.

Early in the year, lamb prices were bolstered by a stronger demand for the religious/ethnic holidays, such as Mawlid al-Nabi, Passover and Easter. Both wholesale lamb shoulder and leg prices, which are typical cuts served at home during the holidays, strengthened nicely compared with year-earlier levels.

However, the struggling U.S. economy continued to impact the white tablecloth restaurant market. Both wholesale loin and rack prices, which are typical restaurant menu items, were even below the depressed levels recorded in 2009.

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However, by the fourth quarter, loin and rack prices improved nicely, with loins trading about 50 percent higher and racks commanding more than 60 percent higher prices than in 2009. This signaled a welcome return of the restaurant business.

Lamb byproduct prices are very dependent on the export market. Byproduct prices increased nicely as the value of the U.S. dollar declined and the economies of other countries recovered faster than in the U.S. For example, lamb pelt prices began 2010 at $4.50 and ended the year at $9.

In spite of corn prices rising more than 50 percent compared with last year, feeder lamb prices responded favorably to increasing fed-lamb prices. Ninety-pound feeder-lamb prices started the year at about $115 per hundredweight and increased to near $175 by year’s end.

Lamb prices set a record high in 2010, which is welcome news for producers after the last several years of depressed prices. The last record high year for slaughter-lamb prices was 2005. The 2010 prices exceeded that old record by more than 15 percent. Slaughter-lamb prices were 25 percent higher than the depressed prices of 2009, and feeder-lamb prices were 33 percent higher.

Higher prices are being fueled by shorter supplies of lambs and strong demand for lamb and byproducts.

Lamb and mutton production for 2010 was 163 million pounds, which was down from the 171 million pounds in 2009 and down from 187 million pounds in 2005. Total lamb and mutton imports were 169 million pounds in 2010, down 2 million pounds from 171 million pounds recorded last year. This decrease, coupled with the 8 million pound decline in production this year, means lamb availability in the U.S. declined by 10 million pounds.

A U.S. and world economic meltdown resulted in lackluster demand for lambs in 2009. Fed-lamb prices at major markets in the northern Plains started 2010 at around $100 per hundredweight and steadily increased throughout the year to about $160 per hundredweight. Fed-lamb prices usually peak seasonally in midsummer and then decline the rest of the year. Last year, prices continued to increase in the last half of the year.

Early in the year, lamb prices were bolstered by a stronger demand for the religious/ethnic holidays, such as Mawlid al-Nabi, Passover and Easter. Both wholesale lamb shoulder and leg prices, which are typical cuts served at home during the holidays, strengthened nicely compared with year-earlier levels.

However, the struggling U.S. economy continued to impact the white tablecloth restaurant market. Both wholesale loin and rack prices, which are typical restaurant menu items, were even below the depressed levels recorded in 2009.

However, by the fourth quarter, loin and rack prices improved nicely, with loins trading about 50 percent higher and racks commanding more than 60 percent higher prices than in 2009. This signaled a welcome return of the restaurant business.

Lamb byproduct prices are very dependent on the export market. Byproduct prices increased nicely as the value of the U.S. dollar declined and the economies of other countries recovered faster than in the U.S. For example, lamb pelt prices began 2010 at $4.50 and ended the year at $9.

In spite of corn prices rising more than 50 percent compared with last year, feeder lamb prices responded favorably to increasing fed-lamb prices. Ninety-pound feeder-lamb prices started the year at about $115 per hundredweight and increased to near $175 by year’s end.

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