US Senators support sheep producers

DENVER, CO – The lamb market for farmers and ranchers has collapsed to well below half of last year’s prices. That, combined with the severe drought and the corresponding high cost of feedstuffs, has put sheep producers in a very difficult situation. Eight U.S. Senators, in a letter to Agriculture Secretary Tom Vilsack, stated this is why prompt support is needed for sheep producing operations.

“With price swings exceeding normal boundaries and an insurance product that does not appear to be offering price protection as intended, my Senate colleagues and I want the U.S. Department Agriculture (USDA) to investigate market anomalies, make much-needed corrections to its livestock risk protection insurance and push hard for increased lamb exports,” said Sen. John Thune (R-SD).

U.S. Sens. Thune, Max Baucus (D-MT), Jon Tester (D-MT), Tim Johnson (D-SD), John Hoeven (R-ND), Kent Conrad (D-ND), Michael Enzi (R-WY) and John Barrasso (R-WY) requested the secretary to implement agriculture department actions in four key areas. A request was made for the Grain Inspection Packers and Stockyards Administration to immediately investigate the drastic change in the price spread between live lambs and meat markets to ensure that the benefits of the recent USDA commodity purchases actually reach the farm and ranch gate.

“When everyone plays by the rules, Montana sheep producers can compete with anyone around. Montana sheep producers deserve the right to compete on a level playing field so they can continue supporting agriculture jobs and rural economies across the state – and that’s what we’re fighting for,”said Baucus.

The senators also called for support of lamb-market price discovery and transparency, including market reporting and statistical reports provided by the department, to provide accurate and unbiased market information to producers and businesses.

“Agriculture is Montana’s largest industry, and the food we raise is world-class,”Tester said.”Our sheep producers are dealing with market disruptions from this year’s record drought. They deserve a chance to compete on a level playing field so they can get back on their feet and keep feeding our families and strengthening our economy.”

Additionally, the letter makes a request for the Risk Management Agency to conduct a full review of the Livestock Risk Program for lamb (LRP-Lamb) and to make the necessary adjustments to allow the program to function as an effective risk management tool for sheep producers. In recent weeks, the policies are not functioning as intended due to administratively imposed restrictions, states the letter.

Margaret Soulen Hinson, American Sheep Industry Association (ASI) president, applauds the senators’ support for USDA action and expresses hope that critical programs, such as LRP-Lamb, can be fully available for the industry’s use. “Only half of the coverage periods have been offered for sale to producers and feeders this fall, which greatly limits the only price-risk management tool available in the sheep industry. Given market uncertainties, risk management is a key factor to get lambs moving from drought-starved pastures to the lamb feeding areas of the country,” she states.

In conclusion, the senators asked Vilsack to make the opening of export markets for American lamb a priority.

“We have lamb companies interested in trade beyond North America, however, key markets, such as Europe, Taiwan and Russia, are closed to American lamb,” comments Peter Orwick, ASI executive director. “In fact, Japan shut down lamb trade nearly 10 years ago due to BSE and a key push from USDA is needed to right this trade disparity.”

“In July, USDA provided $10 million for commodity purchases of lamb from companies and immediately lined up commitments to get truckloads of meat moving to help with product backlog and to strengthen prices for our farmers and ranchers,” said Soulen Hinson. “The senators’ urgency to line up that same support to help the nation’s 81,000 sheep producers with risk management, price discovery, opening export markets, ensuring analysis of price spreads and the investigation of the market is key to addressing the market collapse and drought.”

–American Sheep Industry