Sheep: Is the "mortgage lifter" an endangered species?
Once known as the rancher’s “mortgage lifter,” the commercial band of ewes is having a struggle just supporting itself, let alone a whole ranch. In the past, operators who ran a combination of cattle, usually mother cows, and sheep, were able to stay afloat through market cycles because while one end was down, the other was up. The two balanced the ranch/farm income and made the land payments and such.
The whole scenario has changed though, with dismal cattle prices running hand in hand with equally dismal feeder lamb prices for 2009. A hard winter and stormy spring, plus grasshoppers in many areas, have made it even tougher on the sheep producers, without the market spiraling downward as well.
Going back a few years when the market was steady, the USDA-South Dakota Dept. of Agriculture Market report from St. Onge Livestock, Newell (SD) Sheep yards, showed in the Sept. 22, 2005 sale that 75 lb average feeder lambs were bringing 144.79, 101 lb lambs 113.00, and 117 lb lambs 96.98. Fast forward to the same report from Sept. 24, 2009 and it shows a dramatic difference. In that report, 75 lb lambs were bringing 105.84, 104 lb lambs 89.40, and 115 lb lambs 87.75.
The USDA report showing sales from other western states showed the prices are steady to lower when compared to the St. Onge report. Nevada lambs weighing 75 lb were bringing 95.00, Utah lambs weighing 102.5 lbs were bringing 97.00, and Idaho lambs weighing 114 lbs were bringing 87.39. Similar prices were paid for Montana, Washington, California and Wyoming lambs off the same report.
Industry wide, the sheep/lamb market is way off. The question is why. John Erk, lifetime sheep rancher from the Newell/Castle Rock area, and lamb buyer for northern plains and Midwestern lamb feeders, said, “I don’t know what’s happening or why it’s like this. With the decrease in sheep numbers, it should result in a higher price, but it’s not. The opposite is true.”
Indeed, sheep numbers are way down. The American Sheep Industry Association (ASI) Sept. 1, 2009 newsletter states that, as of July 1, 2009, USDA Sheep Report states that U.S. sheep and lamb flocks totaled 7.05 million head, 220,000 head less than the same report a year ago. A severe winter in parts of the country, in addition to spring snow storms in the Dakotas, Wyoming and Montana contributed to the loss of ewes and lambs. However, sheep numbers were also down between 2007 and 2008.
The report also stated that breeding ewes one year and older, was 3.47 million head compared to 3.59 million head the year before. It follows then that the number of market lambs was down 105,000 head from last year at 2.69 million head. Both the breeding ewe and market lamb inventories were the smallest mid-year numbers on record.
In the same report, the 2009 lamb crop is estimated to be 3.7 million head, which is four percent smaller than 2008.
So, back to Erk’s statement about lower numbers reflecting higher prices. If this were true, the sheep market across the board should be higher than ever due to supply and demand economics.
A major problem is a stoppage at the end of the market funnel in that fat lambs are simply not selling.
“I’ve recently talked to lamb feeders from Minnesota and Iowa and they are both having trouble getting rid of their fat lambs,” Erk said. “The Iowa feeder had three loads of fats standing in feedlots in Colorado a month after they were ready. He’d only been able to sell one load when we talked last. That bothers me more than anything.”
The U.S. sheep inventory is down, prices are down instead of up in relation to that, so something is causing the imbalance.
The Livestock Weekly out of San Angelo, TX reports that imported meat (lamb) is up 12 percent over last year. The ASI reports that through June 1, 2009, imports of 82.8 million pounds of meat were up 273.000 pounds from the same period the year before. Further, lamb imports through May were up eight percent to 64.8 million pounds. Imports from Australia were up nine percent to 45.9 million pounds and imports from New Zealand were up four percent to 18.7 million pounds.
Erk also said that the registered sheep business was struggling as well.
“My son Paul’s registered Rambouillet rams sold at the Newell Ram Show and Sale for $500-600 a head this year,” says Erk. “A few years ago the same kind of rams were selling for up to $1,500 a head.”
With sheep numbers down and money in pocket down, he wonders how long the sheep producers, either registered or commercial, can hang on.
It’s certainly a sad commentary on our nation’s trade policies that domestic producers of the safest lamb and mutton in the world are being starved out while imports increase. It’s also sad that the pastures of the northern plains have fewer and fewer of the “mortgage lifters” grazing the short grass and controlling the weeds. It would be a poorer landscape without them.