Turbulent prices: Lamb values skyrocket, then plummet in the span of a year
Sheep producers this summer and fall are experiencing approximately 60 percent lower prices than last year’s high values.
Producers enjoyed strong prices during the summer and fall of 2021 when nearly all feeder lambs brought over $2 per pound and in a few rare cases 80-pound feeder lambs may have sold for nearly $3 per pound. Summer and fall of 2022 have been a different story and many sheep producers have been forced to take around $1 per pound for their lambs this year, well below a typical year’s average price.
USDA NASS reports all “sheep and lambs” inventory in the United States on January 1, 2022 totaled 5.07 million head, down 2 percent from January of 2021. So overproduction isn’t to blame.
Jeff Hasbrouck, who along with his family operates Double J Lamb Feeders near Ault, Colorado and Double J Lamb – Texas, a slaughter facility near San Angelo, Texas, said several issues are at play to depress lamb prices.
“We pushed that price so high last year because imports were down in 2020, and they were lower in 2021 compared to 2022, making us low on supply. Because of that people thought the feeder lamb market was moving up,” he said.
Inflation and the war in Ukraine have both pushed commodity (corn, soybean, alfalfa) and fuel prices up, which also contribute to the downturn for the feeder lamb market, he said.
“Those lambs would be $.20 to $.30 per pound higher if not for those high commodity prices,” he said.
But with the drop in value, producers are holding on to lambs – which is helpful to spreading the supply and in some cases may net them a higher sale price. Hasbrouck has one customer who currently has about 700 head of old crop lambs weighing about 160-165 pounds still waiting to go to market. “We had some weighing over 200 pounds earlier this year,” he said. A couple of his customers harvested and further processed 12,000 head this summer that are now in cold storage. This was due to the overabundance of fat lambs and the producers hoping for a rise in the market.
“Now we have a huge backup on numbers. Lambs on feed numbers in Colorado are high,” he said. Retail buyers balked at high prices last year, he said.
“This year, the market is terrible. It was embarrassing to talk to a producer and make an offer,” said Hasbrouck who buys lambs to feed and also custom-feeds about 150,000 head per year at his feedlot.
In 2020, less lamb was imported because covid restrictions made it difficult to get the lamb from Australia and New Zealand to the United States. Imports in 2021 were higher, but 2022 is trending higher yet.
“They couldn’t get the lamb into the ports, so that made our market look stronger,” he said.
“As soon as those imports could get back into our market at a good steady flow this year, we weren’t able to maintain the high fat market price,” he said.
David Anderson, a professor and extension economist for Texas A and M university specializing in livestock and meat said there were a lot of different factors at play to push the price up and then down so drastically.
Inflation and the continued rising cost of all goods could make lamb a less desirable option for some consumers, since it tends to be more expensive than other proteins, he said.
Additional imports also add to overall supplies, he said.
“Overall imports have been growing. We sure do import more than we produce ourselves, and there are certainly times that really huge imports can sort of swamp our domestic market,” he said. Anderson said that in addition to fewer imports leading up to the 2021 strong prices, domestic sheep numbers were also tighter.
“The first half of 2022 we imported more than we did in that same time frame in 2021,” he said.
“That has certainly added to our supplies, which contributes to lower prices,” he said. “Overall we’ve imported more lamb this year, and that has to reflect on prices. One thing that encourages more imports is really high prices in the US. We had that last year,” he said.
The current slump in prices will discourage imports – and has to a certain extent, he said, with import numbers dropping a bit over the past two months.
“The price difference between domestic and imported product is smaller. That should help limit imports,” he said.
Anderson said according to market research, strong demand during the pandemic upheld the market in 2021.
“We had high prices, demand was good. People were working at home, staying at home, cooking new things. Lamb was a beneficiary of that,” he said.
The high prices encouraged feeders to pay high prices for feeder lambs, which have now drastically dropped in value, so feeders hold on, hoping for the market to rise enough to at least break even, he said.
Both men talked about the impact of non-traditional consumers, including Muslims and immigrants from countries that typically rely on lamb for a far greater percentage of their protein needs.
“I think that has helped demand over time,” said Anderson. “It does create a changing market,” he pointed out. In the traditional system, ranchers typically sell 80 to 100 pound feeder lambs to a feeder, who fattens them to 120 to 150 pounds. Some of the non-traditional consumers prefer to buy meat from a smaller lamb weighing 60-80 pounds, which would typically be a grassfed lamb – not yet sent to the feedlot.
Anderson said that in a market research project he helped with about 10 years ago in Chicago, some consumers of Hispanic, eastern European, Moroccan, and Lebanese descent, indicated they sometimes buy lamb over other proteins because they consider it to be a more “natural” product with less added hormones and antibiotics.
Imported lamb tends to be grass fed, while American lamb is usually grain fattened. Far more than half of the lamb eaten in the US is imported. Country of Origin Labeling is required for lamb.
Hasbrouck said he markets lamb that is 100 percent born, raised, and processed in the US. He said he can’t sell his product as cheaply as a lot of the imported product, but the lambs he feeds, and processes have a milder flavor because they’ve been fattened on grain.
“Domestic lamb is a fresher product, and has a milder flavor,” he said. I don’t think the public understands the difference between Australian and New Zealand lamb vs. US lamb. I think they just see a difference in price and they don’t understand why there is a difference,” he said.
He said some of the ethnic populations in Colorado have adjusted their demand to fit the product he has available. In the past, they wanted a 60 to 80-pound lamb with very little fat. “We don’t have that size of lamb available,” he said. “Today they come in and instead of asking for that 80-pound lamb like they used to, now they are asking for a 120 to 130-pound lamb,” he said. Hasbrouck said after trying the grain fed lambs, many of the non-traditional consumers like the flavor, and they also realize they get more pounds of meat for their money.
Hasbrouck said in some cases, loads of 80-pound lambs from the west are being purchased by a middleman on the coast, who unloads them, puts them on grass, and sells them off as customers are ready.
These non-traditional consumers are keeping demand where it is, believes Hasbrouck. And a steady increase in imports has kept domestic sheep numbers dropping.
He said he’d rather see a steady market than the extreme highs and lows of recent months. A steady supply would help, but he said US producers did not “overproduce.”
“It was a false market because of Covid. Even though it was a year later when those restrictions were lifted, it caused ripple effects of those imports not getting into the system for a time,” he said.
Hasbrouck said the feeder lamb market has been slowly but steadily improving in recent weeks. “If producers can hold those lambs until November or December, it makes them more valuable to the feeder. It helps us spread the supply,” he said.
Anderson believes the market will get better, but it’s hard to say how fast.
“I think next year the market will look better. Hopefully we get into an Easter market where we will have worked through these supplies and we’ll see a more normal season increase in prices,” he said. He said it’s also possible that some of the lambs coming off pasture right now won’t go to a feeder but will go straight to slaughter, which would quicken the process of moving through the current supply.