The Livestock Marketing Information Center (LMIC) published an update on Nov. 10 on the sheep and lamb market, showing a seasonal climb in slaughter rates and an increase in lamb cutout value prices.
Weekly slaughter for lambs and yearlings has increased in the past few weeks to at or above 30,000 head since August, with recent weeks at 32,000 head to over 34,000 head—an 8-9% increase over last year. According to LMIC, year-to-date weekly slaughter rates through October are tracking more than 3% above the same period in 2022.
Despite the higher weekly lamb and yearling slaughter, lamb and mutton production has decreased by approximately 2.5%. LMIC attributed the decline to a decrease in dressed weights. Dressed weights have been at or below 60 pounds, which is lower than the five-year average of 62-65 lbs., and below last year for this time of year.
Weekly slaughter prices (national, negotiated, live) have been steady at around $200/cwt since last July. Despite steady prices, they are an increase of $70/cwt over last year.
“Seasonally, slaughter lamb prices start to move lower during the second half of the year, but prices have remained counter-seasonally higher,” LMIC said. “Strength in slaughter lamb prices is linked to strength in the lamb cutout value.”
Tyler Cozzens, agricultural economist at LMIC, told WLJ thatfourth quarter slaughter lamb prices are forecast at $191-193/cwt. With the Easter holiday falling earlier than usual on March 31, 2024, prices are expected to remain strong during the first quarter of 2024, with a forecast of $192-195/cwt.
Lamb cutout values have been gradually increasing since July from about $430/cwt to more than $470/cwt, an increase of 9.3%. LMIC said the strength in the cutout value is attributed to increases in the shoulder, leg and loin values. Shoulder prices have risen 13% to $410/cwt in early November from $360/cwt in July. Prices for loin have also increased 13% since July to $697/cwt. Leg prices have increased 11% since July, going from $416/cwt to the early November price of $461/cwt. Rack prices remained steady for the last weeks of October at $1,100/cwt.
Cozzens said cutout values are expected to remain around $460-470/cwt through the holiday season, bolstering lamb prices.
The only downside to the update was for feeder lamb prices. The prices for the three-market average in Colorado, Texas and South Dakota for lambs averaging 60-90 lbs. have declined in recent weeks to $180-190/cwt from a September high of $225/cwt. Typically, feeder lamb prices trend higher through the end of the year. — Charles Wallace, WLJ contributing editor
