This past year was a challenge for agriculture, the sheep industry notwithstanding. The closure of the second largest processing plant, disruptions during peak spring holiday demand, and higher feeder lamb prices led to a year of ups and downs for American sheep producers and processors.
“COVID-19 made changes to the way U.S. consumers purchased and consumed lamb in the past year,” said American Lamb Board (ALB) Chairman Gwen Kitzan in a press release. “Typically, heavily reliant on the foodservice industry, 2020 saw American lamb make its way into the home kitchen as restaurants, especially fine dining, were forced to close temporarily or even permanently.
“To make matters worse, the pandemic hit in the midst of peak spring holiday demand and when one of our main processors was forced to declare bankruptcy. But, we came together as an industry and we came through it with renewed vigor.”
A check-off funded report titled 2020 Sheep Industry Review commissioned by ALB and compiled by the American Sheep Industry Association highlights the industry in 2020 and going forward into this year.
Total sheep and lamb inventory was down 1 percent from 2019 levels with 5.2 million head. There was a slight decrease in breeding sheep levels from 2019, with 3.81 million head as of January, a decrease from 3.82 million.
According to the report, prices for replacement stock were higher overall in 2020, with aged ewes leading the way, while the value of yearling ewes dropped.
Texas ranked No. 1 in inventory, with breeding ewes at 445,000 head and total sheep and lamb numbers as of Jan. 1, 2021, was 730,000 head, a -0.7 percent decrease from 2020. Colorado posted the largest increase in ewe numbers of 8.3 percent or 13,000 head to 169,000. The top 10 states for breeding ewes saw mixed numbers with increases in Wyoming, South Dakota and Iowa. The most considerable decrease was in Oregon, with a 4.5 percent decrease followed closely by Idaho and California with a 4 and 3.8 percent decrease, respectively.
Feeder, slaughter market
Feeder lamb (60-90 lbs.) prices in 2020 were up 6.6-9.5 percent across the board for the three-market average (CO, SD, TX), with Sioux Falls, SD, seeing the most significant increase over 2019.
The report cited higher prices due to increased consumer demand and “real and perceived disruptions in commercial lamb supplies” as the cause. Lightweight lambs did especially well with expanded ethnic and direct-to-consumer markets.
Slaughter lamb prices were down 10 percent from 2019 due to COVID-19 disruptions with lower demand from the foodservice industry as the primary reason. Further contributors to the decline included formula/grid slaughter lamb prices—about one-third of the commercial market—which were not reported for the August-December 2020 period.
Live negotiated slaughter prices were up 9 percent in 2020, averaging $162.65/cwt. Commercial lamb slaughter was down 4 percent to 2.2 million head. Lightweight lambs—also called non-traditional or ethnic market lambs—showed very strong prices in 2020, with New Holland, PA, showing double-digit increases in prices from 2019 in all weight classes.
The wholesale market for lamb was buoyed by more robust retail demand and exports to Mexico. Carcass cutout values increased for leg, loin and shoulder cuts but were lower for ribs. Rib/rack prices were down 2 percent, averaging $858.07/cwt. Ground lamb was also down 0.4 percent, averaging $570.90/cwt. Loin prices rose 12 percent to $587.31/cwt. and trotter-off legs averaged $348.60/cwt., up 2 percent. Shoulder prices rose 11 percent to $339.37/cwt.
Federally inspected slaughter numbers especially took a hit during the second quarter due to COVID-related processing disruptions, followed by the Mountain States Rosen facility’s closure in July. According to the report, additional plant capacity eventually alleviated slaughter disruptions, but the plant closure plagued the industry for most of 2020.
Commercial slaughter was down 4 percent in 2020 to 2.2 million head. Federally inspected slaughter numbers were lower by 6 percent to 1.89 million head, while non-federally inspected slaughter was up 8 percent to 324,000 head.
While imports continue to account for a large portion of lamb consumed in the U.S., overall, the value of lamb and mutton imports decreased 11 percent to $802.9 million in 2020. Imports accounted for about 61 percent of the total lamb supply in 2020. Australian lamb imports remained steady in 2020 at 162 million lbs. and New Zealand imports were down 11 percent to 48.5 million pounds.
Exports to Mexico increased 38 percent in volume and 25 percent in value in 2020, led by muscle cuts. Japan and Hong Kong also saw increases, while the Caribbean, Middle East, Central America and ASEAN saw decreases of 40-75 percent. Canada imported 2 percent less lamb and mutton, but live lamb and sheep exports rose dramatically from 109 head in 2019 to 34,112 head in 2020.
The report stated that in 2021, commercial slaughter is forecasted to increase by 2 percent to 2.3 million head and production to increase 3 percent year on year. Total lamb availability is expected to contract by 7 percent, with imports decreasing by 10 percent to 272 million pounds.
In the third quarter, lower supplies are expected to support feeder and slaughter lamb prices in 2021. The Livestock Marketing Information Center anticipates national slaughter lamb prices to increase by 10 percent, averaging $268-278/cwt and feeder lamb prices to grow 7 percent, averaging $200-210/cwt. — Charles Wallace, WLJ editor