Risk High, Downside Extreme as Lamb Prices Move Toward FallWritten by Brad Anderson
By Mountain States Lamb Cooperative/Mountain States Rosen Livestock Supply Manager Brad Anderson
Hello sheep enthusiasts – I hope everyone has survived lambing season and this interesting spring that we have had this year. It seems that between cold spells, snowfall and floods, producers from the Dakotas to Washington have had a frustrating time this spring.
It looks like the crops in these areas may be 10 to 15 percent lower than last year due to inclement weather. Also, droughts in the southern states like Oklahoma, Kansas and Texas have pushed producers to cull ewes and put lambs on feed at a lighter weight due to feed shortage. This will, in turn, prove to cause higher costs of gain and lighter lambs at slaughter. The most disastrous aspect is the liquidation or reduction of ewe flocks due to high feed costs and limited forage. This will, in turn, hurt our future lambs supply numbers and keep the lamb industry in a very volatile state.
The pelt market is still in a favorable position for the short term, but the market has seen some resistance concerning future sales. Therefore, a projected relief of five to 10 dollars per pelt is expected as we reach the fall months. This should leave a return of $15 to $20 for good quality pelts in the fall.
Even though meat sales have seen some price resistance in the past few weeks, the lamb market still has a strong outlook over the summer months due to an industry shortage in live numbers. Fat lambs and feeders are at an all-time high, and prices look to remain strong. The big question is, can the live, carcass and box prices support the high feeder lamb prices as we move into the fall marketing period? Risk is high and the downside is extreme if the market starts to slide due to inventory, pelt values and the influx of import products from New Zealand and Australia. There are several unknowns at this point to relieve a healthy amount of concern for risk on feeding lambs into the fall and early winter.
The Mountain States Lamb Cooperative (MSLC) will announce its two millionth lamb marketed at the annual meeting this summer, and this is a true testament to the perseverance and loyalty that the MSLC members have to our organization. Our members not only raise some of the highest quality lambs in the nation, but they also are committed to delivering day in and day out to help make this co-op great. This will be a great example of the solidity of the co-op and its members and will prove how steadfast we will be in the future.
The MSLC annual meeting is set for July 20-22 in Loveland, Colo. We hope to have a great turnout that will allow us to discuss the past events of the lamb industry and what our goals, strategies and expectations will be for the future. It is my hope that all of the members are able to attend and share in the discussions to provoke industry excitement, growth and what the forethought of the Cooperative and industry should look like.
Have a great summer.