Lamb Co-op continues success
With more than 1.8 million lambs marketed since December 2001, Mountain States Lamb Cooperative (MSLC) can boast that each producer has been paid on time and in full.
In February 2003 the Co-op began its full marketing program, following the purchase of 50 percent of B Rosen and Sons, which formed Mountain States Rosen (MSR). In September 2008 the remaining half of MSR was purchased and, subsequently, veal supplier Formula One Feeds was brought on as a minority partner at just over seven percent.
According to Mountain States Director of Finance and Operations Becky Gitthens, membership is still available in the Co-op, even though all marketing shares have been sold.
“Membership is a one- time fee of $350. New members purchase marketing shares from existing members, and the Co-op can facilitate that process,” she explains. “Lambs can also be marketed through Co-op by leasing shares from current members.”
“Our meat company, MSR is doing very well under the capable management of MSR’s CEO Dennis Stiffler,” says Gitthens. “Despite record lamb prices, the company is performing well and is optimistic about the opportunities and future for domestic lamb.”
“Our meat company had a good year, as far as dollar volume,” says MSLC Chair Frank Moore of Douglas. “The markets are really good right now for all lamb producers – I would say record highs. It’s working for our members, as well as non-members, and while the high prices are good for producers selling lambs, the concern is it may lessen consumer demand. Right now it doesn’t seem to have had much of an impact, but that’s always a concern any time we get high prices. If we suddenly had an oversupply, we’d have to worry about a sharp decline in the market. We’re happy with the high markets, but cautious.”
“Because of the success of MSR, MSLC was able to declare a two-dollar-per-share patronage dividend on lambs marketed in 2009. The book value of shares in MSLC also appreciated significantly because of the performance of the Co-op and the meat company,” explains Gitthens. “The total return on shares has made the initial $22 per share a solid investment for producers, besides providing them with the security of knowing they can market their finished lambs timely, while in optimum condition. Most producers believe the market access, particularly when there is a period of oversupply in the market, has paid for the shares several times over.”
“MSLC is the place for quality lambs,” states Gitthens. “We offer significant premiums for yield grade 2 and 3 lambs, and we also have a natural program that provides price incentives to those members who raise natural lambs.
In addition, through the volume marketing arrangement with Nugget International, the Co-op can offer competitive pelt credits. Producers also benefit from competitive harvest costs and offal credits through volume slaughter agreement with JBS Lamb in Greeley, Colo.
MSLC members operate in 14 states, but about 60 percent of them are from Wyoming, and Gitthens says membership has grown every year since inception.
“We’re starting to see more of our producers interested in retaining ewe lambs and building some herds,” says Moore. “With the high prices, it’s hard to hold onto ewe lambs, but we do see some optimism and people starting to think about building their numbers, because we’ve had good markets for a while.”
“We’re pushing our members, encouraging them to build their numbers, because we’re optimistic about the future,” adds Moore.
“Member and non-member lamb producers believe MSLC has brought needed transparency to the lamb industry and less volatility through fair market competition,” notes Gitthens. “It’s a great time to be in the sheep business, and the outlook remains very strong. We’d like to visit with producers about the possibilities for increasing their profitability.”