Market report: ASI report highlights 2024 lamb market conditions
In the February edition of the American Sheep Industry Association’s (ASI) Sheep Industry News, Texas A&M Agricultural Economics Professor and Extension Specialist Dr. David Anderson reports, “Mature sheep slaughter seemed surprisingly large in 2024 because the federally-inspected slaughter was the equivalent of about 4.3 percent of the ewe inventory compared to four percent in 2023.”
This was the largest rate of slaughter as a percentage of the ewe flock since 2021, he mentions, and over the last decade, this percentage has been about 3.8 percent, on average.
According to Anderson, on the lamb and yearling side, federally-inspected slaughter totaled 1.75 million head which was 0.7 percent larger than the year prior. Combined with slightly higher weights in the second half of the year, lamb production was about 2.5 percent larger than the previous year.
Dressed weights exhibited normal seasonal patterns in 2024, peaking in the spring and declining later in the year, according to Anderson.
“What made them interesting was during the first half of the year they were below 2023’s weights, but in the second half of the year they were heavier than in 2023,” he states. “When comparing production between 2023-24, lighter weights helped to offset larger slaughter during the first half of the year, while heavier weights boosted lamb production later in 2024.”
Lamb prices
Anderson also reports lamb prices exhibited little of the normally expected seasonality in 2024.
“The lamb cutout traded between $460 and $480 per hundredweight (cwt) all year until a late slide below $460 per cwt in the last couple weeks of the year,” he adds. “Shoulders, racks and loins exhibited the same flat trading pattern. Normally, different cuts experience different seasonality of prices, either driven by holidays or by production patterns.”
Live lamb prices displayed a more consistent pattern compared to lamb meat, although the fluctuation between the highest and lowest prices was larger than average.
This pattern was observed in both traditional heavier slaughter lambs and lightweight slaughter lambs weighing between 60 and 90 pounds, he mentions.
“The larger range of prices throughout the year suggests some increase in price volatility compared to past years,” he states.
Anderson examined the average standard deviation and coefficient of variation as measures of volatility using weekly prices each year from 2020-24, which reveal some interesting results.
“The standard deviation and coefficient of variation of prices in 2024 was not nearly as volatile as in 2022,” he reports. “But 2022 was the year prices collapsed from very high to terribly low levels, creating the appearance of more volatile prices.”
He explains price volatility looks a little different depending on the data used, as auction market data for 100- to 150-pound lambs indicates little difference in price volatility measured using the coefficient of variation in 2024 compared to other years since 2020.
“For 60- to 90-pound lambs, little difference is noted for data from San Angelo, Texas and Sioux Falls, S.D. auction market reports. However, Fort Collins, Colo. prices indicate a little more volatility in 2024 compared to 2020-23,” he adds.
The U.S. Department of Agriculture’s Agricultural Marketing Service’s 352 national negotiated slaughter lamb report indicates a little less volatility than the last five years, but it is worth noting much of the data for 2020 was not available due to confidentiality rules, the article reports.
Imports and supplies
Anderson explains, “Imports continued to be above a year ago, adding to lamb on the market. However, lamb imports did decline later in 2024 but remained above the prior year.”
In 2024, Australian lamb leg prices rose above American prices, which may lead to a reduction in imports.
Earlier in 2024, relatively lower Australian prices compared to domestic prices increased imports.
Supplies of lamb and mutton in cold storage have remained low, while reduced stock levels, along with increased domestic and foreign supplies, suggest a positive trend for lamb in the market.
“Although there is some uncertainty in the cold storage data, overall lower cold storage stocks are better for prices,” he concludes.
Melissa Anderson is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
