Seeking assistance: WWGA submits several CFAP recommendations for sheep industry
In a Wyoming Wool Growers Association (WWGA) newsletter published July 6, WWGA notes the Coronavirus Food Assistance Program (CFAP) hasn’t been a big help to sheep producers impacted by the economic consequences of the COVID-19 pandemic. Therefore, the association has been hard at work pushing for additional help for the industry.
“We have been working with the governor’s office and the Joint Ag Committee in the hopes of developing an agriculture-specific relief package for Wyoming’s agriculture community, including a specific provision for sheep ranchers which will be available by fall when the impact of the decline in market prices is expected to be felt by Wyoming agriculture producers,” says WWGA.
Establishing a working group
As part of their initiative, the association has established a working group to develop recommendations on how to provide assistance to Wyoming sheep producers.
WWGA explains, “The working group developed recommendations based on Ag Committee discussions in early June. The recommendations would provide a stipend to producers to address a loss of income resulting from the COVID-19 restrictions by covering a portion of the costs associated with sheep production that are not already addressed by CFAP.”
They explain the working group has a two pronged approach intended to create a one-time stipend to offset some of the costs of harvesting wool in 2020 and to provide some relief for the annual cost of raising breeding ewes in Wyoming.
Wool considerations
“Wool sales are a key component in the cash flow of a sheep operation,” states WWGA. “They help pay the costs associated with harvesting wool, including shearing costs, wool bags and the transportation and storage of wool.”
The association goes on to explain COVID-19 brought an already slow wool market to a virtual halt, removing this vital cash flow from sheep operations.
Although wool is included in CFAP as an eligible commodity, WWGA notes the cut-off date eliminated much of Wyoming’s 2020 clip from this eligibility. Therefore, many producers in the state haven’t been able to sell their 2019 or 2020 wool harvests.
To compensate for this, WWGA proposes a business relief stipend, which would cover a portion of the wool harvest cost for producers.
“As suggested by the Ag Committee, we evaluated stipends of 20, 25 and 30 percent of the average price of wool per pound in 2019, which USDA NASS indicates was $2.70,” explains WWGA.
Therefore, the respective amounts would be 54 cents per pound at 20 percent, 68 cents per pound at 25 percent and 80 cents per pound at 30 percent.
“Based on the average fleece weight in Wyoming in 2019 at 8.8 pounds, we estimate the total cost for this portion of a proposed wool harvest stipend to be between $1.2 million and $1.75 million,” says WWGA.
Lamb production recommendations
WWGA notes with a loss in lamb market, the lamb backlog has grown rapidly, affecting market recovery. They point out COVID-19 shut down orders not only damaged markets and reduced income for ranchers, it also added additional costs to raising sheep.
These costs include providing additional feed for lambs held for slaughter, as well as potential for a greater loss of livestock resulting in the loss of an adequate labor force to address health needs and predator losses.
“COVID-19 related travel restrictions prevented many ranchers from getting laborers during the critical season of lambing and summer grazing,” states WWGA. “In addition, other production costs have increased, including transportation costs due to limited truck drivers as well as delays and backorders for equipment parts affecting production activities.”
Therefore, under the lamb production portion of their proposal, WWGA proposes another business relief stipend based on the inventory of breeding sheep, older than two years of age, which would help to fill the gap left by CFAP and the loss in revenue resulting in COVID-19 shutdown orders.
“Based on USDA NASS numbers, Wyoming has 265,000 breeding sheep, and research from the University of Wyoming indicates the average annual cost to run one ewe in Wyoming is $100,” says WWGA.
Given this revenue loss, WWGA proposes a stipend of $25 per head, which would equal 25 percent of the cost of running a ewe every year.
“We estimate this portion of the relief program to run about $6.625 million, which is 25 percent. If the percentage is reduced to 20, the cost would be approximately $5.3 million and if increased to 30, it would be 47.95 million,” the association explains.
If adopted, WWGA estimates the total cost of this program to be between $6.5 and $10 million.
Recommendations accepted
Following the proposal, WWGA notes the Ag Committee accepted their recommendations favorably.
“While it remains to be seen if an ag specific program will be established, we recently learned the Ag Committee included the sheep industry in their proposal to the governor,” says WWGA.
Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
