Sheep market timing
Call me superstitious, but with the recent rainfall of the past week it’s probably bad luck for me to talk about anything related to sheep management during a drought. The grass is growing, and hopefully June will yield more puddles.
In addition to the recent precipitation, I’m grateful for the strong sheep markets we’ve experienced over the past two years. I won’t speculate on the recent “backing off” in lamb prices with the pace at which things change in the sheep business.
The fact is, we’ve been riding a wave of unchartered waters, especially with the resurgence in consumer taste for lamb. Yes, high feedlot inventories have me concerned, as do the implications of Irish lamb imports, inflation and of course the never-ending geopolitical unrest.
But, just like the threat of predation on the flock, there will always be uncertainty with lamb market dynamics. Still, there are a few seasonal trends and calendar events which can help put us in the driver’s seat.
Historically, seasonal increases in demand for lamb can affect the price received for live-animal sales. The Christmas holiday and Easter markets have been periods where demand for lamb is highest for traditional marketing strategies, but we can’t ignore the important ethnic holidays during the summer.
Marketing tools and strategies
Ideal market timing for an individual producer is determined by a combination of price expectation and cost of production. The seasonal price index is a tool to help understand the relative price expectation part of the equation.
According to U.S. Department of Agriculture data compiled by the Livestock Marketing Information Center, there is an increase of six percent from August to November for 60 to 90-pound lambs but a 22 percent increase from August to February.
Many don’t have the resources to hold onto lambs later into the fall for various reasons, even with the incentive of the seasonal price increases. Sometimes production calendars are set in stone, and it’s critical, as an individual producer, to understand the differences in production costs associated with the different market timing decisions.
For example, the “traditional” lamb market, the “ethnic market,” is closely tied to a more specific set of religious holidays where lamb is frequently consumed. Timing the marketing of both ewes and lambs in advance of these specific holidays can often result in greater prices, especially when located closer to larger ethnic communities (E.g., Denver metropolitan area.)
Operation adaptations and network building
In addition to marketing strategies, adapting major on-farm production events such as lambing, weaning and culling of breeding stock around these holidays can be economically strategic. Remember a strength of the ethnic market is the demand for all classes of sheep (E.g., older ewes and rams, intact ram lambs, undocked lambs) which may be discounted by traditional commodity marketing channels.
Building networks with ethnic communities to determine what weights and classes of sheep they’re looking for can further inform production strategies.
Ever changing market dynamics across a diverse sheep industry will continue to create challenges and opportunities. Even amidst the historically high sheep prices, a proactive marketing strategy is required.
Adding value to the industry
As costs of production continue to increase, strategic marketing strategies maximizing revenue per animal will become more important. Emerging ethnic market opportunities capitalizing on market timing in advance of major holidays also can add value to sheep operations in Wyoming and the surrounding region.
Taking time to revisit strategies whether it be through continuing education, ranch tours and more frequent conversations with colleagues. These are all good ways to stay responsive in the face of uncertainty.
The summer meeting of the Wyoming Wool Growers on July 13 and 14 in Wright will be one of those valuable opportunities. Ranch tours, market outlooks, enterprise budget workshops and networking opportunities will make for time well invested.
Whether you’re raising 50 ewes or 10,000, there is tremendous value in being a part of this industry organization. We hope to see you in Wright!
Whit Stewart is a professor and the University of Wyoming Extension sheep specialist, and Bridger Feuz is a livestock marketing specialist. Whit can be reached at firstname.lastname@example.org.