ASI reports U.S. lamb markets are looking up
By many accounts, a few positive factors in the lamb marketå up as it moves into the second half of the year.
Although some supply reduction – compared to the five-year average – was reported earlier in July, the overall supply situation has improved, domestic slaughter has increased from year-ago levels and certain markets are seeing prices strengthen.
In the August 2023 Sheep Industry News, published by the American Sheep Industry Association (ASI), Texas A&M University Economist David Anderson notes meat production and lamb and yearling slaughter hit their annual seasonal peaks in March and April during the Easter holiday season but have since gone their separate ways.
Lamb and yearling slaughter still remains higher than a year ago – up 5.5 percent, on average, from a year ago and 3.8 percent above the same time period, as of the six weeks prior to July.
However, year-to-date meat production is roughly 0.5 percent lower than last year and three percent lower than a year ago, as of the six weeks prior to July.
“The difference between slaughter and production is, of course, weights,” Anderson explains, noting federally-inspected dressed weights have been below last year for the majority of the year.
Imports and storage
The July Monthly Lamb Market Summary, published by ASI and the American Lamb Board (ALB) on Aug. 9, notes American lamb has taken over a larger share of total U.S. lamb supplies because of a reduction in import volume.
The two organizations report during the first half of the year, lamb imports totaled 110.9 million pounds on a carcass-weight basis, which is 27.1 million pounds or 20 percent less than last year and nine percent less than 2021.
Import volumes from Australia and New Zealand – which account for nearly 99 percent of U.S. imports, according to the U.S. Department of Agriculture – through June were below a year ago, down 18 percent and 24 percent, respectively.
“For June, lamb imports were down 22 percent or 5.2 million pounds from 2022,” reads the monthly summary. “Imports of mutton at 29.5 million pounds for the January to June period were down 23 percent from last year. Year-to-date lamb and mutton imports totaled 140.4 million pounds, compared to 176.2 million pounds last year.”
ASI and ALB also report lamb and mutton stocks in cold storage in June were at 24.8 million pounds, up 8.9 percent from last year. However, stocks still remain below the five-year average, which is around 35 million pounds for the month of June.
According to Anderson, heavyweight slaughter lamb prices and the national negotiated live slaughter lamb price have both seen increases since the beginning of the year.
He notes reports from Sioux Falls, S.D. show prices for heavyweight slaughter lambs, or lambs weighing 100 to 150 pounds, increased from $133 per hundredweight (cwt) at the beginning of the year to $208 per cwt during the first week of July. This is a 68 percent increase from the same time last year.
Likewise, the national negotiated live lamb price has climbed to $182 per cwt, which is equal to a year ago.
“Other markets have not fared as well, with prices flat to lower since Easter and continuing to be lower than a year ago,” Anderson states. “In early July, wooled and shorn lightweight slaughter lambs from 60 to 90 pounds in San Angelo, Texas, were about $210 per cwt, which was about 85 to 95 percent of their price a year ago.”
“Prices for the same weight slaughter lambs at New Holland, Penn., averaged about $276 per cwt in early July, which is 10 to 20 percent lower than last year,” he adds.
On the meat side, Anderson explains wholesale cutout prices have drifted lower, with racks declining dramatically in recent weeks from $11.88 per pound to $10.53 per pound. Additionally the cutout value has declined from $431.45 per cwt during the middle of the year to a recent $120 per cwt, which is below a year ago and $40 per cwt less than in January.
Retail prices have been volatile with the average retail price in April around $8.03 per pound, rising to $10.30 per pound in May and then falling to $8.20 per pound in June.
“Larger slaughter than a year ago is likely keeping some pressure on live lamb prices, while reduced meat production is helping to keep lamb meat prices higher,” Anderson says. “Slaughter is likely to decline seasonally in coming weeks while light average dressed weights cuts production. This combination should work to boost live prices.”
As far as the wool market goes, Anderson notes the 2023-24 marketing year has begun, with the last marketing year ending on price slumps across all grades.
“For example, 21-micron wool quoted in U.S. dollars per pound was $3.91 per pound for the week of June 30. This was 16 percent below the same week a year ago and seven U.S. cents per pound below the week before,” he says.
“Finer-quality wools experienced larger week-over-week price declines than did coarser wools. For example, 17- and 18-micron wool declined by more than 20 U.S. cents per pound, while 26 and coarser wools declined from one to four U.S. cents per pound,” he adds. “There continues to be large supplies on the market, pressuring prices lower.”
Anderson continues, “As usual, week-to-week fluctuations in exchange rates do impact relative prices between the U.S., Australia and other countries. But, likely more important to overall price levels are expectations for consumer demand.”
“Some countries continue to struggle with weak economies and relatively high inflation rates. Expectations for better economic growth in Europe and China would likely improve prices, but those positive expectations have been lacking,” he concludes.
Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to email@example.com.