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The average person in the United States consumes less than one pound of lamb per year. I, for one, am doing my part to increase the average. I am certain that I consumed more than one pound of lamb in January alone. Let’s take a look at the overall market outlook for lamb this year. We will look at supply, demand and trade in projecting the market outlook.

In 1990 there were 7.6 million breeding ewes in the U.S. As of the Jan. 1, 2016, USDA numbers would indicate we are at 3.1 million breeding ewes. That represents a decline of 4.5 million ewes since 1990. 

Recently the American Sheep Industry started a “Let’s Grow” initiative to try and stem the tide of decline of sheep numbers.  Over the last two years it seems to be helping. While the overall U.S. number has not increased yet, it has leveled off the last two years without further contraction. 

Here in Wyoming we are doing our part as we increased the number of breeding ewes by 2.4 percent in 2016. It will be interesting to see if the Let’s Grow initiative is able to turn the corner and create some growth in the overall industry.

Another important factor when looking at the supply side of the sheep equation is to determine if lambs in the feedlot are current. When supply starts to outstrip demand in the sheep industry, lamb feedlots tend to feed lambs to heavier weights as they have no place to go with the finished product. In looking at the current slaughter data, 2015 trended below the five-year average for slaughter weight, which is a good sign for the industry.

Demand for lamb can be captured by looking at both consumption and consumers willingness to pay.  U.S. consumption per capita continues to decline.  In 1992 per capita consumption was 1.34 pounds.  Consumption for 2015 was at 0.99 pounds and is projected to decline to 0.94 pounds per capita in 2016. 

On the price side, retail lamb prices were slightly higher in 2015 than the five-year average and are starting slightly higher than the average in 2016. Given that consumers are eating slightly less lamb per person but paying slightly more for the lamb they consume, it would appear demand is currently relatively stable for lamb.

Looking at the trade situation, we primarily focus on Australia and New Zealand. These countries are responsible for the bulk of the U.S. imports of lamb.  One of the major factors in this trade relationship is the relative strength of the U.S. dollar. As U.S. dollars become stronger, we are able to buy more Australian and New Zealand lamb for the same amount of money. 

Currently the U.S. dollar is relatively strong compared to the Australian dollar and is continuing to strengthen. This will be a challenge for the sheep industry. The only bright side is that Australia is currently recovering from a drought, which has restricted the amount of lamb available for them to export.

One additional area for concern for sheep producers to be aware of and monitor into 2016 is the amount of lamb in cold storage. Increasing amounts of lamb in cold storage may be an indicator of softening demand. Currently, the trend is that lamb in cold storage is significantly above the five-year average. The average December inventory of cold storage is 18.4 million pounds.  December 2015 inventory of cold storage was at 41.4 million pounds.

Based on the factors listed above lamb prices are expected to decline slightly from 2015 prices.  It is expected that we will see a five percent decline in price this fall as compared to the fall of 2015.

Bridger Feuz can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

The USDA Risk Management Agency (RMA) administers federal crop, livestock and range insurance programs and offers products to producers based on the five areas of risk to an operation: marketing, financial, legal, human and production.
“Traditionally our areas were corn and soybeans and multi-peril insurance for farmers, but, over the last couple farm bills, Congress has realized we need to offer products to ranchers, and that’s how we ended up with new products,” says Tara Beley of the USDA RMA Billings Regional Office, which serves Montana, Wyoming and the Dakotas.
Of why to consider insurance, Beley says, “Our livestock products can help livestock producers mitigate risk just like a corn producer by helping to address marketing issues, setting a price floor to protect a price, and they’re also used to address production. Our products can help protect against weather and pests, and there are some financial issues, too. Some lenders like to see crop insurance, and having insurance can help participation in some programs, like with the Farm Service Agency.”
She adds that, although useful in some cases, insurance products aren’t right for every operation.
“It’s important to evaluate production and finances on your operation, and insurance products are one of many things to help you be more profitable,” she says.
Explaining the five areas of risk, Beley says risk management strategies in marketing help with decisions that turn products into revenue, like contracting, niche marketing, futures and options or insurance products. Legal risk includes contracts, tax issues, bankruptcy and succession issues. Production risk encompasses weather, pests and diseases, while financial risks are composed of impacts to profitability, credit cards, credit scoring, debt management, lending/borrowing and budgets. Human risk is that involving human error, farm equipment issues, the affect of pesticides and herbicides and marketing decisions.
Beley says there are two basic types of livestock insurance – Livestock Risk Protection (LRP) for feeder cattle, fed cattle, lambs and swine and a Livestock Gross Margin (LGM) product, which is available for fed cattle, dairy and swine.
“LRP only takes price into account, and LGM takes input into consideration,” explains Beley. “LRP is a tool to insure against unexpected market price declines during a selected insurance period based on the Chicago Mercantile Exchange (CME). Producers can lock in a price and protect against downward movement on the CME, with no basis adjustment for local price.”
“You’re setting a price floor based on the price you lock in, and you can take advantage of upward market movement,” she continues.
To determine what price to lock in, a tool on the RMA website shows how much a producer will pay for what price. Producers select an insurance period running from 13 to 52 weeks, although not every period is available for every product. Beley says that, typically, 13-, 26- and 52-week time periods are most frequently used.
“The dates correspond to when you anticipate your livestock will be sold, and a maximum of 1,000 head may be insured under one specific coverage endorsement,” she says.
To put livestock insurance in place, producers make a one-time application with a livestock insurance agent, who can be located through the RMA website. The application is submitted to the insurance company for approval, and a producer must purchase at least one specific coverage endorsement to lock in the price and coverage level.
“When purchasing the product, a producer will determine how many head and the date and weight he expects to market the livestock, and he’ll also choose the coverage price and endorsement length,” says Beley. “The coverage price can be from 70 to 100 percent of the price.”
A producer collects indemnity if the actual ending value on the livestock’s delivery date is lower than the price they locked in when they purchased the product, minus their premium and adjustments for market considerations such as sex, Brahman or dairy influence. The actual live selling price is not considered, and fed cattle must be Yield Grade 1, 2 or 3, and Select or higher in quality grade.
Christy Martinez is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Denver, Colo. – With consumers credited for driving the success of the beef industry Eric Baumgartner, executive vice president of global marketing agency VML, says, “People are developing around brands. We need to think about that with beef.”

“Consumers want their brands to get personal. They are demanding it,” he continues. “And data currency – the information we get from consumers – is something we need to consider.”

Purchasing decisions

As the world changes and technology advances, Baumgartner says that the way people buy products has changed, which is something the agriculture industry must consider.

“Shopping yesterday used to be perusing up and down the aisles of a shopping center or local market,” he explains. “We might have a list, or we see a product and buy it.”

Today, that strategy has changed, and often, shopping is done from a tablet, smartphone or computer.

“Sometimes, we don’t even know we’re shopping,” Baumgartner says. “A recent statistic says that 75 percent of people watching TV have a device in their hands at the same time. This is a remarkable change from five years ago.”

“As we are using multiple screens simultaneously, it becomes really critical when we think about shopping behaviors,” he explains.

Shopping changes

In today’s shopping scene, many things have changed from 20 years ago.

“There is more to buy, and by that, I mean there is greater access to stuff,” Baumgartner explains. “I have access to every product made through a single device. That’s huge.”

At the same time, prices are dropping as products are commoditized.

“There are more ways to compare products, too,” he says, mentioning that many people go to brick-and-mortar stores like Best Buy, then purchase the TV they are looking at on Amazon instead.

In addition, there are increased delivery options, including grocery store delivery to home options.

“The bottom line is, this is our new reality, and it’s a hard thing for producers to get our heads around,” Baumgartner says. “Consumers rule – period. It didn’t use to be that way, but it is today.”

“What buyers want, when they want it and the price they want it for are all up to the consumer,” he adds. “There are ways around it, though.”

Technology impacts

In parallel with shopping, technology has dramatically transformed.

“Technology has literally changed our outlook on the world,” Baumgartner says. “Movies from 10 years ago predicted technology for 2043, but those technologies are here today.”

A number of new technologies today are both alarming and important to embrace, he adds.

“GPS can be used by our phones to determine where we are at any given point in time,” he explains. “It is so accurate that it can tell if we’re standing in front of a meat counter at the grocery store.”

Tracking and identifying that information allows marketers to provide instant access to coupons or promotions that are specific to the location.

“I can serve ads to consumers to suggest they try a porterhouse, for example,” Baumgartner says.

“Our phones are also constantly listening,” he continues. “Even when they’re off, our phones are still listening.”

Cell phones pick up on key words and use that information to also target advertising.

“I had a friend who was talking about a Peloton stationary bike,” Baumgartner says. “Guess what kind of ads he started getting on his phone? Ads for Peloton bikes. His phone heard the conversation around Peloton and started serving him related ads.”

Finally, targeting brings the technology together. When people shop online, data is recorded and then brings advertising related to those shopping experiences to all sites they visit.

“We are targeted,” Baumgartner explains. “Targeting takes in the content we look at, read, watch or listen to and customizes a marketing message that meets criteria instantaneously to where we are.”

“This is amazing technology,” he comments, “and there’s even more interesting, cool technology out there.”

Using the data

“Through all of this, there is a fine line between creepy and helpful,” Baumgartner says, “but we can use this technology to our advantage.”

Many companies have seen successes in marketing their products through social media and using data and insights from online.

As examples, Baumgartner said that Wendy’s used social media data to compile an advertisement video featuring words used by actual consumers. Their video, featuring the pretzel bacon cheeseburger, captured audiences and resulted in the sale of millions of burgers.

“Gatorade took an amazing opportunity and used Snapchat,” he explains. “They were able to capture their target audience, elite high school athletes, and do it at a fraction of the cost. They saw a 10 percent increase in sales the next day.”

“People are developing around brands, and that’s something we need to think about with beef,” Baumgartner says.

Baumgartner spoke during the 2017 National Cattlemen’s Beef Association Summer Convention and Trade Show, held in mid-July 2017.

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Cheyenne – Assistant Deputy Attorney General Liz Gagen confirmed June 2 that the Wyoming Attorney General’s Office has joined counterparts from across the nation to take a look at the pending merger between JBS-Swift, National Beef Packing Co., Smithfield Beef Group and Fiver Rivers Ranch Cattle Feeding.
    Unsure on the exact number of AG offices involved, Gagen said, “As of last week it was approximately 20.” Of the reasoning behind their decision to become involved she said, “We were just interested. It sounded like a lot of people were concerned.”
    Gagen was unsure if her agency would have access to the same information now being reviewed by the U.S. Department of Justice (DOJ), but referred the Roundup to the National Association of Attorneys General. Unfamiliar with this particular case, Emily Myers from the association said a process established 15 years ago allows parties to sign off on what’s called “pre-merger disclosure.” If the parties don’t agree Myers said discovery has to occur through a compulsory process, the courts direct discovery. Generally speaking, Myers said the information submitted to the DOJ is completely confidential, even from the attorneys general.
    JBS-Swift spokesman Chandler Keys told the Roundup June 3 that he wasn’t aware of the DOJ or the state AGs contacting them for release of materials that have thus far been provided to the DOJ. Of the AGs involvement he said, “The vast majority get involved, they write a letter to DOJ and that’s about the end of it.”
     Other attorneys general from across the nation have been making headlines in recent weeks with their intentions to review the merger. Oklahoma AG Drew Edmondson called the additional consolidation in the packing sector a “mega merger” and said it could have harmful effects on his state’s livestock producers. According to the Livestock Marketing Association, Edmondson said his state could be particularly impacted by the acquisition by JBS of Smithfield Beef Group’s Five Rivers Ranch Cattle Feeding, LLC, considered the world’s largest cattle feeding operation. That’s because Five Rivers operates five feedlots in southwest Kansas, and the Oklahoma and Texas panhandles. If the merger goes through, Edmondson wrote U.S. Attorney General Michael Mukasey, “Oklahoma producers could see a packing market with fewer buyers, and one of these buyers may have a limited need to buy cattle because it owns the feedlots.”
    North Dakota AG Wayne Stenehjem is also among those expressing concern noting the merger’s potential to reduce competition and in turn prices received for cattle.
    According to R-CALF USA Vice President and Wheatland cattle feeder Randy Stevenson, state AGs can challenge the mergers if it’s approved by the DOJ.
    Jennifer Womack is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

As the U.S. cattle herd continues to shrink, the beef market will respond with tightening supplies for at least the next couple years, according to a University of Nebraska extension livestock economist. Kathleen Brooks recently presented a webinar on Beef and Cattle Market Considerations Moving Forward.

Supply and demand

The USDA supply and demand report on Jan. 1, 2013, reported the beef cattle supply was down three percent in the United States to 29.3 million head. This is the lowest number of beef cattle reported in the U.S. since 1940. 

However, the report also showed 1.9 percent jump in heifer replacements in 2013 over 2012. 

“We haven’t seen heifer replacement numbers this low since the 1990s,” she said. “The question is, are we trying to rebuild our herds, or are we culling more beef cows and replacing them with younger cows that may be more cost-effective?” 

“Culling more older cows will add more youth to the herd. There will also be more opportunities with heifers as we move forward throughout the year,” she added.

Brooks is concerned how the reduced supply will affect demand for beef and, ultimately, beef prices. 

The higher prices for beef the last three years are a result of per capita in meat supply, she said. The per capita consumption of beef and most other meat products have declined. 

“The per capita of beef has been declining since 1997,” she said. “In 2012, it was the lowest it has been since 1991.” 

With less meat available to consumers, prices for the product are climbing upward. While the weather and corn yields have the capability to reduce beef prices, if producers start trying to rebuild the beef herd, less heifers will be on the market which may hold supplies down. 

Concerning factors

Brooks reported that exports are still on the rise. 

“Exports have been increasing since 2004,” she said. “We were a net exporter for beef in 2012. The export market makes up roughly 10 percent of our production.” 

However, Brooks is concerned if this trend will continue. 

“Our domestic dollar is shrinking, while prices are increasing,” she said. “It is having an impact on how much beef is exported.”

Tightening supplies also have Brooks worried. 

“Tightening supplies are forcing us to have less per capita beef available for the consumer. The question remains whether consumers will have enough money to continue paying higher prices for beef,” she explained. 

Factors like unemployment and increasing payroll taxes will have a part in determining what happens, she noted. 

The chicken and pork industries are also trying to encourage their producers to increase production. 

“They are more competition for beef, because they are cheaper meats,” Brooks said. “It will be questionable whether we will be able to keep our prices above $200 per hundredweight for boxed beef cutout value.”

Going forward

Whether or not cow liquidation continues from the drought will also be a determining factor in the market. 

The forage supply in the U.S. has been tremendously reduced by the drought conditions, although it has somewhat rebounded in recent weeks from all the moisture received lately. 

Hay stocks are at their lowest since 1957, Brooks said. Hay acreage is also decreasing, as some of those acres are converted to corn.

In the Great Plains region, where about 30 percent of the U.S. cowherd is based, range and pasture conditions are still rated at about 80 percent poor or very poor. 

“I doubt we will see a lot of herd rebuilding in this area for at least another couple of years,” Brooks said. 

In fact, most producers in those drought-stricken areas are focused on sustaining their herd through this year so they will be in a position to expand when the market improves and range conditions are better.

Cattle markets

At the beginning of 2013, analysts projected it to be the last year cow/calf producers would see record high returns. Now, those returns look even less promising, Brooks said, depending upon whether the corn crop is planted and how cow/calf producers approach cost management in response to the drought. 

The question about which direction beef demand is headed will drive how much slaughter steer prices will fall, Brooks said. 

Currently, the cost of gain is an estimated $100 to $110 per hundredweight. Brooks said feeders may see some slight declines in the break-even costs if the corn crop is planted in a timely manner.

If corn prices decline, steer prices may maintain or rise, she added. 

Gayle Smith is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..