Market advisor: Texas drought drops sheep numbers

2012-03-03T16:07:00Z Market advisor: Texas drought drops sheep numbersBy Tim Petry Livestock Marketing Economist NDSU Extension Service The Prairie Star

The U.S. Department of Agriculture’s National Agricultural Statistics Service released the “Sheep and Goats” report on Friday, Jan. 27. The record-setting drought in the Southern U.S. caused a sheep flock liquidation and a lower inventory.

All sheep and lamb numbers in the U.S. on Jan. 1, 2012, totaled 5.35 million head, which is down 2 percent from 2011. The breeding sheep inventory decreased to 3.98 million head, which is down 3 percent from 4.08 million head on Jan. 1, 2011.

Texas is by far the leading lamb-producing state, so what happens there also affects the entire country. On Jan. 1, 2011, there were 515,000 ewes in Texas, which is more than the next two leading states combined (California with 273,000 and Wyoming with 220,000). Due to the record-setting drought conditions in Texas this past year, ewe numbers fell 100,000 head to 415,000 on Jan. 1, 2012.

The total decline in U.S. ewe numbers was 70,000 head, so if Texas would have maintained flock size, an increase in ewes may have occurred in the U.S.

The drought was more widespread than Texas.

The neighboring states of Oklahoma and New Mexico also had to liquidate ewes because of the drought. Some ewes did move to neighboring states to the north, where moisture conditions were better. Missouri, Kansas, Colorado and Utah all increased breeding ewe numbers.

Most Corn Belt states, including Kentucky, Indiana, Illinois, Iowa, Nebraska, South Dakota and Minneso-ta, recorded increases in breeding ewes.

Increases likely were a result of strong prices for lambs and wool, coupled with the fact that smaller farm flocks typical in these states usually have fewer predator problems than are experienced in larger range flocks in Western states.

Several northern and far Western states, including North Dakota, Mon-tana, Wyoming, California, Oregon and Washington, experienced slight declines in ewe numbers.

Harsh weather conditions, particularly during lambing season, probably contributed to the decline. In North Dakota, for example, the third harshest winter in a row caused adverse lambing conditions.

In addition, major spring and early summer flooding along all river systems in the state caused above-normal sheep and lamb losses, damaged and even destroyed sheep production facilities, and flooded pastures and hay land.

U.S. commercial lamb production was down about 9 percent in 2011. The 2011 lamb crop, at 3.51 million head, was down 2 percent from 2010.

With the smaller breeding flock, commercial lamb production in 2012 could be down another 5 to 7 percent, depending on how many ewe lambs are retained for breeding purposes.

Historically short supplies will be supportive to prices again in 2012.

Lamb imports into the U.S. were down slightly in 2011. Imports from Australia, the leading supplier of lambs to the U.S., were up 3 percent from the historical low levels imported in 2010.

Lamb imports from Australia have been declining since peaking in 2007 at levels more than 20 percent higher than in 2011.

Drought conditions in Australia forced liquidation of the sheep flock. With flock rebuilding in progress, less product has been available for exporting. In addition, other important markets for Australian lamb have emerged.

In 2010, for the first time ever, the Middle East overtook the U.S. as the leading destination for Australian lamb. The China, Hong Kong and Taiwan markets also have been growing in recent years.

Lamb imports from New Zealand, the second leading supplier of lambs to the U.S., declined almost 17 percent in 2011. New Zealand lamb production fell to a 50-year low in 2011 because the dairy industry has been expanding at the expense of lamb production. New Zealand also has been targeting lamb exports to a more lucrative European market.

Even though high U.S. wholesale lamb prices may entice lamb imports, the low value of the U.S. dollar and expanding worldwide markets for lamb likely will keep imports at near last year’s levels.

Record high prices in 2011 for market lambs and feeder lambs in the U.S., while bolstered by shorter supplies, are evidence of a strong domestic demand for lamb. The ethnic market for lamb has been growing and likely will continue to grow. Also, an improving domestic economy would be good for the restaurant business.

There is interest in sheep flock expansion, but weather again will be the wild card as it was in 2011.

Although some recent rains in the southern Plains have been beneficial, the drought is far from over.

Also, parts of the western Corn Belt and northern Plains are experiencing a warm, dry winter.

Copyright 2014 The Prairie Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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