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Sheep producers need to keep marketing options open

COVID-19 pandemic forcing sheep produces to look for new ways to market their lamb.

Sheep producers need to keep their marketing options open during the COVID-19 outbreak, according to North Dakota State University Extension sheep specialist Travis Hoffman.

“We are undoubtedly in a different time than expected for livestock producers in today’s COVID-19 situation,” he said. “Breeding decisions were made, we put in the effort to get calves, piglets, lambs and/or kids on the ground and growing well. However, we are facing an unprecedented challenge for harvesting the fruition of our efforts for livestock production.”

The slaughter lamb volume was down 38% for the week ending April 17 and is down 12% so far for 2020, he said.

“Our current lambs on feed inventory is up 8% over last year, and we are on a full path to industry challenges of too much supply as we come through the summer months of sheep and lamb production,” Hoffman said.

The lamb industry is highly dependent on the currently nonexistent restaurant trade. Thus, retail is now sheep producers’ primary market. During the weeks of March 15 and March 22, lamb purchases in the retail sector had growth of 55% over yearly expectations, but this has not been sustained as people load their refrigerators and freezers.

“There is greater demand than ever from the consuming sector to know the producer, and I hope that we can mitigate current challenges via providing a direct market for our consumers of high-quality protein for the family meals,” Hoffman said. “Local food is not new, but the chances to learn more about production practices and building relationships with producers may be at a heightened priority for our consumers.”

One option is for a producer to sell a live animal (prior to slaughter) directly to a consumer. The animal then goes through a custom-exempt plant. That plant is exempt from continuous inspection and only can slaughter and process livestock for the exclusive use of the owners, the owners’ families and non-paying guests. The packages of meat must be labeled “not for sale.”

However, if an individual wants to merchandise meat products, a limiting factor is the need for a state or U.S. Department of Agriculture inspection of the processing plant. Meat originating from state-inspected facilities can be sold only within the state’s boundaries, and USDA-inspected meat can be sold in-state or via interstate commerce.

“Working with meat processors can provide proactive options with depressed live animal markets for producers to develop alternatives for marketing throughout the spring and summer with challenges that we have never faced,” Hoffman said. “Keep your options open.”

Industry-wide impacts

Earlier in April, American Sheep Industry Assn. (ASI) president Benny Cox sent a letter to Agriculture Secretary Sonny Perdue, writing, “Unfortunately, our economic impact has been severely blunted due to unforeseen circumstances beyond our ability to prepare.”

ASI said the letter provided a current status of the American sheep and wool industry, including:

  • Current estimates show a projected direct farm-level loss of $125 million due to significant declines in feeder and slaughter lamb prices as a result of the loss in consumer demand for American lamb.
  • The total economic impact to the American lamb industry might exceed $300 million.
  • American wool exports to China — the number-one export market for wool and sheepskins — are down 88% in value and 89% in volume for October to January between 2017-18 and 2019-20.
  • American sheepskin exports to China are down 76% in value and 50% in volume during the same period.
  • Globally, the wool price is 26% lower than it was a year ago.
  • The lamb market is in a perilous situation with the loss of half of the entire market for American lamb due to foodservice closures.
  • The March bankruptcy filing of the second-largest lamb company, Mountain States Rosen, further risks market impacts, price discovery and market transparency.
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