By AMY TRINIDAD
Sheep Industry News Editor

(March 1, 2010)  Compared to other livestock and poultry industries, lamb industry prices held up fairly well in 2009, was the message from Julie Stepanek Shiflett, Ph.D., Juniper Economic Consulting, while addressing the Re-build the U.S. Sheep Inventory Committee.

“After a banner year in 2008 for many segments of the industry, prices in 2009 weakened, but remained higher than the five-year averages in many cases,” she explained, stating that the net income for beef producers was down 26 percent from 2008 to 2009 and that net income for hog producers was down 52 percent in that same time period, while lamb net income was estimated at an increase of 7 percent, which is combined with bison and veal production.

According to the U.S. Department of Agriculture’s Economic Research Service, declines in cash receipts of the livestock markets resulted mostly from large declines in crop and livestock prices at the farm level. Prices for animals and their products fell in 2009 because of the declining exports and a lag in adjusting production for changing market conditions and expectations.  Overall, Shiflett said that the value of livestock production is projected to be down 16 percent in 2009.

“Although prices in the sheep industry appear relatively high, the industry is not attracting investment in flock expansion,” Shiflett said, mentioning the industry’s lowest inventory level on record. “However, replacement sheep prices were up in 2009 across most types which are a good indicator producers are thinking about flock expansion.”

She went on to explain that the higher replacement sheep prices might not have occurred if the lamb market had fallen more sharply in 2009. One of the programs that help with the lamb prices is the USDA’s lamb purchase program which Shiflett said plays an important role in supporting lamb prices and keeping prices higher than they could have been.

Also addressing the committee was Phillip Berg regarding the success the Pipestone Lamb and Wool Program has seen at the Minnesota West Community and Technical College. The basic purpose for starting this program was to boost the level of sheep management and production in southwest Minnesota by bringing modern, profitable management technologies to member sheep producers and help them properly implement these techniques on their individual farms.

Pipestone offers a range of programs – Sheep for Profit School, Lambing Time Management and lamb and wool online course offerings available through the university –  that produces can learn from and incorporate into their sheep operations.

“The key to the success of the programs is the innovative and critical- thinking producers,” explained Berg, who said that through all of their programs, they reached almost 250 producers nationwide last year, 70 of which are in southwest Minnesota.

The committee spent a great deal of discussion with the deputy administrator and the two regional directors of the U.S. Department of Agriculture’s Wildlife Services regarding the predator management topic which is so often mentioned with sheep production and profitability.

The committee reviewed the ASI producer survey sections that were specifically written to assist with information on the sheep inventory. With only preliminary information available, a couple of key findings were that a large share of respondents do not have a family member planning to continue the sheep operation and many would not borrow money to maintain a sheep operation.

Members looked forward to further review of the survey findings and requested a regional breakout of responses as discussion indicated it could be different issues on sheep inventory expansion in different areas of the country.

The committee stated five items of consensus so far as relayed to the ASI Board of Directors by Chair Guy Flora:

1. Attract new comers to the industry. Like other livestock industries, the average age of a sheep producer is rising. The industry needs to be able to offer training programs and financing options to attract younger people into the business.
2. Increase the industry’s lambing percentage.
3. Show the public that the sheep industry is a sustainable one and that producers and their sheep turn sun and grass into food, fiber and milk.
4. Work with the government regarding regulatory burdens and promote the use of American wool in military uniforms.
5. Keep a positive attitude within the industry and keep the discussions focused on what is positive within the industry, for example Livestock Risk Protection for Lamb, the Pipestone Lamb and Wool Program, the American Lamb Board and the Howard Wyman Leadership School.

Flora closed his remarks by saying, “If we treat it (sheep producing) like a business, it may be a good way of life but if we treat it like a way of life, it may or may not be a good business.”