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By Colleen
Schreiber
SACRAMENTO — Domestic sheep numbers are beginning to
stabilize. That was a welcome message delivered to sheep producers and
lamb feeders attending the joint convention here last week of the
American Sheep Industry Association and the National Lamb Feeders
Association. Many
producers expressed optimism that the extension of the federal ewe
lamb retention program will further that upward trend.
“Our analysis said that as of January 2004 we have not only
stabilized the breeding herd but we’re also showing anywhere from a
two to four percent increase,” said ASI’s executive director,
Peter Orwick. “That
hasn’t happened since 1990. That’s a big deal, and the ewe lamb
program is a key component of that. Now we have the opportunity to
expand that through another lamb crop, and that’s good for the
industry.”
Since the fall of 2000, the federal government has invested
$145 million in the sheep industry, Orwick noted. That doesn’t
include an additional $18 million recently announced. Those funds have
come through a combination of different programs including the
emergency wool program, six different lamb programs and the livestock
drouth compensation program. The wool deficiency program contributed
an additional $12 million last year and is expected to contribute just
over $10 million for the 2003 wool crop.
“We have to build on the momentum,” Orwick reminded
growers. “We have to keeping banging away at the sheep inventory to
keep it going in a positive direction.”
That is the key, he said, because sheep numbers worldwide
continue to decline. The Australian inventory is now less than 100
million head, the fewest in 50 years. In 1990 Australia had 170
million sheep. New Zealand’s inventory has declined from 70 million
head to 40 million.
“New Zealand’s current lamb crop is expected to be down
another three to five percent from last year, and Australia, because
of their drouth, is not turning those numbers around in one season,”
Orwick noted. “Everyone is short and live lamb prices reflect
that.”
Currency exchange rates at the moment are working against
imports. Compared to U.S. currency, the Australian dollar is now worth
from the upper 70s to 80 cents. Two years ago it was at barely 50
cents.
Though funding for country of origin labeling is on hold,
Orwick reminded growers that the issue itself is not on hold.
“This is an election year, and I expect labeling to be front
and center in the halls of Congress,” he commented. “No one in
Washington is confused on where the American sheep producer stands on
country of origin labeling. They all know and accept and recognize
that sheep producers support mandatory country of origin labeling,
unlike others in other industries that continue to send two and three
different viewpoints on the subject. Members of Congress have given
credit to the sheep industry for having one united, solid voice.
“If our producers are going to spend their money promoting
American lamb, consumers ought to be able to find American lamb by
name in the meat counter,” Orwick insisted.
It’s even more important, he pointed out, because Australia
is trying to match its product to the U.S. product by increasing
carcass weights.
“The Australians are spending over a million dollars
promoting their lamb here in the States,” Orwick noted.
The U.S. also is now a top-five market for New Zealand lamb.
“Seven to eight years ago, we weren’t even five percent of
their export market, and now we’re a top five,” Orwick said.
“Meat New Zealand, it appears, is spending the bulk of their
promotional money in Europe. It is our understanding that they have
not spent one dime on lamb promotion in the U.S. Yet the U.S. market
is where they’ve seen the most growth in terms of market share.”
Orwick noted that one of the goals of the American Lamb Board
is to identify American lamb in the marketplace. The new lamb
promotion programs are just part of that process.
“Sheep producers are excited to see things happening for
American lamb,” the executive director said. “We went through a
long dry period. For nearly five years there wasn’t anything
exciting out there in the marketplace, and now we are seeing chefs
talking on national TV, not just about using lamb but American lamb
specifically. That impresses people.”
Orwick said he’s not hearing many complaints about the lamb
checkoff. Producers are calling in few complaints.
“When something isn’t working, we hear about it. When
something is working, you may get a few comments, but typically we
only hear when it’s not working, and I’m not getting those
calls.”
BSE was also a hot topic at the sheep meetings. Producers heard
about the difficult times the Canadian sheep industry has experienced
since that country discovered its first BSE-infected cow back in May.
“The Canadians were used to shipping 20 percent of their live
lamb production to the U.S. to run through our slaughter plants,”
Orwick noted. “That’s had a major impact on their market. In May
their market was at $1.35 per pound Canadian for live lambs; by
September it was down to 55 cents.”
Animal identification, Orwick said, has come to the forefront
because of BSE.
“One positive thing for the sheep industry is that we already
have 50,000 sheep farms and ranches with premise identification,”
Orwick said. “We already have the tags out there, and a lot of the
recordkeeping is in place. Other animal industries have a lot further
to go.
“Growers made it clear to (USDA) Undersecretary Hawks that we
have to apply some real world economics to animal ID, and it needs to
be done in such a way that growers can use it as a management tool.”
Another new item on the sheep industry’s agenda is a price
risk management proposal. Growers attending the annual meeting heard
what’s been done thus far.
“A recent change in legislation now allows the livestock
industry to participate in crop insurance type programs,” Orwick
explained. “We were prohibited by law for many years. “The
Department worked on hogs and cattle first because of their size and
volume, but we stayed on top of it, and at the first opportunity we
got the sheep industry in line as well.
“We don’t have any kind of risk management, and we need to
have the ability to manage risk, particularly the wild price
swings,” he said.
“We lined up a company, the same one that wrote the feeder
cattle and slaughter cattle pilot programs, to work with us to develop
some kind of price index. Right now we’re trying to decide if we can
project prices well enough to actuarially set them to determine what
kind of premium you have to pay versus what kind of payout we would
have.
“We hope to be able to come back with a product by the end of
this year, and then we would go into a pilot program.” |
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