ITC Rules Lamb Imports Have
Injured U.S. Sheep Producers

DENVER — The U.S. International Trade Commission has ruled that the recent surge of low-priced imported lamb meat to the domestic market has injured U.S. producers.

The vote, which came on Tuesday, was unanimous, six to zero, in favor of the sheep industry's "Section 201" trade petition. The petition was filed last September by an industry coalition, led by the American Sheep Industry Association, of feeders, lamb packing and processing companies and associations.

"The ITC's vote backs up what American producers have been saying all along — cheap imports have dealt a devastating financial blow to the U.S. sheep industry. The unrelenting pressure of imports has driven our prices below the break-even point," said Lorin Moench Jr., president of ASI.

"The ruling paves the way for our producers to get temporary trade relief," Moench said. "We are grateful to the ITC commissioners and their staff who investigated the hardships our industry has endured because of imports."

Attention now turns toward the nature and duration of trade relief the ITC will recommend to the White House, which has final authority. A hearing is scheduled for Feb. 25. The original petition requested the ITC consider four years of tariffs and quotas to curb the surge of imports that has swamped the domestic market since 1997.

The industry petitioners have filed what they term a "very realistic" adjustment statute, outlining what the industry will do to strengthen its competitiveness if relief is granted.

"Industry leaders will be working very hard with the administration in coming weeks and months on ways to implement the plan," Moench said.

The 201 statute requires petitioners to show that imports have increased and been the substantial cause of "injury" or are a serious threat of injury to a domestic industry. The sheep industry's case showed that as the level of cheap imports skyrocketed to one-third of the domestic market, the prices paid to U.S. producers plunged. The shock wave of imports has been felt throughout the entire supply chain from producer to meat processor.

Moench said he was pleased that the U.S. ITC saw through attempts by import supporters to dodge the issue of price. Comparisons of imported and domestic product have found that imports undercut domestic products nearly 80 percent of the time by average margins of 20 to 40 percent and sometimes as high as 70 percent.

The sheer quantity of cheap imports flooding the market has nearly crippled the U.S. sheep industry, Moench said. As the level of imports rose, prices for feeder and slaughter lambs plunged 40 percent between spring 1997 and December 1998. In some parts of the country last fall, growers with lambs to sell couldn't get a single quote, Moench said.

In 1993, about 56.5 million pounds of imported lamb meat entered the domestic market. By 1997, the amount had risen by 49 percent, to 84.4 million pounds. The levels continue to rise. The first nine months of 1998 alone saw 76.9 million pounds enter the U.S., a 19 percent increase over the first nine months of 1997. Imports now make up nearly one-third of the domestic market and Australian and New Zealand producers say they are poised to boost their lamb meat exports another 10 percent to 30 percent in 1999.