Lamb producers take falling prices in stride

Lamb prices have fallen sharply in 2012, but sheep producers aren’t pressing the panic button, says a Manitoba farmer.

Diana Neuman, who raises sheep near McCreary, Man., said lamb prices hit the stratosphere in 2011 and a market correction was inevitable.

“If prices go back to normal, I’m not that upset. You can’t expect the prices to continue (rising forever),” she said. “It’s a market cycle.”

Lambs at Winnipeg Livestock Sales were selling for less than $1.30 per pound in late July, down from $2.70 per lb. in 2011 and early 2012.

In an article in the Manitoba Sheep Association newsletter this summer, Saskatchewan Sheep Development Board executive director Gord Schroeder listed several factors behind the moderation in sheep prices:

  • lamb producers may have had a great year in 2011, but buyers and processors did not because it was difficult to pass on the high prices to consumers. This year, buyers are being more cautious
  • there is a backlog of lambs at slaughter plants because producers are marketing more animals and Canadians are eating slightly less lamb in 2012, likely because of high retail prices
  • a global price correction has seen the price of lamb fall in many countries
  • rising feed costs make it less attractive to feed lambs

A market downturn isn’t usually welcome, but Schroeder said the drop was needed in this case because lamb retail prices were excessively high and meat consumers can be pushed only so far.

Lucien Lesage, chair of the Manitoba Sheep Association, backed Schroeder’s observation on retail prices.

“I think (we) reached the peak of consumer willingness to pay for our product,” said Lesage, who raises sheep near Notre Dame, Man.

“Lamb is an expensive meat … and I’m sure you’re aware wages aren’t going up and household expenses are. So, where do you cut? The high end (items), obviously.”

The lower farmgate price should cut prices in the meat aisle and at the butcher shop, which will hopefully rejuvenate lamb consumption across the country, Lesage said.

As well, Neuman said lamb is always cheaper in the summer and 2011 prices reached unsustainable levels.

A price of $1 per lb. wasn’t great when she entered the sheep business in 2008, but it was enough to make a living.

“Now if I’m not getting $1.80 per lb. for my lambs, I think the world is ending,” she noted, poking fun at price expectations.

“Well, I won’t be getting a $1.80 per lb. (this fall)…. You have to be realistic about it.”

Neuman said Canada’s sheep industry is healthy and growing, despite the market downturn.

Breeding stock values may have backed off a bit, but prices remain fairly robust because new entrants and established producers are trying to build flocks, she added.

“Maybe prices are slightly down (compared to 2011), but they were getting ridiculous for a while there last year.”

Neil Versavel, a veterinarian and sheep producer from Balmoral, Man., concurred that prices for commercial and purebred breeding stock are holding up, despite the market correction in lamb prices.

Commercial ewes remain around $250 per animal and purebred ewes are more than $300, Versavel said.

The Manitoba Sheep Association show and sale, held in Rivers Aug. 17-18, was expected to tell the tale of the provincial market. Nonetheless, prices from the All Canada Sheep Classic sale in Nova Scotia in June suggest the breeding stock market is healthy.

“The highest price for a (Dorset) ram was $4,000. That’s really, really, really high,” said Neuman.

Other prices at the national show were more down to earth, she added.

Nonetheless, Versavel said the $4,000 price tag indicates that Canadian sheep producers are willing to pay top dollar for high-end genetics, which reflects the confidence they have in the industry.

“The optimism is still there … the demand (for lamb) hasn’t shrunk away. I think people are taking the price dip in stride and waiting to see how things go this fall.”

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