Rising feed grain prices have sheared sheep and wool profits, says the owner of the largest sheep feedlot in Canada.
A combination of expensive feed and high lamb prices make it uneconomical to buy and feed lambs, said Roy Leitch.
“I fed 50,000 lambs last year and basically I did it for nothing. If we can’t buy lambs way, way less than we did last year, there’s no sense in doing it.”
Last year the average price for an 80 pound lamb was $1.45 a lb. With today’s high feed costs, Leitch needs to buy an 80 lb. lamb for $1.10 a lb. to make money.
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“It appears to me this whole livestock sector will be hurt bad,” said Leitch.
The only hope for a break is if an early frost creates an excess of feed this fall, he said. Leitch didn’t travel to recent sales because prices were too high to squeeze any profit out of trucking them to Ontario and Quebec where demand for sheep, lamb and goats is greatest.
Miles Buswell, manager of sheep and goat sales at Beaver Hill Auction Services in Tofield, Alta., predicts lamb and goat prices will stay high.
There is good demand for lambs 70 lb. and heavier with some fat cover that can go direct to slaughter. Young billy goats that average 70 to 80 lb. have climbed past $2 a lb.
Buswell believes the exodus of producers from the sheep and goat business because of drought, BSE and easier money in the oil business will create a long term lamb shortage.
“There have been so many dispersals, I don’t believe the sheep are out there.”
Buswell said the Alberta government and the Alberta Sheep and Wool Commission have done little to encourage producers to get into the business.
“They think they can always buy Australian lamb. It’s not the same product. People want fresh product.”
Leitch said he hasn’t had trouble keeping his feedlot full and is surprised by the number of lambs that appeared for sale each week. His ability to buy lambs may be tied to a decision by Sunterra Meats in Innisfail, Alta., to fill its fat lamb orders from the United States.
“I picked up a lot of lambs that would have been killed at that plant,” he said.
Shawn Thompson, Sunterra sales manager, said the company has been forced to buy lambs from the U.S. to fill orders and it is contemplating going offshore if lamb numbers and prices stay tight.
“We don’t have a choice,” said Thompson. “A lot of lambs are going for big, big money.”
The Alberta plant kills 1,400 lambs a week that end up mainly as fresh meat in western Canadian grocery stores.
The lamb shortage has meant Sunterra has shorted retailers’ orders for the past eight weeks.
“They’re not very happy.”
Before Easter, lamb supply was good. A cool spring slowed weight gain and reduced the number of market-ready animals, creating a shortage for retailers seeing a growing appetite for the fresh meat.
Thompson said retailers have been patient, but few are willing to ignore the growing price gap between offshore lamb and fresh prairie product. Already Co-op grocery stores no longer carry fresh product and two or three other retailers are reluctant to continue selling it.
“Lamb is lamb to them. New Zealand lamb equals Canadian lamb,” said Thompson.
Many retailers have started to eye American lamb. With the high Canadian dollar, it is now feasible to import fresh American lamb, he said.
