One of Western Canada’s largest lamb buyers thinks the United States’ actions on imports of Australian and New Zealand lamb will have little impact on Canadian prices.
“My read is this is not going to increase the market,” said Bob Pettie of Canada West Foods at Innisfail, Alta. He said Canadian sheep and lamb prices are based on U.S. prices.
“I don’t think we will have dramatic increases or decreases. It will be the normal fluctuation of the market and we are looking for a lower market as we get through the summer here, which is normal.”
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Pettie believes the 10 percent penalty is not enough to reduce the amount of oceanic lamb going into the U.S., but it should rule out increased imports.
Pettie and Colleen Sawyer, manager of the Saskatchewan Sheep Development Board, said a key concern for Canada will be to ensure Australia and New Zealand don’t increase exports to Canada for rerouting to the U.S.
“If they start putting it in through Canada, because they haven’t got their American market, it might be really bad for us,” said Sawyer.
Pettie said if oceanic lamb comes into Canada as a backdoor to the United States, producers here could get hurt.
“I’m sure the Americans will be keeping an eye on increases in dressed product going from Canada into there. If there is, they will jump all over us.”
Canada does not export a lot of sheep and lamb south, but the U.S. is the only significant market for heavier lambs over 110 pounds.
Pettie noted that the American Sheep Industry Association had wanted stiffer penalties imposed on imports, but its disappointment was probably lessened by the $100 million (U.S.) market development program announced by the U.S. Department of Agriculture at the same time as the tariff.
“They have been cash poor, as we are, for dollars for promotion of lamb,” he said.
The right advertising campaign might help build demand in the U.S., he added.
But the main reason for the decline in the sheep business in the U.S. was the cancellation of wool subsidies.
“It was about $30 a head, which is huge on a lamb, an animal worth only $75 to $100,” he said.
“That was when the flocks really started to decrease and as they decreased flock size, the imports started to take over a portion of the market.”
