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12-27-13 ASI WEEKLY NEWS FOR SHEEP INDUSTRY LEADERS…

Posted by Brian Allmer on December 27, 2013

The ASI staff wishes each of you a Happy and Prosperous New Year! 

Charleston Trivia and Convention Update

Charleston’s first baseball team was the Sea Gulls, established in 1886, and is now called the Charleston Riverdogs. Part owner and director of fun is actor Bill Murray. The Riverdogs stadium is located next door to the convention hotel.

Sleeping Rooms: Sleeping rooms at the Marriott Charleston are now sold out for the dates that we are going to be at the hotel. If you have not yet reserved your sleeping room, there are a couple alternative hotels to consider.

If you would like to be placed on a waiting list for any sleeping rooms that may open up at the Marriott, please email Judy Malone at judym@sheepusa.org with your arrival and departure dates and she will place you on the wait list on a first-come first-served basis. Be sure to also make your hotel reservations at one of the alternate locations.

GIPSA Lamb Report Released

On Dec. 20, the United States Department of Agriculture’s (USDA) Grain Inspection, Packers and Stockyards Administration’s (GIPSA) Packers and Stockyards Program (P&SP) released its report, “U.S. Lamb Market in 2010, 2011 and 2012.” The P&SP initiated an investigation of the lamb market on Oct. 18, 2012, after eight U.S. Senators requested an investigation in a joint letter to the Secretary of Agriculture’s office. One U.S. Representative also requested the investigation in a separate letter. The letters addressed a broad range of issues in the lamb market, but a large swing in prices was at the root of the complaints. 

To investigate the concerns, P&SP interviewed over 45 people involved in the sheep and lamb market, including sheep and lamb producers, dealers, livestock auction managers, lamb feeders, packers, market analysts and federal regulators. The P&SP investigation found that many market factors interacted to cause the sharp increase and subsequent decrease in lamb prices that occurred during 2010, 2011 and 2012.

The rising cost of imported lamb was likely the most important factor. A consensus of the people interviewed in the investigation attributed the start of the increase in prices to a world-wide shortage of lamb. Reduced lamb imports raised imported prices, which in turn led to a substitute away from imported lamb to domestic lamb and hence, put pressure on domestic lamb price.

The report also states that “prices for lamb eventually reached such high levels that consumers curtailed the amount of lamb they purchased.” This caused a market ‘currentness’ problem with lambs getting “larger, fatter and older” and the “size of lambs affected demand because the cuts were larger than consumers preferred.”

P&SP found no evident of price manipulation due to the livestock price risk insurance that USDA’s Risk Management Agency and the American Sheep Industry Association sponsor.

The full report can be viewed at www.gipsa.usda.gov/Publications/psp/36881_1_0_LambInvestigationPublicReport12202013.pdf.

Top 10 Sheep Stories of 2013

  1. Lamb Prices Recover – Feeders finally returned to profitability in September. Also, prices paid for feeder lambs rose above cost of production for the first time following the volatile markets of 2011 – 2013.
  2. ASI Rolls Out Market News App – ASI launched its first mobile application providing lamb and wool market information to anyone with a smartphone or tablet allowing producers to tap into auctions and prices. The app is titled ASI Market News. Download it today from your App Store.
  3. $5 Million Lamb Buy – In July, the U.S. Department of Agriculture’s (USDA) Agriculture Marketing Service announced a $5 million purchase of lamb products for federal food nutrition assistance programs. ASI requested the lamb meat purchase to prompt stronger prices for lambs at the farm and ranch gate. In the first half of the year, live lamb prices were below the cost of production and producers were facing the highest feed costs in years.
  4. Industry Roadmap Final Report Released – The Roadmap Advisory Committee published the final version of the American Lamb Industry Roadmap Report. This collaborative effort provides a strategy for the industry that will strengthen its short- and long-term competitive advantage and return the industry to consistent profitability. The four high-level goals as identified in the roadmap are product characteristics, demand creation, productivity improvement and industry collaboration.
  5. Lamb Checkoff Rate Increase – The new lamb checkoff rate went into effect on June 13 increasing the assessment from $.005 to $.007 per pound for live sheep and lambs sold by producers, feeders and seedstock producers. For sheep and lamb purchased for slaughter by first handlers, the rate increased from 30 cents to 42 cents per head. The assessment rate change, which was supported by ASI, will generate about $700,000 additional funds for American Lamb Board (ALB) programs.
  6. GISPA Report Published – The investigation by the Packers and Stockyards Program’s found that many market factors interacted to cause the sharp increase and subsequent decrease in lamb prices that occurred during 2010, 2011 and 2012. According to the report, the rising cost of imported lamb was likely the most important factor.
  7. Instrument Grading Moves Forward – The last of the cut-out data was captured in November and will be summarized, validated and standardized by USDA for future use in assigning USDA Quality and Yield Grades. The use of instrument grading provides for the opportunity to reduce variability in the subjective application of yield grades to lamb carcasses, improving the predictability of the saleable cuts and the ability to establish value-based returns on quality lambs. ASI initially launched the project that was then co-funded by ALB and the National Sheep Industry Improvement Center to finalize the grading standards and to evaluate the benefits and effectiveness of the system.
  8. NLPA Lending Program Includes Funding for Flock Expansion – Up to $2 million of the National Livestock Producers Association’s Sheep (NLPA) and Goat Fund was identified to be used specifically for the purchase of breeding animals (ewes and rams). This new loan program is the result of a joint effort between NLPA and ASI in the spirit of ASI’s Let’s Grow initiative.
  9. Revised Scrapie Flock Certification Program – The revised Scrapie Flock Certification Program (SFCP) went into effect on June 3 allowing sheep and goat producers to increase the marketability of their animals by demonstrating a negligible scrapie risk in their flock. The revised SFCP enhances the scrapie surveillance strategy and helps in the final push to eradicate this disease from the United States.
  10. COOL Takes Effect – The new Country of Origin Labeling (COOL) rule took effect on Nov. 23. Labels now refer to born, raised and harvested according to applicable country. ASI supports the mandatory labeling of American lamb.

Miss the Profitable Genetic Selection Webinar?

If you were unavailable to join Reid Redden, Ph.D., North Dakota State University extension sheep specialist and National Sheep Improvement Program chair at the “Profitable Genetic Selection: How the National Sheep Improvement Program Can Help the US Sheep and Goat Industry” webinar, a recording of the session is available at www.optimalag.com/webinars/2013-12-17_ProfitableGeneticSelection.wmv.

The webinars are sponsored by the American Sheep Industry Association (ASI) as part of the Grow Our Flock campaign to increase sheep production. Campaign Chairman Mike Corn, a sheep rancher from New Mexico, relays that a copy of the PowerPoint slides are available at www.SheepAgriculture.com/?cat=9.

Questions, comments and feedback can be directed to Jay Parsons at jay.parsons@optimalag.com.

2014 NFU Beginning Farmers Institute 

National Farmers Union (NFU) is now accepting applications for its 2014 Beginning Farmers Institute (BFI) program. The annual program, now accepting its fourth class of students, is open to individuals who are new to farming, are in the process of transferring an operation from a relative or non-relative to themselves, or are contemplating a career in farming or ranching.

The BFI program helps students gain insight and practical skills needed by beginning farmers and ranchers, including business plan writing, financial planning and researching available programs to help starting up and sustaining a successful operation.

Applicants accepted into the 2014 program will attend three separate education sessions. One each in Washington, D.C., Minneapolis, Minn. and a final session culminating at NFU’s annual convention in March 2015 in Wichita, Kan.

Program topics at the education sessions will include business planning, U.S. Department of Agriculture programs, tax and record keeping, estate transfer and marketing.

Interested applicants can download the 2014 application on the NFU website at www.nfu.org. Applications must be postmarked on or before Feb. 20, 2014.

Reprinted in part from Farm & Ranch Guide 

Jumped the Gun on Sheep Ecology DVD

The article in last week’s ASI Newsletter about the availability of the DVD entitled Fast Facts About Sheep Ecology was incorrect. The DVD is in production but it is not yet available. More information about obtaining a copy will be forthcoming when it is available for distribution.

The project was sponsored by the Colorado Lamb Council, Colorado Wool Growers Association and the American Sheep Industry Association.

Wool Socks to Those in Need

Vermont Gov. Peter Shumlin kicked off a project that gives warm socks made in his state to children in need.

On Monday afternoon, Shumlin launched the 6th annual “Blue Socks for Kids” project. The wool socks, made by Cabot Hosiery Mills of Northfield, were distributed by community action agencies and homeless shelters.

More than 150,000 pairs of socks have been distributed since the inception of the project.

Reprinted in part from TribTown.com 

MARKET NEWS

Weekly National Market Prices for Wool 

The U.S. Department of Agriculture’s prices for wool can be accessed at www.fsa.usda.gov/FSA/webapp?area=home&subject=prsu&topic=col-nl-wm. The effective repayment rate is the lower of either the 30-day average or weekly rate.

Category
2013
Loan Rate
Effective
Repayment
Rate
LDP Rate
Week of 12/25/13
Graded Wool
CLEAN PRICES in $ per pound
<18.6 Micron 3.88 4.50 Not Available
18.6-19.5 3.38 4.35 Not Available
19.6-20.5 2.94 4.23 Not Available
20.6-22.0 2.72 4.18 Not Available
22.1-23.5 2.56 4.04 Not Available
23.6-25.9 2.33 3.09 Not Available
26.0-28.9 1.78 1.88 Not Available
> 29 Micron 1.38 1.70 Not Available
GREASE PRICES in $ per pound
Ungraded Wool 40 cents 46 cents Not Available
Unshorn Pelt
6.865 lbs x
Ungraded Wool LDP
Not Available

Wool LDPs are not available when the weekly repayment rate is above loan rate.

Market Summary, Week ending December 20, 2013
Feeder Prices, San Angelo: 45-60 lbs for 206-218 $/cwt.; 60-80 lbs 202-218 $/cwt.; 80-100 lbs for 192-208 $/cwt., 100-110 lbs. for 184-192 $/cwt.
Slaughter Prices – Negotiated, wooled and shorn, 124-166 lbs. for 140-174 $/cwt. (wtd. ave. 156.54), wooled and shorn load 173 lbs. for $155/cwt.
Slaughter Prices – Formula1, 3,831 head at 274-310 $/cwt. for 70.5 ave. lbs.; 6,536 head at 267.40-312 $/cwt. for 79.2 ave. lbs.
Equity Electronic Auction, No sale.
Cutout Value/Net Carcass Value2, $332.34/cwt.
Carcass Price, Choice and Prime, YG 1-4, $/cwt., weighted averages, 951 head at 55-65 lbs. for 320.11, 2,450 head at 65-75 lbs. for 298.57, 2,272 head at 75-85 lbs. for 290.03, 749 head at 85 lbs. and up for 287.74.
Boxed Lamb, weighted average prices ($/cwt.), Trimmed 4″ Loins 482.45, Rack, roast-ready, frenched 1,380.60, Leg, trotter-off, partial boneless 479.72, Ground lamb 525.10, Shoulder, square-cut 290.68.
Imported Boxed Lamb, weighted average prices ($/cwt.), AUS Rack (fresh, frenched, cap-off, 20-24 oz to 28 oz/up) 1,005.77, AUS Shoulder (fresh, square-cut) 233.73, AUS Leg (fresh, semi boneless) 350.90, AUS Rack (frozen, frenched, cap-off, 20-24 oz to 28 oz/up) 966.33, NZ Rack (frozen, frenched, cap-off, 12 oz/dn to 20 oz/up) 830.06, AUS Shoulder (frozen, square-cut) 221.56.
Exported Adult Sheep, 1,030
Wool, Price ($/pound) Clean, Delivered, 18 micron (Grade 80s) NA, 19 micron (Grade 80s) NA, 20 micron (Grade 70s) NA, 21 micron (Grade 64-70s) 3.97, 22 micron (Grade 64s) 3.85-3.93, 23 micron (Grade 62s) 3.66, 24 micron (Grade 60-62s) 3.44, 25 micron (Grade 58s) NA, 26 micron (Grade 56-58s) NA, 27 micron (Grade 56s) NA, 28 micron (Grade 54s) NA, 29 micron (Grade 50-54s) NA, 30-34 micron (Grade 44-50s) 1.49-1.54.
Australian Wool, From 2 weeks ago: Clean, delivered FOB warehouse & gross producers ($/pound) 18 micron (Grade 80s) 4.29-4.86, 19 micron (Grade 80s) 4.16-4.71, 20 micron (Grade 70s) 4.03-4.57, 21 micron (Grade 64-70s) 4.00-4.54, 22 micron (Grade 64s) 3.97-4.50, 23 micron (Grade 62s) 3.95-4.47, 24 micron (Grade 60-62s) NA, 25 micron (Grade 58s) 2.76-3.13, 26 micron (Grade 56-58s) 2.47-2.80, 28 micron (Grade 54s) 2.18-2.47, 30 micron (Grade 50s) 2.05-2.32, 32 micron (Grade 46-48s) 1.80-2.04, Merino Clippings 2.60-2.95.
1Prices reported for the two weight categories of the largest volume traded. Second, multiplying the carcass prices by an estimated 50.4% dressing percentage yields live weight prices. 2The cutout value is the same as a net carcass value. It is a composite value that sums the value of the respective lamb cuts multiplied by their weights. It is also the gross carcass value less processing and packaging costs.
Source: USDA’s AMS

American Sheep Industry Association; 9785 Maroon Circle, Suite 360; Englewood, CO 80112-2692
Phone: (303) 771-3500 Fax: (303) 771-8200 Writer/Editor: Judy Malone E-mail: judym@sheepusa.org
Web sites: http://www.sheepusa.org and http://www.sheepindustrynews.org

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