Industry News
2+2+2=Rebuild
By Greg Ahart, National Director of Producer Relations, Superior Farms
At the recent ASI convention in Reno, the first substantive plan emerged from the "Rebuild the Sheep Inventory" committee. The plan addresses two critical issues. First, why do we need to worry about increasing the national flock? The second issue is how to go about addressing the increase in a manageable and measurable manner.
The reduction in the national flock is reaching crisis proportions. Why do I say that? We are losing infrastructure throughout the industry. Livestock transportation, sheep nutrition specialists, university research geared towards sheep production, and ag lenders with an understanding of the sheep industry are all falling by the wayside. As recently as January 27, Superior Farms announced that it was closing the further processing side of the recently acquired Iowa facility. Lack of lamb supply in the Midwest was cited in the press release as the leading cause. Sheep and lamb prices are at an all time high. Wool prices are at a 23-year high. There isn't enough lamb to meet consumer demand.
To quote a live market bulletin that Superior just distributed to its customers "For the first time on record, Australian lamb exports to the Middle East surpassed those to the United States. Resilient demand, strong economic growth, and a weak American dollar have boosted Middle East volume at the expense of American imports. We do not see this as a "one off" event...market dynamics have shifted creating long-term changes. Going forward, the United States will no longer be the number one export market for Australian lamb." So, with the American flock numbers at an all time low, prices at an all time high, and infrastructure crumbling, growth is essential to keep the U.S. sheep industry viable.
There are two focal points coming from the rebuild committee: first, to increase production from current producers and second to encourage and facilitate new producers into sheep production. On the new producer side, there is already a grant application in front of the National Institute for Food and Agriculture for new farmers and ranchers that, if funded, would provide almost $1 million in producer education funds over a three-year period. With the necessary matching funds being back-stopped by ASI and Superior Farms, this grant will be a collaborative working arrangement between the two. Peter Orwick, Executive Director of ASI, and myself, are the co-Principal Investigators on the grant. I will provide oversight to the selection committee that will decide who will be participating in the educational opportunities.
To encourage existing producers to increase production there was a plan presented entitled "2+2+2=Rebuilds." The first goal inside of it is clearly stated as "increase at least 2 ewes per hundred or per operation by 2014."
If every operator increased by 2 ewes per operation or per 100 ewes by 2014, we would have 175,000 additional ewes, 254,000 additional lambs to harvest, and 2 million additional pounds of wool.
Success for the plan depends on ALL operations, not just the large operators.
The second goal is to increase the average birthrate to 2 lambs per year. With the stated national flock at 3.37 million ewes, that would be 6.73 million lambs on the ground (as opposed to 3.6 million lambs being born in 2010). No, they won't all be saved. There will still be health and predator mortalities, but more born will still equal significantly more at the end. There are multiple tools available to help with lambing percentage: Flushing, Teaser Bucks, Genetics, Vaccinations, Nutrition, and additional labor. Most of these can be found and explained in the SID handbook. With that said, when is the last time any of us picked it up and read it? If you lost yours, ASI has additional copies.
The third goal is to increase harvested lamb crop by 2%. Using today's metrics that represents another 67,500 head through the system. Predator losses, disease, and mortality can be reduced by quality of management.
As stated at the end of the presentation, these goals are attainable, measureable, and above all, realistic. We can build the ewe inventory by 175,000 and add at least 315,000 lambs to the harvest inventory at the same time. Today's prices will provide a high return for good management. The increase in sheep inventory of 315,000 lambs at today's prices is over $70 million in lamb and $3 million in wool. We also know from past economic studies that for every 1,000 ewes, 18 jobs are created. This increase in sheep inventory will either create or save 5,700 jobs.
Our current situation wasn't created overnight. Similarly, there is no quick fix! This plan calls for managed growth throughout the industry. As sheep and lamb inventories climb, so does the marketing budget for the American Lamb Board. In turn, the ALB can do more to stimulate consumer demand and keep market prices stable. This is an exciting time to be in the business. Let's all do our part.