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Sheep industry facing volatile prices, drought

11/12/2012 3:15 PM
By Associated Press

MILBURN, Utah (AP) — A year ago, the price of lambs intended for slaughter was soaring to record levels. This year, sheep producers are struggling through the combined forces of volatile prices and a harsh drought.

Utah Woolgrowers Association officials said they are unaware of any ranchers who have actually gone bankrupt.

But Doug Livingston, a retired sheep rancher who now works as a sheep broker, has been trying to help one eastern Utah rancher sell his herd and get out of the business, but he says there are no buyers.

"I'm in my 60s and this is the worst year I've ever seen," Livingston told the Deseret News for a story Monday (http://bit.ly/ZxaHsC). "I think there's a lot of ranchers, sheepmen, who would give it up if they could."

The price for lamb "on the hoof" is about half to a third of what it was a year ago, according to Sanpete County rancher Phil Allred, a fifth-generation sheep producer.

"It does threaten the future of it," he said. "For me, myself, I'm old enough that if I didn't have three sons working with me, I wouldn't be here."

Some ranchers have blamed U.S. slaughterhouses for artificially manipulating prices. They claim that prices in grocery stores stayed high, while prices paid to ranchers took a nosedive.

Eight U.S. senators who represent North Dakota, South Dakota, Wyoming and Montana have called on Agriculture Secretary Tom Vilsack to investigate.

Mike Harper, who runs one of the biggest lamb feeding operations in the West, said he believes it's wrong to blame meat packers, who have had too much inventory as well, and that there's no conspiracy.

Harper's feedlot in Eaton, Colo., handles more than 200,000 lambs a year. Prices for lamb in grocery stores were allowed to go too high, Harper said, prompting consumers to cut back on their purchases and boosting the inventory of slaughtered lambs.

"We killed the business," Harper said. "We killed the demand for the product."

He predicted the situation will improve once the inventory of lamb gets back to normal.

"When the pipeline gets cleaned out, then you'll start to see the business get healthy," he said. "It's going to take some time. We need to just steady the market and sit tight."

Meanwhile, ranchers are caught between low prices and high costs. Drought and wildfires forced up the cost of animal feed and drastically shrunk the forage available on grazing land.

Add the rising cost of fuel, and it's becoming harder for ranchers to afford the cost of maintaining thousands of ewes nobody wants to buy.

"When you get in," Allred said, "it's tough to get out."

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Information from: Deseret News, http://www.deseretnews.com


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