US lamb seasonality causes market volatility for the whole industry

Seasonality of U.S. lamb production is an issue that causes inefficiencies and market volatility for all segments of this industry. A new white paper pulls together information on the topic so that members of the industry can understand it in more depth and make informed decisions about management alterations to better supply a more consistently available product.

“Seasonality of the U.S. Lamb Industry: A Review of Current Information” is now available for download at LambResourceCenter.com in its Production Resources section.

This white paper covers both traditional and nontraditional U.S. lamb markets and compiles relevant data from the Livestock Marketing Information Center, U.S. Department of Agriculture, industry reports on lamb sales, and other reputable sources. The paper discusses factors that affect seasonal supply, the role of U.S. and imported lamb, impact on all industry segments, opportunities to alter the U.S. seasonal supply, and case studies of producers who have shifted season of production to meet the needs of their customers.

The Roadmap Implementation Committee, which includes representatives from all industry sectors and national organizations, commissioned a team of industry experts to develop the seasonality white paper. It is the hope of the Roadmap Implementation Committee and the U.S. industry organizations that this seasonality white paper will help identify realistic opportunities throughout the industry that will have big impacts on domestic lamb supplies, and improve quality and consistency year-round.

The American Lamb Board, which manages the U.S. lamb checkoff, provided publication of the white paper, and the American Sheep Industry Association’s Let’s Grow program is conducting a free webinar on Aug. 21. Register online at https://register.gotowebinar.com or email [email protected].

The white paper states that an estimated 80 percent of the U.S. lamb crop is born in the first five months of the calendar year. As a result, there are periods throughout the year when the supply of lamb is inconsistent, which creates industry issues including market price volatility, inadequate supply of market-ready lambs, and irregular supply of carcass size and quality.

To understand why seasonality is such an important issue for the U.S. lamb industry, getting a grasp on the needs of traditional and nontraditional markets is necessary. The seasonality white paper concludes that these are two very different markets, but both are affected by an inconsistent seasonal supply of lamb. However, the shortages of lamb are at two completely different times of the year.

The traditional market prefers a larger and fatter lamb that weighs 120 to 160 pounds live weight, which takes between eight to 14 months from birth to harvest. Therefore, supply of most late winter and spring born lambs to the traditional market occurs November through June.

Lamb retail sales are greatest during the Christmas and Easter holiday seasons with strong demand for legs and racks, as well as a considerable increase in sales of ground lamb at retail—nearly doubling in four years.

According to the white paper, if surplus lambs in the feedlot during winter and spring cannot be harvested on time, they remain in the feedlot until supplies diminish. These lambs are harvested at much heavier weights than ideal for their frame size. Volatility in carcass size makes it challenging to supply a fresh, consistent product to the consumer.

The nontraditional market has grown considerably in the last decade. The largest segment of nontraditional consumers is typically immigrant families celebrating religious holidays, with a spike in demand during the Muslim month-long daytime fasting period of Ramadan, during which lamb is often part of the evening feast.

This market generally prefers lighter, leaner lambs with the highest volume of lambs entering the nontraditional market at 50 to 90 pounds live weight and generally three to seven months old at harvest. The largest supplies of market ready lambs are in the spring and summer with shortages in the fall and winter.

Frozen lamb is not well received by customers, therefore this is not the definitive answer to seasonal supply issues, although it can help in some situations. The majority of chefs and retailers are averse to buying frozen lamb. There is a sentiment that, since domestic beef, pork and poultry are available fresh, then lamb should be, too. However, some cuts such as shanks are an exception.

To even out supply of lamb through the year, the industry must shift lambing season or alter rate of gain to reach market at a different time, advises the white paper. This shift in production could present an opportunity for producers to capitalize on premium prices by marketing lambs during times of short supply. However, every producer will need to evaluate options taking into consideration such factors as flock ability to breed out of season, facility and labor availability and feed costs. In recent years, the market appears to have provided a price incentive to lamb producers who can adjust lambing and harvest times.