Lamb Market Outlook ASI New Orleans, TX January 25, 2019 David P. Anderson Professor and Extension Economist
Overview Usual Suspects Production Demand Prices
The Usual Suspects Stocks Imports Weights
Mil. Pounds LAMB AND MUTTON IN COLD STORAGE Frozen, End of the Month 42 38 34 30 26 22 18 JAN MAR MAY JUL SEP NOV Avg. 2012-16 2017 2018 Data Source: USDA-NASS 12/21/18
Mil. Pounds 26 24 22 20 18 16 14 12 10 8 US LAMB IMPORTS Carcass Weight, Monthly JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Avg. 2012-16 2017 2018 Data Source: USDA-ERS & USDA-FAS I-N-44 12/07/18
$ Per Cwt. 600 AUSTRALIA vs U.S. PARTIAL LEG OF LAMB PRICES Fresh, Boneless, Weekly 550 500 450 400 350 300 2016 2017 2018 2019 AU US Data Source: USDA-AMS, Compiled & Analysis by LMIC
$ Per Cwt. 1300 AUSTRALIA vs. NEW ZEALAND vs. U.S. RACK PRICES Frozen, 20 oz/up, Weekly 1200 1100 1000 900 800 700 600 2016 2017 2018 2019 AU NZ US Data Source: USDA-AMS, Compiled & Analysis by LMIC
Thou. Head 78 76 74 72 70 68 66 64 62 60 58 LAMB AND YEARLING DRESSED WEIGHT Federally Inspected, Weekly Data Not Reported During Shutdown JAN APR JUL OCT Avg. 2013-17 2018 2019 Data Source: USDA-AMS & USDA-NASS S-S-06 01/21/19
Production
Mil. Head 8 BREEDING EWES 1 YEAR & OLDER January 1, U.S., Annual 7 6 5 4 3 2 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Data Source: USDA-NASS S-N-04 03/23/18
Mil. Pounds 3.50 LAMB AND MUTTON PRODUCTION Federally Inspected, Weekly 3.25 3.00 2.75 2.50 2.25 2.00 1.75 1.50 JAN APR JUL OCT Avg. 2013-17 2018 2019 Data Source: USDA-AMS & USDA-NASS M-S-20 01/21/19
Demand
Demand Thoughts Demand Usually Most Difficult to Predict Starting 2019 With: Higher wholesale cut and cutout prices than a year ago Yet, lower to no change in retail prices until late in 2018 And lower live lamb prices Suggests Some Potential Problems
Index 120 Domestic U.S. Consumer Sentiment Monthly, Index year 1966 = 100 110 100 90 80 70 60 50 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 Data Source: Thomson Reuters/University of Michigan 12/21/18
Bil. Pounds COMMERCIAL MEAT & POULTRY PRODUCTION By Type of Meat, Annual 100 80 60 40 20 0 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Beef Pork Lamb & Veal Chicken Turkey Data Source: USDA-NASS, Compiled & Forecasts by LMIC
$ Per Cwt. 240 FEEDER LAMB PRICES 3-Market Average; CO, TX & SD; Weekly 220 200 180 160 140 120 JAN APR JUL OCT Avg. 2013-17 2018 2019 Data Source: USDA-AMS, Compiled by LMIC S-P-06 01/23/19
$ Per Cwt. 310 SLAUGHTER LAMB PRICES National Direct, Hot Carcass, Weekly 300 290 280 270 260 250 JAN APR JUL OCT Avg. 2013-17 2018 2019 Data Source: USDA-AMS, Compiled by LMIC S-P-03 01/23/19
$ Per Pelt 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00-0.50-1.00 PREMIUM UNSHORN LAMB PELT PRICES FOB, Weekly JAN APR JUL OCT Avg. 2016-17 2018 2019 Data Source: USDA-AMS S-P-10 01/23/19
$ Per Cwt. 430 BOXED LAMB SINGLE LEG PRICES Trotter Off, 5 Day Rolling Average 410 390 370 350 330 310 JAN APR JUL OCT Avg. 2013-17 2018 2019 Data Source: USDA-AMS S-P-14 01/23/19
$ Per Cwt. 950 BOXED LAMB RACK PRICES Medium, 5 Day Rolling Average 900 850 800 750 700 650 JAN APR JUL OCT Avg. 2013-17 2018 2019 Data Source: USDA-AMS S-P-16 01/23/19
$ Per Cwt. 395 NATIONAL LAMB CUTOUT VALUE Gross Carcass FOB, 5 Day Rolling Avg 385 375 365 355 345 335 JAN APR JUL OCT Avg. 2013-17 2018 2019 Data Source: USDA-AMS S-P-18 01/23/19
$ Per Head 70 LIVE TO CUTOUT PRICE SPREAD Monthly 60 50 40 30 20 10 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Avg. 2012-16 2017 2018 Data Source: USDA-AMS, Compiled & Analysis by LMIC 1/23/2019
Cents Per Pound 790 RETAIL ALL LAMB FEATURE PRICE Monthly 770 750 730 710 690 670 650 630 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Avg. 2012-16 2017 2018 Data Source: USDA-AMS 1/23/2019
$ Per Head 180 160 140 120 100 80 60 40 CUTOUT TO RETAIL (FEATURE) LAMB PRICE SPREAD Monthly 20 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Avg. 2012-16 2017 2018 Data Source: USDA-AMS, Compiled & Analysis by LMIC 1/23/2019
Index Value 120 RETAIL ALL FRESH BEEF DEMAND INDEX Third Quarter, Using CPI 1990=100 100 80 100 99 91 89 86 84 75 73 75 77 82 82 83 85 92 87 83 83 78 74 75 76 78 79 86 93 88 89 86 60 40 20 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Data Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC
Summary Expect Lamb Prices to Climb Closer to Last Couple Years Production near 2018 Questions on demand Large Cold Storage Stocks Imports Large Until Late in Year Likely Volatile Prices Remain
Prices for 2017-2020 3 Mkt 60-90 Feeder Natl. Direct Sltr Lambs 2017 192.71 300.21 2018 I 214.43 262.46 II 194.77 276.30 III 145.03 281.87 IV 156.91 271.17 2019 I 175-190 260-270 II 165-180 274-280 III 150-170 276-285 IV 160-190 266-274 2020 I 180-195 260-269 II 175-185 270-280 III 155-175 273-288 IV 175-184 262-279
$ Per Cwt. 300 280 260 240 220 200 180 160 140 120 100 TRADITIONAL vs NON-TRADITIONAL LAMB PRICES 60-90 lbs Live, Weekly 2018 APR JUL OCT 2019 3-Mkt (CO, SD, TX) Feeder New Holland, PA Slaughter Data Source: USDA-AMS, Compiled & Analysis by LMIC
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 98.0 FI As A Percent of Commercial Lamb Slaughter 96.0 94.0 92.0 90.0 88.0 86.0 84.0