Declining U.S. flock may lead to higher prices for wool

By CAROL RYAN DUMAS

Capital Press

Tighter supplies of lamb and wool should bode well for sheep producers in 2010, according to the report Price History and 2010 Outlook for PNW Livestock Prices.

The outlook report was released by the University of Idaho in collaboration with USDA and the Livestock Marketing Information Center.

"We could have a reasonably positive year," said Wilson Gray, livestock economist with the University of Idaho and an author of the report.

"Lamb and wool prices are up. Lamb and sheep numbers are down in the U.S. and worldwide, so supply is going to be tight," he said.

USDA's National Agricultural Statistics Service reported another year-to-year decline in the U.S. sheep and lamb flock. There were a total of 5.63 million head of sheep and lambs on Jan. 1, 117,000 head or 2 percent less than 2009 and the smallest U.S. flock ever reported by USDA.

There were 1.44 million head of market lambs reported, which was 60,000 head, or nearly 4 percent, less than 2009 and the smallest number reported since USDA began the survey.

"Looking ahead, the supply of market lambs will be tighter once again in 2010 which should be supportive to feeder and slaughter lamb prices this year," the report stated.

Overall, lamb prices are expected to firm this year as production tightens.

"In general, we're looking at about 5 percent improvement in lamb price this year from last year," Gray said.

On the wool side, Gray expects imports from Australia to be about the same and those from New Zealand to be down, partially from drought there and producers switching to meat breeds.

With world wool production coming down for two decades, in response to low prices and low demand, there's not a lot of stocks hanging over the market, Gray said.

While wool competes with synthetic fibers, China has emerged as a major user of wool and the Chinese economy is expected to continue improving as economic growth there continues to rise.

"Wool stocks are low, so I think we could probably see a 3 to 5 percent improvement on wool prices, too," he said.

Sheep and wool

Forecast annual average price for 2010

Slaughter lambs, dressed weight: $203-$209 cwt.

Feeder lambs, 60-90 lbs. live weight: $111-$116 cwt.

Wool, grease basis, farm: $0.85-$1.05 lb.

Price History and 2010 Outlook for PNW Livestock Prices by C. Wilson Gray, James Robb, Erica Rosa, http://www.cals.uidaho.edu/aers/deptpudaees2010.htm

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