Tuesday, December 11, 2012

Sheep farmers hit by drought, high feed prices, low lamb prices and maybe market manipulation

The last few years have been particularly difficult for Western sheep farmers. "Skyrocketing feed costs, a brutal drought and plunging lamb prices have battered" the 80,000 sheep ranchers across the U.S., from small producers to large, Jack Healy of The New York Times reports. "It is the latest threat to shadow a Western way of life that still relies on the whims of summer rains, lonely immigrant sheep herders and old grazing trails into the mountains." (NYT photo by Matthew Staver: feedlot sheep)

Many ranchers have been forced to lay off workers, cut flocks and sell at a loss. Industry groups told Healy that many ranchers have left the business altogether. Colorado rancher John Bartmann told Healy he hass trimmed his 2,000-sheep flock by a third, and he expects to lose $100 on every lamb because of high fuel and feed prices.

The drought and economics take most of the blame, Healy reports: "The drought withered grazing grounds, killed off young lambs and dried up irrigation ditches, and a glut of meat and imported lambs from New Zealand helped send prices plummeting." But some ranchers and federal officials believe "The deck was stacked against the sheep ranchers by the small number of powerful feedlots that buy lambs, slaughter them and sell them to grocery stores and restaurants," Healy reports. As prices for ranchers fell to 85 cents a pound, consumers were paying $7 or more a pound.

The top four meatpacking companies control 65 percent of the lamb market, and "that kind of concentration makes it easier for a few powerful companies to manipulate prices to their advantage,"  Patrick Woodall, research director at Food and Water Watch, and environmental advocacy group, told Healy. Several Western senators and ranchers' groups lobbied the U.S. Department of Agriculture to investigate meatpackers that they suspected were hoarding sheep and keeping prices artificially low. The Grain Inspection, Packers and Stockyards Administration said it would investigate. (Read more)

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