Sheep Update

Livestock Update, September 2000

Scott Greiner, Extension Animal Scientist, Sheep, Virginia Tech

Lamb Meat Adjustment Assistance Package Finalized
In July 1999, President Clinton announced $100 million in assistance for the U.S. sheep industry as a result of the industry's successful Section 201 trade action. A portion of this assistance, $30 million, will be in direct payments to producers over a three year period ($10 million per year). The assistance package is broken down into two categories: Year 1 which runs from July 21, 1999, through September 30, 2000, and Years 2 & 3 which run from August 1, 2000, through July 31, 2002. Broad overviews of producer payments at this time are as follows:

Year 1:

1. Payment of up to $100 per ram purchased from 7/21/99 to 9/30/00 meeting the following criteria:
   1. 90 days or older at the time of purchase.
   2. Intended and used for breeding purposes.
   3. Owned for 90 days, and continue to be held when payment is made.
2. Payment of $.50 per head for sheep enrolled in a qualifying sheep improvement program such as the National Sheep Improvement Program. Maximum of $500 per operation.
3. Payment of 20% of total cost of facility improvements (such as new and improved feedlots and lambing sheds) with the following criteria:
   1. Improvements made between 7/21/99 and 9/30/00.
   2. Improvements used in the operation for at least 3 years.
   3. Maximum of $2500 per operation.

Years 2 & 3:

1. Payment of $3 per head for feeder lambs that meet the following criteria:
   1. Marketed during 8/1/00 through 7/31/02
   2. Owned by the operation for at 30 days before marketing
   3. Be thick-muscled and large-framed, as determined by USDA Agricultural Marketing Service (VDACS).
2. Payment of $5 per head for slaughter lambs that meet the following criteria:
   1. Marketed during 8/1/00 through 7/31/02
   2. Owned by the operation for at 30 days before marketing
   3. Carcasses must be USDA Quality Grade Choice or Prime
   4. Carcasses must be USDA Yield Grade 2
   5. Carcasses must have a muscling confirmation score of Average Choice or better
   6. Carcasses must have a 55 to 75 lb. dressed hot carcass weight
   7. An additional $3 per head will be awarded for slaughter lambs marketed from June 1 through July 31 (total of $8 per head payment)

Fall Lamb Marketing
Lamb prices in 1998 and 1999 have certainly not held true to typical seasonal trends. Normally, the highest prices for slaughter lambs are realized in the early spring, which coincides with seasonal demand for lamb products. In both 1998 and 1999, prices received in late summer-early fall for slaughter lambs were similar to the prices received in April. Decreases in numbers of lambs available for as well as decrease in imports compared to early spring have contributed to these prices. The U.S. sheep and lamb inventory numbers recently released indicate the national flock is still liquidating, down six percent from year ago levels. With fewer lambs available due the decline in ewe numbers, experts project prices to remain strong..

As fall approaches, producers with spring lambing programs are faced with the decision of selling feeder lambs or slaughter lambs. In most cases, the production of heavier slaughter lambs will generate more income for the producer. This may be especially true this year with cheap corn. With corn prices hovering around $2.00 per bushel, feed costs per pound of live weight gain in lambs will likely be around $.40 when corn is used with a protein supplement to feed lambs in a dry lot situation. Assuming a 100 pound feeder lamb is worth $.85/cwt., gross income per head is $85. If this 100 pound lamb is fed an extra 40 days, resulting in an extra 25 pounds of weight gain at a cost of $.40/lb., breakeven price for this 125 lb. slaughter lamb compared to marketing as a feeder is $.76/lb. An extra $5 to $10 per head may be realized when this 125 lb. slaughter lamb sells for to $.80/cwt. compared to marketing the 100 pound feeder lamb for $.85/lb. The last couple of years, higher prices have been paid for heavy slaughter lambs in the fall.

In Virginia, several lambs are sold directly of grass weighing 100 to 110 pounds. Many times these lambs are underfinished and will be purchased as feeders. This is typical for lambs sired by black-face rams, as the lambs are late maturing and are still growing at this stage. Typically, these types of lambs respond well to grain feeding and can be fed in a cost-effective manner.

Shepherd's Symposium Scheduled for January 5 & 6, 2001
The annual Virginia-North Carolina Shepherd's Symposium will be held Friday and Saturday, January 6 & 7, 2001, at the Sheraton Four Points Hotel in Harrisonburg. Please mark your calendars now and plan to attend this educational meeting and symposium. Speakers will cover a range of production, management, and marketing topics. Plans are also being made for a hands-on workshop session on Saturday. Details will follow, and registration information will be out in October. For more information, contact Scott Greiner, Virginia Tech, phone (540) 231-9159.

Virginia Bred Ewe Sale Scheduled for October 28
The Virginia Bred Ewe Sale will be held at the Rockingham County Fairgrounds in Harrisonburg, Va., on Saturday, October 28, 2000. A quality group of registered Dorset, Finn, Hampshire, Southdown, and Suffolk bred yearling ewes and ewe lambs will be offered for sale. New this year will be the addition of wool breeds. Pregnancy diagnosis using ultrasound will be conducted prior to the sale. For more information contact Scott Greiner, Department of Animal and Poultry Sciences, Virginia Tech, Blacksburg, VA 34061. Phone (540) 231-9159.

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