Goat prices spent most of 2015 at historically high price levels, while large stocks weighed down the lamb market. The new year is likely to bring more of the same. Goat prices may reflect competition from cheaper meats. The lamb market will likely struggle through large supplies.
Goat market: The goat market featured an interesting dynamic in 2015: goat meat production generally declined compared to the previous year. Federally inspected goat slaughter was below the year before, as were animal weights.
Reduced production generally reflected a smaller flock inventory. Goat prices reflected the reduced production by remaining well above historical averages. Kids weighing 40 pounds to 60 pounds at San Angelo, Texas, averaged about $290 per cwt through the first half of the year before declining to about $260 in midsummer, then building, seasonally, late.
Historically strong prices reflect continued opportunity for goat meat producers. Generally lower production and historically high prices should provide profits for producers and lead to some flock expansion.
Lamb market: By the end of 2014, the amount of lamb in cold storage stocks had hit an estimated 104 percent of lamb production in that quarter. Throughout 2015, lamb stocks were close to 90 percent of production.
Part of the reason for large stockpiles was a dramatic increase in imported lamb. Imports increased due to favorable U.S. lamb prices compared to other world markets and a strong dollar.
San Angelo 60 pound to 90 pound lamb prices and carcass lamb prices remained surprisingly close to year-ago levels until about the last third of the year, when the effect of large stocks began to be felt. Lambs weighing 60 pounds to 90 pounds at San Angelo averaged about $190 per cwt for the year through August, very similar to the year before, then began to slide.
It is likely that feeder lamb prices will continue to slide lower in 2016 compared to the year before. Large lamb supplies, in the form of stocks held in cold storage and imports, will keep a lid on any price growth.
Domestic production is projected to increase about 2 percent in 2016. Some modest flock growth is expected, based on returns and industry efforts to boost supplies. The key to lamb prices in 2016 will be how well the industry manages to reduce stocks to more manageable levels.