Lamb and goat prices have been on the roller coaster over the last couple of years. After more than a year of depressed prices after the collapse in 2012, lamb prices started to rebound in late 2013. Goat kid prices shared a rebound in late 2013, as well. The big question is can this rally be sustained in the new year.
A host of problems, including high retail prices that dampened consumer demand, delayed live animal marketings, heavyweight carcasses, and poor quality, led to a market price collapse in 2012 that endured through most of 2013.
But conditions were very different in 2013 as the industry moved lambs through the system in a much more timely manner. Throughout the middle of 2013 lamb slaughter exceeded that of 2012, but the weights were significantly lower. Dressed weights averaged as much as 10 pounds below 2012. By the fourth quarter of 2013 lamb production was down close to 4.5 percent below the year before. The U.S. market also absorbed more lamb imports in 2013 than in 2012.
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The more manageable supply and quality situation set the stage for a lamb price rally. The industry may also be benefiting from some demand “rebuilding” following 2012. San Angelo feeder lamb prices increased from about $100 in late summer to over $190 per hundredweight in mid-Fall. The wholesale lamb market increased, as well, with prices for rack of lamb, shoulders, legs, and the wholesale cutout increasing to levels not seen in more than a year.
Based on manageable supplies and timely marketings, feeder lamb prices may average above $150 per hundredweight in 2014. That would be the highest average price since 2011. A key factor will be the ability of the retail market to support higher prices for lamb.
Goat kid and yearling prices, as reported by the San Angelo auction market, staged a strong seasonal rebound in the fall of 2013. Number 2 kids, 40-60 pounds, exceeded $180 per hundredweight by mid-fall while No. 1 kids were over $200 per hundredweight.
This year’s price rally follows the seasonal pattern of higher prices late in the year. But these higher prices have been supported by reduced federally inspected goat slaughter. Slightly lower slaughter levels compared to 2012 follows the available goat herd inventory data from USDA. That data has shown a decline in goat inventory over the last couple of years. It’s likely that drought in many parts of the country over that time has had an impact on goat numbers.
It is likely that slightly smaller production levels will lead to slightly higher prices in 2014 compared to 2013. The goat market may also get some help from higher lamb prices in those markets where there is some substitution.