Since I raise sheep for meat, I am always watching the sale price of market lambs at the various sheep auctions in the area where I live. There are three sheep auctions I monitor weekly.
After a little over a year of really high market lamb prices, the market lamb prices dropped this past saturday. I knew it was going to drop, just not when. While the market lamb price is still high, it is not down to the level I consider “normal”. I figure the market is on the normal downward trend the has been usual for the years preceding the Covid-19 panadamic.
I was speaking with a sheep and goat processor at the sheep and goat auction I attended this past Saturday. We were talking about the drop in price. I made the comment that although the price had dropped it was still high compared to the past normal years. They agreed, and like myself figured the market lamb price is back to the usual downward trend. They responded that they calculate a sheep farmer can make a profit if the market lamb price for 55 pound sheep is $2.00 per pound. I agreed, as long as feed prices do not continue to climb.
Since the majority of the market lambs at the auction are purchased for meat processing, I asked them if the live price drops first or the carcass price drops first?
They informed me the carcass price always drops first, then the live market lamb price drops. They continued to inform me that our area is unique in the fact there are a lot of backdoor meat shops for the ethnic population of the area. These backdoor meat shops do not purchase on the national auction, and their carcass prices will change daily. My friend sells carcasses locally but also nationally. For their local customers, they have to watch the carcass prices in our area daily in order to stay competitive and not lose a consistent client.
The meat processors can not stay in business without the sheep farmer. My friend believes this. If the processors and their buyers do not pay enough for the market lambs so the sheep farmer can keep producing lambs, then the processors will not have meat to sell to consumers. We the sheep farmers and the processors are dependent on each other in order to provide meat to consumers.