Ranchers balk at sheep prices, suspect fleecing

When sheep ranchers suspect they’re getting fleeced, things get ugly. One year after receiving record prices for their lambs, ranchers have seen payments collapse to 86 cents a pound, a price too low to even pay their bills. They suspect the nation’s biggest meatpacking companies of fixing prices, and they are leaning on Agriculture Secretary Tom Vilsack to investigate using the Grain Inspection, Packers and Stockyards Administration. GIPSA is supposed to ensure market fairness. “The gist of it is, because of the drastic price swing, a lot of senators and representatives have been asked to send some letters to Vilsack, asking him to look into this,” said Randy Tunby, Montana Woolgrowers Association president. Ranchers expect prices to fluctuate and plan accordingly, but they say this year’s market collapse was unforeseeable. “We were selling a truckload of lambs for $120,000 to $130,000, now this year we’re getting $40,000,” said Mike Hollenbeck, of Molt. Hollenbeck and his son Henry see several factors at play in the lamb market, including severe drought and rising feed costs. But the biggest factor, they say, is the shrinking number of American meatpackers butchering lamb. The American sheep industry has been in steady decline since the 1884, when the sheep population peaked at 51 million head, according to USDA. Today, there are roughly 6 million sheep in the United States. The number of sheep ranches is also declining, having gone from 105,000 in the 1990s to roughly 80,000 today. In the Rocky Mountain states, the sheep population dropped 21 percent between 1987 and 2007. There are just two major lamb packers — Superior Farms, based in Davis, Calif., and Brazilian-owned JBS USA, of Greeley, Colo. With that kind of market concentration, it doesn’t take much for one company’s decisions to send ripples through the economy. If one decides it has enough lambs on hand and cuts back on buying, lower prices soon follow, which thin ranchers’ wallets. This year, there’s been an oversupply of lambs ready for slaughter as high feed costs, extreme drought and challenging economic conditions play out. Consequences of that oversupply have rippled into the market of feeder lambs — that is, lambs fresh off the farm that need weeks of fattening up in feedlots before slaughter...more