The federal government will investigate rancher complaints of unfair lamb prices, which have collapsed for producers even as market prices have skyrocketed.
The Grain Inspection Packers and Stockyards Administration notified producers earlier this week that its Denver office is looking into the drastic changes in price spreads.
Ranchers have seen lamb profits evaporate as prices of more than $2 a pound a year ago fell to less than a dollar this fall, while at same time retail prices hit $7 a pound in some areas. The U.S. Department of Agriculture responded to the collapse by buying lamb, which should have helped ranchers and closed the price spread. But ranchers say the benefits of the federal commodity purchases never reached the farm and ranch gate. Severe drought in sheep country helped trigger the purchases.
“There’s no drought assistance for meatpackers,” said Peter Orwick of the American Sheep Industry. “I can see where the spread is. I can’t see where they helped the farm-ranch gate price.”
Lawmakers from several Western states, among them Democratic U.S. Sens. Max Baucus and Jon Tester of Montana, wrote to the USDA in October requesting the investigation. So did the Billings-based Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, which saw similarities between pricing problems for lambs and cattle.
“We believe the sheep industry is the canary in the coal mine for the cattle industry,” said Bill Bullard, R-CALF USA chief executive.
R-CALF told lawmakers that the sheep industry was being destroyed by the monopolistic practices of meatpackers and the misguided federal trade policies, which had allowed more lamb and mutton to be imported into the United States than American ranchers produced. Those imports increased as Americans ate more lamb, essentially meeting market demand that should have benefited U.S. ranchers.
Similar changes in supply are burdening American cattle ranchers, Bullard said. Sheep ranchers need to contact investigators soon, Bullard said.