Exchange Rates And Their Effect On U.S. Sheep Industry

By Shannon Sand
SDSU Extension Livestock Business Management Field Specialist

Written collaboratively by Shannon Sand and Dave Ollila.

Per capita lamb and mutton consumption is fairly stable in the U.S. Imports of lamb have offset the decline in domestic production in recent years. Lamb and mutton imports, currently account for nearly half of U.S. consumption, are mainly from Australia (about 68-70 percent) and New Zealand (about 30-32 percent).

Global Drought Conditions & Lamb Supply

Drought conditions throughout much of the world during 2015-2016 (particularly in New Zealand) caused many of these producers to decrease their flock size, thus decreasing available world supply of lamb. The supply of lamb in New Zealand (NZ) dropped last year as producers were looking to deal with drought. The supply of lamb in NZ is expected to decline again this spring and drop by 2.9 percent. Slaughter rates in NZ have hit a record low in August. During this time less than 560,000 lambs were processed, a 34% decline from the same time last year. Hoping to cash in on higher prices U.S. lamb producers are learning that lower world supply has not necessarily translated into higher domestic prices for lamb.