SHEEP  FLOCK  DECLINES

NASS also released the July 1 Sheep report on Friday, which reported a rather notable yearly decline in the U.S. sheep flock and included a further downward revision to last year’s mid-year inventory numbers as well.  According to the report, the U.S. sheep and lamb flock totaled 7.35 million head, 250 thousand head less than last year and 5 percent below 2005’s.  The further decline in numbers this year in both the January and July reports has been reflected in a reduction in lamb slaughter.

The number of breeding ewes one year and older was reported at 3.62 million head versus 3.71 million head a year ago and 160 thousand head below 2005’s mid-year number.  The number of market lambs, as expected was down nearly 5 percent from last year at 2.86 million head, while the number of market sheep (i.e. cull animals) was up 10 thousand head from last year.  Of note, both the breeding ewe and market lamb inventories were the smallest mid-year numbers reported thus far by USDA. 

According to the report, producers indicated that the number of replacement lambs at mid-year was 620 thousand head, 25 thousand head or 4 percent less than the prior year and well below 2005’s number.  The 2008 lamb crop is projected to be 3.97 million head, 2 percent smaller than last year due to a smaller breeding flock.  As of mid-year, nearly 88 percent of the lamb crop was already on the ground with an additional 490 thousand lambs expected to be born later this year.

Looking ahead, feeder and slaughter lamb prices are expected to be well above a year ago given tighter supplies.  For the year, slaughter lamb prices are forecasted to average 6 to 8 percent above last year’s, while feeder lamb prices feeling the effects of corn this year should average around 4 to 5 percent stronger on an annual basis.