An open letter to the US sheep industry from the American Lamb Board

The US lamb industry prospered:

➢ Lamb prices were at record highs due to reduced supply and strong demand.

➢ The national flock expanded.

➢ Sheep producer numbers grew.

➢ Less imported lamb entered the United States.

But 2012 ushered in ugly new realities:

➢ The 2011 Texas drought spread to the majority of the country.

➢ Grain and hay prices increased to some of the highest levels ever.

➢ Competition from imported lamb increased.

➢ Pelt (sheepskins) prices were much lower than in 2011.

➢ Consumers purchased less US lamb due to record prices at wholesale and retail levels for US lamb—a direct result of high live lamb prices.

➢ Prices paid to producers and feeders collapsed while costs rose sharply.

We will recover from the current situation (lamb prices are improving) but we need to recognize that the US sheep industry has been shrinking for decades.

➢ The US flock has declined from 50 million to 5 million (3 million breeding ewes) over 6 decades.

➢ Demand for US lamb has been declining steadily. It’s dropped over 50 percent in the last 20 years.

➢ Lamb from Australia and New Zealand now “own” 50 percent of the US market. Imported lamb usually costs less and is more consistent in quality than US lamb

➢ Lack of a world-class grading system for lamb.

➢ Lack of responsiveness to our customers by our industry.

➢ Packer/processor consolidation and production cost inflation.

➢ An inadequate price discovery and price reporting system.

➢ Tension among several segments of the lamb/mutton value chain.

What is the American Lamb Board (ALB) doing to address these challenges?

We’ve hired an outside firm with no prior affiliation to the sheep industry to conduct a candid assessment of the US sheep industry—and assist industry leaders in making the changes necessary to secure our long-term future.

How did the American Lamb Board decide to commission the assessment study?

In June the California Wool Growers (CWGA) asked ASI (American Sheep Industry) to host a summit to identify what went wrong and how to prevent it recurring.

ASI suggested that ALB take the lead on this, so ALB formed a committee drawn from all industry sectors to address the issue. The committee concluded that it would be best to first hire an organization to conduct an extensive industry assessment/evaluation.

What is the purpose of the study?

➢ To identify and analyze the key challenges facing the American Lamb industry,

➢ To propose the most effective solutions to those challenges.

➢ To develop a strategy for the industry to strengthen its short-term and long-term competitive advantage and return the industry to consistent profitability.

Who is funding the study?

The American Lamb Board assisted by a generous grant from the National Sheep Industry Improvement Center.

Who is conducting the study?

The Hale Group—a food and agri-business consulting firm. Bob Ludwig, who recently worked with the Pork Board on their latest strategic planning, will lead the study. He recently worked with the Pork Board on their latest strategic planning.

How long will the study take?

It will begin in mid-January and be completed by August 2013.

What are the major tasks involved in the study?

1. Conduct an assessment of the industry’s:

➢ Greatest strengths.

➢ Most serious weaknesses.

➢ Biggest opportunities.

➢ Most significant threats.

2. Determine how the American Lamb industry compares to its competitors and evaluate other major challenges facing the US lamb industry.

3. Prioritize solutions to these challenges. Include a description of the pros and cons of each solution.

4. Develop a roadmap to strengthen the industry and a consensus among the segments of the industry for the best corrective actions.

How will the industry be involved in the study?

ALB, ASI and the Hale Group are committed to obtaining the insights of as many as possible. Reaching conclusions with a broad consensus of the industry is critical. We cannot afford to conduct another study that produces “a nice report” with no changes implemented. We’re encouraging all sectors to get involved. Interested? Contact the ALB office at for more information.

How can I get more information about what the American Lamb Board is doing to support the industry and turn around the decline in demand?

➢ ALB just published their FY 2012 Annual Report. Copies are available by request. The board and staff encourage and welcome questions and feedback!

➢ ALB distributes a monthly newsletter that highlights program details and activities.

Sign up for the newsletter and/or request a copy of the annual report at