UP TO $10 MILLION AVAILABLE FOR FEDERAL PURCHASE OF LAMB

June 25, 2015

For Additional Information, contact:
Peter Orwick , 303-771-3500, ext. 33, porwick@sheepusa.org
Judy Malone , 303-771-3500, ext. 35, judym@sheepusa.org

DENVER, Colo. – USDA opens bid process for 640,000 pounds of lamb roast. Huge volumes of imported lamb, record levels of inventory in the coolers and a major swing in currency-exchange rates to the advantage of the importer have all pressured American lamb movement and price. The American Sheep Industry Association requested a Section 32 lamb purchase in an effort to strengthen a market that has faltered since late 2014, and to prompt stronger prices for lambs at the farm and ranch gate.

USDA Agricultural Marketing Service’s Administrator Anne Alonzo announced on May 22 the agency’s intent to make available up to $10 million to purchase lamb products for federal food nutrition assistance programs, including food banks. The Bid Invitation was issued on Wednesday, June 24, for 640,000 pounds of lamb leg roast, bone-in and boneless. Bids must be submitted by July 13 with acceptances being announced by midnight, July 17.

“Lackluster market-lamb prices and the inability to stay current with fed-lambs has plagued the market since last winter so, the Section 32 assistance from AMS is very welcome,” comments Burton Pfliger, N.D. producer and ASI president.

Declining prices justify this request as live, slaughter lamb prices at auction were about $20 per hundred weight lower during the first quarter of 2015 compared to a year ago.

At 36.8 million pounds, the amount of lamb and mutton in cold storage in March 2015 was 5 percent higher than the previous month and 40 percent higher year-on-year. For a perspective, that is nearly double the level of 2008.

In addition, the strength of the U.S. dollar is contributing to a higher volume of imported lamb and contributing to price pressure on the U.S. market. The magnitude of imports from Australia alone was up 4 percent year-on-year during the first quarter of 2015.

"ASI discussed the USDA commodity purchase program option with key lamb-processing companies and they are fully supportive of the request but strongly encourage that all expediency be undertaken due to the back-up of slaughter lambs in the feeding system,” concluded Pfliger.

The Section 32 purchase program makes funds available to the Secretary of Agriculture to purchase surplus food. The program is funded by tariffs collected on imported food and is designed to remove price-depressing surplus product from the market, thus supporting farm-gate prices. All lamb-product purchased through this process must be certified as American lamb.

ASI is an equal opportunity employer. It is the national trade organization supported by 45 state sheep associations, benefiting the interests of more than 79,500 sheep producers.

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