July 2009
For What It's Worth

Goat and Sheep Market Cycles

Upon reviewing a recent sales report (see report) from United States Department of Agriculture/Tennessee Department of Agriculture (USDA/TDA) Dept Ag Market News and being familiar with prices for the past few months, it gives a "snapshot impression" goat and sheep prices are on the decline until late fall. That is to be expected given the time of year. The mad dash to take advantage of good prices is dwindling; just take a look at recent receipts in the report and you will see numbers have dropped from the previous sale. Easter (Christian and Orthodox) along with most ethnic and faith-based holidays are behind us, which decreases demand and price paid. However, we can rely on the fact that from late fall into winter, prices will begin to increase as ethnic and faith-based holidays return to the calendar.

These are normal marketing trends for the goat and sheep industry.

Monday, May 11, 2009
Tennessee Sheep and
Goat Auction

Tennessee Livestock Producers Graded Goat and Sheep Sale
Columbia, TN
New Sale Barn
May 8, 2009
(Second and fourth Friday
of each month)

Receipts: 776
(518 goats; 258 sheep)
Last Sale: 1,102

Goats sold per hundred weight (cwt) unless otherwise noted, weights - actual or estimated.

Slaughter Classes:
Kids -
Selection 1
25-35 lbs ——————
36-50 lbs 131.00-168.00
51-65 lbs 161.00-166.75
66-80 lbs 135.00-166.00
81-100 lbs 141.00-150.00
Selection 2
25-35 lbs 142.00-145.00
36-50 lbs 120.00-139.50
51-65 lbs 121.00-141.00
66-80 lbs 117.50
81-100 lbs ——————
Selection 3
26-35 lbs 109.00-133.00
36-50 lbs 126.00-138.00
51-65 lbs 122.00-134.00
66-80 lbs ——————
76-85 lbs ——————
Feeders Selection 3
24-40 lbs 100.00-142.00

Yearlings
Selection 2-3
50-70 lbs 91.00-116.00

Bucks/Billies
All Wgts mostly 68.00-80.00

Nannies/Does
All Wgts mostly 45.00-65.50

SHEEP

Slaughter Lambs-Includes all breeds
Choice and Prime 20-40 lbs ——————

Choice and Prime 40-60 lbs 116.00-158.00
Good 105.00-121.00
Choice and Prime 61-80 lbs 111.00-120.00
Slaughter Ewes Utility and Good
All Wgts 35.00-49.00
Slaughter Rams:
All Wgts 34.00-41.00

Source: Tennessee Dept of Ag-USDA Market News; Nashville, TN; Lewis Langell, OIC; (615) 837-5164; www.ams.usda.gov/mnreports/nv_ls320.txt

The main reason many refer to USDA/TDA Dept Ag Market News and the Columbia, TN, New Sale Barn is this facility continues to be the premier sale facility for the Southeast U.S. By premier I mean it tends to draw the highest number of animals and bring the best prices year-round; and have for years. Until recently, this facility was located slightly further north and was known as Thompson Station; but they relocated less than a year ago. Yes, I know we are in Alabama and there are numerous livestock sales facilities, but large volume and high prices draw attention.

Spring 2009 has been an interesting marketing year for the goat and sheep industry. At the sale barns and private treaty sales, we have seen prices-paid rise and sustain higher than average prices. Opinions vary on why these trends of desirable prices have remained on the high-side for longer than normal.

In my opinion, it is a combination of factors. Primarily it can be attributed to the past three years of drought and the fact people made a concerted effort to cull their animals in order to sustain drought-ridden pastures while minimizing feed expenses. It appears the drought is over and normal conditions have returned for livestock production. Pastures are lush, hay is abundant and feed costs are down. Considering USDA Ag Statistics for 2009 show numbers of goats within Alabama have decreased by approximately 10,000 since the 2008 report, you have an economic model for supply, demand and price variation.

The scenario for small ruminant production in 2009 is looking good. I suspect many producers are considering small ruminant production as a viable option this year and retaining replacement animals rather than culling ruthlessly to reduce inventory and feed expenses. The number of goats and sheep destined for the terminal market (through sale barns and to processors) has peaked. With spring, summer and ideal conditions, people are considering farming again. Adding to that, the hoopla over sustained high prices for meat goats and sheep, and we can expect a resurgence of interest in goat production. Also, the fact prices at private treaty sales (show quality animals) are making a "come back" to normal levels; people will begin talking about raising goats again.

We can then expect another simple economic trend: production will increase, demand will remain seasonally consistent, inventories will increase and prices will decrease.

It’s all about trends in agriculture production combined with simple economics. Being knowledgeable of these trends allows the long-term farmer to continue farming despite trends and cycles; lack of knowledge and experience is why short-term farmers tend to appear in good times and disappear in bad times. Anticipating when to increase or decrease production, and when to save for bad times is part of the risk farmers take. Understanding trends in conjunction with long-term planning and setting goals is most likely to insure the sustainability of the sheep and goat industry.

Robert Spencer is a contributing writer from Florence.