Manitoba’s sheep producers have a lot to be happy about when it comes to marketing their animals.
The sector is enjoying some of the highest meat prices in recent memory.
Why it matters: Like hogs and cattle, sheep producers say their markets have been hugely impacted by the COVID-19 pandemic, but in a very different direction.
According to the province’s weekly livestock market report, lambs sold Nov. 18 in Winnipeg ranged from $235-$256 per hundredweight for lambs 110 pounds and up, to $270-$302 per hundredweight for lambs under 60 pounds. Sheep, meanwhile, ranged from $150-$170 per hundredweight.
The same time last year, lambs sold in Winnipeg ranged from $135-$145 per hundredweight for lambs 80-109 pounds, to $134-$180 for lightweight lambs. Ewes brought in $90-$106 per hundredweight.
Manitoba Sheep chair Morgan Moore says prices have been at least $1 a pound higher than this time in 2019, and in some weight classes have rose close to double what the sector saw last year.
“We’re seeing record lamb prices,” Moore said. “Especially given the time of year where this is typically our lowest ebb in the lamb pricing.”
Those prices may have much to do with the drop in foreign shipments in the wake of COVID-19, and the corresponding jump in demand for domestic lamb, Moore added.
“Just because of the reduction of ocean-going freight that would come to our shores, those same vessels would normally be bringing frozen lamb and mutton products to us,” he said. “Because they’re not bringing the other goods that we typically would be importing, they’re also not bringing lamb.”
According to data from Transport Canada, international freight handled at four major container ports decreased 10.3 per cent from August 2019 to August 2020.
Lamb imports to Canada have dropped 5.2 per cent so far in 2020 compared to the same time last year, according to data from Agriculture and Agri-Food Canada. Canada saw about 15.86 million kilograms of lamb imports as of Nov. 21, AAFC reports, compared to just under 16.73 million kilograms by the same time in 2019. Mutton imports however, although dealing with much smaller volumes than lamb, have seen a 40.6 per cent jump in year-to-date imports for 2020, thanks to gains in frozen meat.
“The meat side of the industry right now is probably at the highest point that we’ve ever seen,” Moore said.
Wool market down
Producers are, however, expecting a less sunny outlook for their wool.
Trade conflicts between the U.S. and China were already putting pressure on the global wool market last year, according to a fall 2020 business update from the Canadian Co-operative Wool Growers (CCWG).
“The end result was that new business was very difficult to conclude and many countries carried significant stock of greasy wool, processed wool and unsold textiles into the 2020 wool-marketing season,” the CCWG said, although the organization noted that the start of 2020 carried some optimism that trade winds would right themselves.
Those hopes were dashed by the COVID-19 pandemic. Lockdowns across the globe caused widespread disruption in textiles. Clothing retailers were suddenly forced to close doors, while mills were suddenly laden with unexpectedly high inventory, as orders were cancelled and little new business emerged to fill the gap.
“In an unprecedented situation, the global wool market came to a virtual standstill as auctions in most countries and other wool services were cancelled or suspended,” the CCWG said. “In the textile industry it meant widespread mill closures with many more operating at significantly reduced capacity. Even today it is far from business as usual with many mills struggling to survive.”
The CCWG has announced it will be taking wool on consignment basis only until further notice and has laid plans to increase temporary storage space, if needed.
Wool depots are still taking shipments, Moore told producers during the Manitoba Sheep annual meeting earlier this month, “but it could be awhile before you see a wool cheque.”
Almost all of 2019’s wool supply, as well as this year’s volumes, are still sitting in storage, Moore told producers.
Wool is not a major income driver in Manitoba, however, Moore later noted. Instead, he said, wool income has become cost recovery for shearing, necessary for animal wellness. It typically costs producers about $5 a head to shear their sheep, he estimated.
“A lot of the broad, coarse and domestic wools haven’t been high-paying commodities for a number of years and so it’s basically just been the cost of doing business — shearing and hope that it would recoup the expenditure. But this year, it’s not even going to do that, for sure,” he said.
Market conditions for fine wools and fleeces is better, producers heard during the Manitoba Sheep annual meeting, although Moore pointed out that those generally make up a small portion of Canadian wool.
The CCWG is looking for alternate wool markets, such as personal protective equipment, filtration and insulation.
Lining still silver
Wool difficulties are not likely to offset the positive position of lamb however, Moore added.
“That’s not even really giving anybody any pause for consideration on the poor wool end,” he said.
Moore also pointed to the federal government’s plan to bring in over 1.2 million immigrants over the next three years, announced in October 2020. A significant portion of that population will likely already have a palate for lamb and mutton, he said.
“That bodes very well for the strength of our industry and the future of it, so I think it’s a very positive story,” he said.