State of the Ontario Sheep Industry Report - 1999

Table of Contents

1. Sheep & Lamb Inventory - Canada
2. Sheep & Lamb Inventory - United States
3. Sheep & Lamb Inventory - International
4. Market Prices - Ontario
5. Market Prices - United States
6. Slaughter - Canada
7. Slaughter - United States
8. Imports - Dressed Meats
9. Exports - Dressed Meats
10. Import of Live Sheep & Lambs from United States
11. Export of Live Sheep & Lambs from United States
12. Purebred Registrations
13. Wool Market

Sheep & Lamb Inventory - Canada

Statistics Canada reports a continuing increase in sheep and lamb numbers as of July 1, 1999. The estimated total inventory of sheep and lambs at July 1, 1999 was 885.4 thousand head, up 6.7 percent from July 1, 1998's estimate of 829.8 thousand head. Canada's flock now stands at 449 thousand breeding ewes, 23.2 thousand breeding rams, 107 thousand replacement lambs and 306.2 thousand market lambs. Ontario and Quebec showed the greatest increases in their breeding flocks, from 1998 (13.8 and 13 thousand head respectively). All other provinces, with the exception of Alberta, showed increases in breeding ewe numbers ranging from 3.4 percent for British Columbia, to 8.7 percent for Manitoba.

Table 1. Sheep & Lambs on Farms, by Province, July 1, 1999

Ontario's flock has shown steady increases in the past 4 years with 1999's breeding numbers increasing by 10.7 percent compared to 1996, and the number of market lambs increasing by an astounding 29.5 percent to 82 thousand head, during the same period. Ontario accounts for 29.9 percent of the national breeding flock, with Alberta following with 23.5 percent, and Quebec rapidly narrowing the gap with 20.8 percent of the national flock.

Figure 1. Sheep and Lambs on Ontario Farms - July 1, 1996-1999. Source: Statistics Canada

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Figure 2. Canada's Breeding Flock - July 1999. Source: Statistics Canada

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Sheep & Lamb Inventory - United States

The United States Department of Agriculture (USDA) released the July 1, 1999 sheep inventory estimate on July 16th. According to the report, there were 9.0 million head of sheep in the United States on July 1st, 4.3 percent fewer than one year ago. The breeding sheep inventory declined to 5.35 million head, 4.0 percent smaller than 1998's but slightly larger than January's count.

Of the July 1st, 1999 breeding flock, 4.38 million head were ewes one-year and older; 215,000 head were rams one year old and older; and 755,000 head were replacement lambs (including newborn lambs).

According to the July 1st inventory estimates, there were 3.575 million head of market lambs available in the U.S., 4.4 percent fewer than a year ago. The following table compares July, 1998 and July, 1999 U.S. market lamb inventory by weight groups:

The 1999 U.S. lamb crop is estimated at 4.75 million head, down 5 percent from the 1998 lamb crop of 5.01 million head. Lambs born during January through June, 1999 totaled 4.21 million head, or 89 percent of the yearly total. An additional 540,000 head are expected to be born during the period July through December, 1999.

Sheep & Lamb Inventory - International

Estimated inventory of Australia's flock, for March 31, 1999, indicates very little change in the past year, and stands at 117 million head. The New South Wales and Western Australia flocks accounted for 35 percent and 23 percent of the national total, respectively.

The forecast for the number of ewes to be mated during the year ended March 31, 2000 was estimated at 52.9 million, similar to the previous season. With declines in wool prices, fewer ewes are being mated to Merino rams, instead being put to short-wooled rams. (Source: Australian Bureau of Statistics website)

Early estimates indicate the United Kingdom flock will decline by at least 1 percent by the end of 1999 to 42 million head. Very poor lamb and cull ewe prices continue to plague UK farmers. Prices paid for cull ewes is 40 percent below July of last year, while market lamb prices are down 28.7 percent to 73.8 p/kg liveweight. A year ago, producers were receiving 103.5 p/kg for finished lambs. This has resulted in a corresponding softening in breeding stock prices with first sales of the season showing declines of 40 percent for breeding ewe lambs. (Source: Meat & Livestock Commission Report, Farmers Weekly - August, 1999)

Market Prices - Ontario

Average prices received for 80 to 94 pound lambs in 1998 were 5.7 percent lower than those received in 1997 for producers in Ontario. This trend has continued during the first six months of 1999, with prices for 80 to 94 pound lambs averaging about 5 percent below the first half of 1998. However, Ontario markets continue to remain relatively strong compared to other regions of Canada, the United States, and International markets. Comparing prices received for 80 to 94 pound lambs over the past five years, Ontario producers continue to get higher returns than counterparts in other major lamb producing provinces, Quebec, Alberta; and the U.S.

Table 4. Summary of 1998 marketings for Ontario and St. Hyacinthe, Quebec are shown below.

Figure 3. Monthly Average Price - Ontario Lambs 80 - 94 lbs.

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Ontario introduced a significant change to the lamb price reporting system. As of September, 1998 the category for lambs weighing 50 - 79 pounds has been divided in two: lambs weighing 50 - 64 pounds and lambs weighing 65 - 79 pounds. This should be beneficial to producers in their market decision making process, by enabling them to closely monitor price changes for the types of lambs they produce.

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Market Prices - United States

Although August's lamb prices have recovered somewhat from July's low of $70.5 US per hundredweight, they are still 2.4 percent lower than a year ago. San Angelo, Texas prices were $80.5 US per hundredweight for choice slaughter lambs during August. Feeder lambs are trading about 4.5 percent lower than a year ago.

The United States government introduced higher duties for the next three years on all imported lamb. Imports up to quota levels set at 1998 import levels will be subject to a 9% duty, while imports above the quota will face sharply higher tariffs, starting at 40% in the first year, and then declining. Lamb meat from Canada and Mexico are excluded from the import restrictions.

As part of the assistance package, the American sheep industry is to receive $100 million over the next three years as funding for productivity improvements, market promotion, animal health and domestic purchases.

Slaughter - Canada

Canadian slaughter of sheep and lambs for the first 6 months of 1999 increased 5.9 percent to 162,969 head slaughtered in federal and provincial inspected facilities compared to the same period in 1998 when 153,888 head were slaughtered. This increase is a result of Ontario and Quebec posting increased slaughterings of 16 and 9.3 percent, respectively. Ontario continues to have the largest combined slaughter, accounting for 58 percent of all sheep and lamb slaughtered in Canada, while Quebec makes up 24 percent, the western provinces 17 percent and the Atlantic provinces only 1 percent. Slaughterings in the western provinces declined by 15.7 percent to 28,176 head while slaughterings in the Atlantic provinces declined 52.6 percent to 1,796 head.

Figure 4. Canada: Regional contribution to sheep and lamb slaughterings (1994-1998). Source: Statistics Canada

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Figure 5. Canada: Sheep and lamb slaughterings January - June 30th, 1999. Source: Statistics Canada.

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Slaughter - United States

United States slaughter estimates for the first half of 1999 continue the downward spiral that has been occurring for the past five years. Slaughter to July 1st was 2.1 million head, down 6 percent from a year ago.

Figure 6. U.S. monthly commercial slaughter of Sheep for 1997, 1998 and 1999. Source: USDA.

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Imports - Dressed Meats

Australia remains as our major supplier of mutton. During 1998, Canada imported 1,218 metric tonnes of mutton from Australia out of total mutton imports of 1,804 metric tonnes. Mutton cuts, bone-in, continues to account for most of the mutton imports at 1,170 metric tonnes, virtually unchanged from 1997. Imports of mutton carcasses showed a 23 percent decline at 365 metric tonnes, while boneless mutton showed a 63 percent increase at 269 metric tonnes when compared to 1997 figures. In the first six months of 1999, 1,130 metric tonnes of mutton were imported into Canada, a 25.6 percent increase over the same period last year.

Dressed lamb imports were 8.6 percent higher (9,610 metric tonnes) in 1998, compared to 1997 (8,850 metric tonnes). New Zealand continues to supply the majority of lamb that Canada imports, accounting for 74.7 percent (7,174 metric tonnes) of dressed lamb imports in 1998. Lamb cuts with bone-in accounts for the largest portion of dressed lamb imports and saw a 17 percent increase (7,549 metric tonnes) compared to 1997 figures. During the first six months of 1999, 5,044 metric tonnes of dressed lamb was imported, a 7.8 percent increase over the same period last year. True to form, New Zealand continues to account for most dressed lamb imports (77.1 percent) in 1999.

Exports - Dressed Meats

Canada exports very little dressed lamb and mutton, compared to the amounts we import. However, exports in 1998, continued their upward trend after recovering from 1996's low. In 1998, all exports were of dressed lamb (427 metric tonnes), with no mutton exports. This represents a 52 percent increase over 1997 figures. Exports to the United States accounts for 69.6 percent of all exported dressed lamb with 19.9 percent (85 metric tonnes) going to Mexico. Mexico became a new export market for Canadian lamb in 1997, accounting for 70 of the 281 metric tonnes of dressed lamb exported in 1997. Most Canadian dressed lamb is exported as cuts with bone-in, representing 77.5 percent of 1998's export volume.

Figure 7. Dressed lamb and mutton imports in metric tonnes for 1994, 1995, 1996, 1997 and 1998. Source: Red Meat Division, Agriculture and Agri-Food Canada.

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Figure 8. Dressed lamb and mutton exports in metric tonnes for 1994, 1995, 1996, 1997 and 1998. Source: Red Meat Divison, Agriculture and Agri-Food Canada.

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Import of Live Sheep & Lambs from United States

Imports of all sheep and lambs from United States totalled 14,373 head for 1998, an increase of 40.8 percent over 1997.

Import of slaughter sheep and lambs for 1998 from United States totaled 7,386 head, down 8.3 percent compared to 1997. The majority of these came to plants in Ontario (6,775 head) with the rest going to plants in Quebec. To June 30th, 1999, 2,193 head of slaughter lambs have been imported, less than half the numbers imported during the same period in 1998 (5,615).

No feeder sheep and lambs were imported during 1998, or during the first six months of 1999.

Table 5. Sheep and lambs imported from the United States - 1998. Source: Red Meat Division, Agriculture and Agri-Food Canada.

Export of Live Sheep & Lambs from United States

Exports of all sheep and lambs to the United States totaled 46,061 head for 1998, an increase of 14.6 percent over 1997. Feeder lambs account for the majority of these, with 30,405 head (10.6 percent more than in 1997) going to feedlots south of the border. All of these lambs originated in Alberta, Saskatchewan and Manitoba. This represents a considerable increase when compared to 1996, which saw no activity in export of feeder sheep or lambs.

Slaughter lamb exports to the United States continued the downward slide started in 1996. In 1998, Canada exported 33.4 percent fewer slaughter lambs (11,996 head), compared to 18,006 head during 1997, and 43,317 in 1996. The majority of 1998's lambs were from Manitoba (7,517), Saskatchewan (835), and Alberta (3,493). The slaughter lambs exported from Ontario in 1998 (129 head) went to plants in Michigan and New York.

Table 6. Sheep and lambs exported to the United States - 1998. Source: Red Meat Division, Agriculture and Agri-Food Canada.

Exports of lambs in the first half of 1999 declined to 26,700 head from 29,141 head, down 8.4 percent over the same period in 1998. All of these lambs originated in Alberta, Saskatchewan and Manitoba.

Figure 9. Imports of Live Sheep and Lambs from U.S. - 1998. Source: Red Meat Division, Agriculture and Agri-Food Canada.

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Figure 10. Export of Live Sheep and Lambs to U.S. - 1998. Source: Red Meat Division, Agriculture and Agri-Food Canada.

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Purebred Registrations

Most recent registration figures available are for 1997. Total sheep registrations in Canada for 1997 increased to 14,138 head, representing an increase of 13.7 percent from 1996. Katahdins accounted for the largest number of registrations (3,106 in 1997 compared to 577 in 1996). The Suffolk breed had the second largest number of registrations (2,556 compared to 2,638 in 1996), with the Dorset breed coming in a close third with 2,304 registrations, followed by the Rideau Arcott breed with 895 animals registered, and the Romanov breed with 839 animals registered.

Quebec continues to lead registrations for the Dorset breeds with 1,146 head registered, and for the Romanov breed with 633 head registered. Ontario accounted for the highest number of Suffolk registrations at 898 head, as well as for the highest number of Rideau Arcott registrations at 611 head.

Canadian Purebred Sheep Registrations - Breeds Registering More than 50 Animals in 1997. Source: Red Meat Division, Agriculture and Agri-Food Canada.

Wool Market

Wool markets continue the decline experienced in the past several years. This is being blamed on the collapse of the Asian economy, subdued Chinese markets, and a flood of cheap imports of woolen goods onto the North American market. The Australian government has frozen sales of wool from their stockpile for the remainder of the 1999 season.

Canadian producers are receiving about 50 percent less for their wool compared to a year ago, as are producers in the United Kingdom. Alternative marketing avenues, including further processing, can be viable options for the producer with strong marketing skills and close proximity to large numbers of "wool buying" customers. Regardless of method of sale, proper handling and skirting of the raw wool will ensure Canadian wool maintains its quality status with buyers.

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