Higher prices?

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Sugar Creek
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Higher prices?

Postby Sugar Creek » Tue Oct 22, 2013 3:50 pm

Amid all the doom and gloom, it is getting harder not to notice a move upward in the prices being offered at auction. Cries of $1.60 and higher at the last auction here in Kentucky and I saw some sell even higher on the internet at the Zumbrota, MN market today. Just a little over a month ago some nice lambs could be bought for 80 cents in Lexington.
Any ideas on what is going on? Is there hope enough for next year to keep back a few ewe lambs or better to just take them off and reap some prices we have not seen in a while?
Fred

Snuffy
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Re: Higher prices?

Postby Snuffy » Tue Oct 22, 2013 5:56 pm

I just bought 18 ewes and ewe lambs. They are REALLY NICE pure katahdins. I paid 105 each for them. I'm holding mine to Nov and selling then.

MRPittman
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Re: Higher prices?

Postby MRPittman » Wed Oct 23, 2013 10:22 am

Here is a link to prices at Newell SD October 17, 2013. Unfortunately we sold our lambs in September :(

http://www.stongelivestock.com/images/E0320101/S101713.pdf

sheepherder56
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Re: Higher prices?

Postby sheepherder56 » Fri Oct 25, 2013 11:31 pm

I just checked the lamb prices for Newell for yesterdays sale. Talk about phenominal!!!! Are we looking at another crash coming with prices like that or was it just a blip on the radar?

Rob Berntson

BIGIRON59
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Re: Higher prices?

Postby BIGIRON59 » Wed Oct 30, 2013 8:59 pm

nope. The feed cost per pound of gain is less than 1/2 of what it was last year. Based on that I would have expected to see feeders at least 50.00 higher. I would say that spread is because feeders are cautious. Here in august feeders were bringing same as fats, That just does not happen.
Starving sheepherder on the windblown tundra of Northwest Iowa

Sugar Creek
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Re: Higher prices?

Postby Sugar Creek » Wed Nov 06, 2013 8:12 am

Some of you know the dynamics of the lamb market more than I do. For the last month or six weeks the prices at New Holland have been generally going down or stagnating while the Midwestern markets have been going up in price.
I sold some cull ewes at Bluegrass yesterday for a price very comparable to the price being reported at New Holland the day before. The whole market was strong with many buyers who were bidding very aggressively for the largest run of sheep I have seen there in a long time. I had to wait in line for over an hour to unload. I usually just pull in and back my trailer up to the dock. The October holiday has come and gone, yet the market remains stronger.
Is the ethnic market shifting west?
I think that a surge in demand for feeders accounts for a part of this. I still wonder is something else is going on.
Fred

joyceheib
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Re: Higher prices?

Postby joyceheib » Wed Nov 06, 2013 8:09 pm

Some of it, on the heavies, are that they are going straight to market. Apparently there is a shortage on lambs ready for market. Some of it is New Zealand's drought and the fact they are not exporting any lamb. Also Australia is exporting to china. We sold in October and got a decent price, but seeing these 2.00 prices again is scary. Sure do not want to see another crash like last year's.
Joyce Heibertshausen
Alzada, MT

Bill Fosher
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Re: Higher prices?

Postby Bill Fosher » Thu Nov 07, 2013 4:54 am

Fred, as you probably guessed, New Holland's prices are coming down because of the passing of Eid al Adha back on Oct. 14 and 15. The typical pattern is a gradual building of prices in the two to three weeks preceding the holiday, a dip immediately before it (as the market usually gets flooded by everyone sending lambs as close to the date as possible) following by a couple of weeks of high prices due to short supply, and then a return to normal. Since a lot of this happened during the government shutdown, we didn't have the market reports to follow, but I think that would explain the gradual decline you're hearing about or seeing reported.

My impression is that midwestern markets are swayed less by the Islamic calendar and more by the price of corn. Cheap corn creates demand for feeders. Could that be what's going on?

I have been hearing that the packers are in the market looking for feeder lambs at fairly high prices, which would be an indicator that they are expecting continued upward movement in price. Some portion of production was lost due to the recent wreck. Could that have been enough to constrict supply to the point where prices are going to be forced up again?
Bill Fosher
Westmoreland, NH

Sugar Creek
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Re: Higher prices?

Postby Sugar Creek » Thu Nov 07, 2013 8:06 am

Cheaper corn has made a difference. For most of the year, light feeders could be purchased here for twenty to forty cents less than fat lambs. Tuesday, the feeders were going for twenty cents or more higher than the fed lambs. I also saw some being bought to go back to the farm, something that had not been happening.
Still, something else is going on. The lambs I sold all through July and August brought between $1.05 and $1.15. I took off my last load in early September and only got a bid of 80 cents, and brought them back home. I took them back three weeks later, the last of September, and they brought $1.31. I kept back a few ewe lambs and if they had been at the sale Tuesday, they would have brought easily over $1.50.
All these lambs were very uniform white face or brockle face unshorn lambs, fat and weighing 100 to 110 pounds.

I would be more prone to confidence in the future if we had seen a steady but slower increase in price. It is hard to know what to do with the price of feed and the price of lambs making 50% moves in short periods of time. Like others, I was burned by the collapse of prices between 2011 and 2012 while i was trying to expand my numbers. I hope to be more cautious about this apparent price increase. It appears to me to be due to cheap corn, a firmer US dollar, high priced feeder calves, heavy buying of NZ and Aus lambs by China and NZ entering into a rebuilding phase in lamb production. The weak US and global economy make it a high risk game, but what do I know?

Fred

Justin-PA

Re: Higher prices?

Postby Justin-PA » Thu Nov 07, 2013 8:38 am

An interesting comment from a packer that I recently started working with. He said the sheep industry has been getting away with selling lean lower quality/grade lambs to the ethnic market. But as this ethnic market has evolved, these folks are realizing that a well marbled lamb chop tastes a hell of a lot better than the lean, tough meat they are used to from their homelands/upbringing. There is a surge in demand from the ethnic trade of better and better quality. They are getting smarter about their purchases and won't be paying the premiums for low grade lambs like they were. I can tell you from first hand knowledge, a lot of low grade crap goes to New Holland. That, coupled with more western lambs coming in and higher volumes (especially around holidays) is all working towards making New Holland less of a standout.

Sugar Creek
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Re: Higher prices?

Postby Sugar Creek » Thu Nov 07, 2013 9:38 am

Thanks Justin,
Although just hearsay from a packer, what you say fits the idea knocking around in my mind that I was not able to get a handle on.
I certainly have noticed the ethnic buyers becoming more discriminating than they were when I first starting going to sheep sales. When they are present in numbers and setting the tone for the sale, it is almost always a good one.
When they are not well represented at the sale it is almost always bad news.

Sugar Creek
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Posts: 440
Joined: Thu Jul 13, 2006 4:07 am
Location: Central Kentucky

Re: Higher prices?

Postby Sugar Creek » Fri Nov 08, 2013 3:25 pm

Just looked at the Weekly Lamb Summary provided by the USDA and saw something that might be contributing to the recent strength shown in prices. Looks like there was a drastic decline in the live weight of lambs slaughtered that began in late August and continued through late October. Weights are now rising again so these prices may be short lived.
Again, I stand to be corrected for I am out of my secure knowledge Zone, but it is interesting to me. Without a decent price i can't produce lambs for long.
Fred

BIGIRON59
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Re: Higher prices?

Postby BIGIRON59 » Mon Nov 11, 2013 7:57 am

I think perhaps many things are contributing to price recovery. In the year through august.the percent of Yield grade 1 lambs harvested was at a 4 year high at 8 percent of total harvest. In July and august the YG 1 was 10.5 percent. These lambs have minimal if any back fat. and should have been kept on feed. For whatever reason,(pasture gone, high feed prices, financial reasons ect)they were sent to harvest. Years past these lambs would have been bought and sent to feedlots. That did not happen this year. Long term a good sign. Short term, have some poor quality lamb to get rid of.

The glut of "monster lambs" has probably been taken care of in feedlots. A good thing. They are probably hanging around in coolers or in boxes, but at least are dead. Another round of Government buys should help that.

Feed cost has dropped by at least 50 percent and would appear to stay in current range at least through 2014 and perhaps at least midsummer 2015.That is promising and has spurred feeder prices of late.(fat lamb prices have recovered as well and some of those lambs being currently harvested are returning in excess of 100.00 per head profit :) . A good thing for anyone who has been bled the last turn or 2.This will be extremely short lived and these deals will be worked through in next 60 days, unless fats continue to move higher on pricing. Common sense will prevail in this turn, and I would imagine that most feeders will get those lambs moved to harvest as soon as possible to capture this potential. ) LPR is not in play as policies have been so discounted that I can not imagine any have been sold.

If feed continues flat to lower, feeders continue to run higher and fats continue to run higher, I would expect so see "monsters'" to return to haunt us by spring. Although Packer pullback has been noted at weights over 155 or so. Most active prices and weight are the 125 to 145 market. That is the top weight that 2 buyers will buy here. And probably would like 140 at top if can get enough numbers. That helps keep that supply lower.

It has been noted the retailers have resisted higher prices, so would expect the market to stabilize here pretty soon. I expect the "big boys" have plenty in storage, and market here has been driven by 2 smaller packers here.Wolverine in particular has been very active. Strauss has been in market as well. These smaller packers have been part of much discussion of late. I believe they both have increased sales in last downturn, even as others lost sales.Perhaps more focused on consumer needs.

Where will it go?. I don't see many new people entering the arena yet. That may come as sustained profits return. Anyone who has manged to patch enough leaks in their ship to keep afloat, will reap some rewards the rest of this year and next. I hope that most do not forget , and continue to work on steering the industry in a "new direction". This last year should have been the torpedo that sunk the ship, but perhaps enough rivets held that the ship can limp into dry dock. The ship can not be repaired , just salvaged for scrap. However. a new model has been sent to drawing board. Lets hope that it can be completed and rolled out to intercept the fleet from down under before they get here.
Starving sheepherder on the windblown tundra of Northwest Iowa


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