Extreme caution urged in potential UK/US trade by sheep and lamb group | TheFencePost.com

Extreme caution urged in potential UK/US trade by sheep and lamb group

Trade has to be fair, not just free and to that end, Chase Adams at the American Sheep Industry Association said the organization is urging extreme caution to legislators considering a trade deal between the U.S. and the UK.

Adams said he recognizes the tremendous amount of potential for agriculture in the UK Free Trade Agreement for other industries like beef and pork. The concern for sheep and woolgrowers, however, he said, is the UK is a major producer of lamb and mutton.

“Our word of caution to the negotiators and Congress for their oversight role as this moves forward are to ensure that they don’t create a situation where UK products coming into the U.S. are at an advantage over U.S. producers,” he said.

The payments in the UK, similar to what would be known as conservation-based payment in the U.S., account for an estimated 20 to 33 percent of producers’ net income, compared to nearly zero in the U.S. Adams said U.S. lamb and wool producers have access to disaster relief programs and conservation programs based on cost share but no programs that provide steady revenue, year in and year out.

In terms of quality, the U.S. is the only country that feeds lambs, Adams said, with the bulk of lambs on feed in Weld County. The product, and Colorado lamb specifically, he said, are recognized as a high-quality product that shines in a white tablecloth setting.

The U.S. has been barred from exporting lamb to the UK and European Union for a number of years and Adams said negotiators are being urged to keep in mind that even with reciprocal trade, the UK isn’t a large market for U.S. lamb given their long history of providing local lamb from UK suppliers with long-term relationships, including with Australia and New Zealand.

Paired with the UK being a less than lucrative market for U.S. lamb, the concern remains that the heavy subsidies for UK producers would put them at an inherent advantage over U.S. producers. Quantity of exports is also top of mind. Adams said the UK exports about 38 percent of their lamb and mutton, adding up to about 90,000 to 100,000 metric tons. Total U.S. production in 2019 stood at about 67,000 metric tons.

“The portion of lamb they export far eclipses our annual production so our concern is right now a tremendous amount of the UK’s exports go to the European Union, France is their largest specific country destination, and depending on how Brexit goes and the agreement they’re able to reach but in the event of a no deal for Brexit, they’ll be looking at fairly significant tariffs on sheep, lamb and mutton anywhere from 28 to 76 percent tariffs, and if that’s the case, that leaves the entirety of their export potential looking for a new home,” he said.

Adams said the U.S. market is a lucrative, high-end market for lamb and mutton and other export destinations around the world for lamb and mutton lack the luster of the U.S. market. What lamb is exported by the U.S. mostly remains in U.S.-Mexico-Canada Agreement countries, and with an additional 34 metric tons to date exported to Japan, a newly re-opened market that closed in 2003 amid Bovine Spongiform Encephalop concerns.

Lamb, which is so dependent upon food service and home-prepared meals during Easter and Passover, has suffered across the board during the COVID-19 pandemic and the ensuing restaurant closures. With 50 percent of lamb consumed in restaurants — and not the types able to offer fast food or drive thru options — and the onset of the pandemic closures just before Easter, feeders were at capacity preparing for the holidays so vital to lamb consumption.

Adams said the ASIA was pleased that the USDA included lamb and wool in the recently opened CFAP program. Designed to cover 2019 and early 2020 losses, Adams said anxiety remains among producers regarding the next quarter.

The task of the USDA to ease the losses to producers across agriculture, he said, was a Herculean task. Uncertainty continues to reign, making market volatility the norm and Adams said producers must continue to communicate with their elected representatives.

Superior, the largest lamb packing facility with plants in Denver and California, remains at reduced capacity; Mountain States Rosen, the cooperative in Greeley, Colo., is going through Chapter 11 bankruptcy as a result of the loss of food service income; other large packing facilities are either open at reduced capacity or remain closed, causing a back-up of lambs on feed.

“We had a lot of lambs on feed as Easter and Passover, our peak season, approached,” he said. “This was a perfect storm for the lamb industry and hit right when we had those feeding facilities at capacity in preparation for and in anticipation of what looked like it would be a very good year for lamb producers. We were absolutely sidetracked.”

CFAP won’t make these producers whole, he said, but it will provide some relief. ❖

— Gabel is an assistant editor and reporter for The Fence Post. She can be reached at rgabel@thefencepost.com or (970) 768-0024.

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