WASHINGTON – Choice slaughter lamb prices at San Angelo are expected to remain strong due to the continued tight supplies, according to the June 15 Livestock, Dairy and Poultry Outlook from the US Department of Agriculture’s Economic Research Service. Prices, however, are expected to ease slightly from record first-quarter levels.

Since the religious holidays have ended, lamb demand has diminished somewhat. Second-quarter prices are expected to drop around $18 from first-quarter highs and are expected to average $146-$147 per cwt. Second-quarter 2011 US lamb and mutton production is showing signs of rebounding from first-quarter 2011 lows. Production for April was 14.3 million lbs., almost 11 percent above the previous year levels.

Second-quarter 2011 lamb and mutton production is forecast at 40 million lbs., equaling the same period in 2010. But as attempts at herd rebuilding continue, production is expected to be below 2010 levels for the rest of 2011. Dry weather conditions in the Southwestern US could influence both retention and production patterns for the rest of the year.

According to the National Climatic Data Center, Texas and some parts of the Southwest have seen above-average temperatures and below-average rainfall for several months this year, partially caused by a strong La Niña in the tropical Pacific Ocean. Unusually dry conditions have triggered an earlier than normal start to the fire season in parts of Texas and the Southwest. Drought conditions in these areas may have an impact on producers’ decisions to retain and/or maintain sheep herds.

The San Angelo, Texas, sheep auction reports a larger than normal volume of lighter weight lambs in recent weeks, which may be an indication that drought/fire-affected producers are engaging in premature sales. This could be reflected in lower production levels, due largely to lower weights.

Summer months typically are culling season for sheep producers, and drier than normal conditions could result in less retention and higher than normal cull rates.

First-quarter 2011 US live sheep exports were down 25 percent over the same period in 2010. Strikingly, live sheep exports to Mexico declined 66 percent over the period. Although Canada has also seen a decline in year-over-year first-quarter live sheep imports from the US, the country has seen an increasing trend in live sheep from the US since 2005. The increased US live sheep exports to Canada may be due in part to strength of the Canadian currency relative to the US dollar, as well as to the overall increasing trend in Canadian lamb and mutton demand.

However, the recent disparity between US live sheep exports to Canada and Mexico remains a topic of interest. In April 2011, Canada received 6,784 head of sheep from the US, while Mexico received only 1,643 head.