Sheep farmers: have you seen problems with lamb prices recently?
The USDA’s Grain Inspection Packers & Stockyards Administration (GIPSA) has opened an investigation of the U.S. sheep market in response to a recent dramatic price decreases. The investigation aims to reveal whether there is market manipulation by processors that is affecting prices.
At the heart of the issue is the fact that the processing sector for lamb is highly concentrated – in the West, for example, only two companies dominate the industry. The industry is regulated by the Packers and Stockyards Act, which prohibits prohibits price manipulation and other unfair and deceptive practices.
The GIPSA investigation came about through the petitioning of a bipartisan group of US Senators (Senators John Thune, Max Baucus, Tim Johnson, Jon Tester, John Hoeven, Kent Conrad, Mike Enzi and John Barrasso), along with Rep. Noem (SD).
According to Bill Bullard of the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA), sheep producers need to immediately call GIPSA to inform them about any conduct or actions by lamb buyers and meatpackers that have contributed to the sharp price decline. Without direct information from affected sheep producers, GIPSA will not know where to direct its investigation.
Here are a few examples of the type of information GIPSA will need to conduct an investigation:
- Did your lamb buyer tell you the packers don’t need your lambs?
- Did your lamb buyer tell you the packers are killing their own lambs and so you will have to wait to sell yours?
- Did your lamb buyer tell you the packers are cutting back production in order to drive up lamb and mutton prices?
- Did lamb buyers/packers refuse to bid on your lambs?
- Did you have difficulty in entering a forward contract to sell your lambs?
- Did you have difficulty selling your lambs?
- Did anyone in the sheep industry tell you the packers have the power to keep lamb prices low and they intend to use their power to do just that?
- Did your lamb buyer impose any new restrictions on your ability to sell your lambs?
These are just a few examples, but any information you may have that you believe has contributed to the decline in lamb prices would be extremely helpful.
Who to Call: If you are a sheep producer and have any information that you believe would be helpful to the investigation, please call or write:
Business Practices Unit Supervisor
Denver Regional Office
3950 N. Lewiston, Suite 200
Aurora, CO 80011-1556