High lamb prices not a bubble market, producers say

The Easter lamb rush is over and the price has dropped back from a record $272 per hundred pound average to $256 the third week of April. But the price is still running $18 higher per hundred pounds than last year.

Murray Hunt, general manager of the Ontario Sheep Marketing Agency (OSMA), attributes the higher prices to higher demand for lamb. Moreover, sheep producers anticipating higher future demand are holding back lamb ewes for breeding stock.

He is reluctant to predict where the market will be in a year’s time. "This is not an exact science," he says. However, while Ontario has about 30 per cent of the sheep population in Canada, "it grows only 41 per cent of the provincial consumption."

"There’s a big vacuum called Toronto," he says. "That’s where the demand for lamb is high, among the ethnic population."

The sheep industry, unlike hogs and beef cattle, has been built on a domestic market rather than exports, he says. Consequently, it is not as dependent on currency fluctuations or hampered by trade restrictions.

He says Ontario, unlike its chief competitor, New Zealand, finishes its lambs on grain rather than on grass, and as a result Ontario lamb has more taste because of the increased marbling.

In Ontario, there is a trend toward larger flocks of 400 to 500 ewes but profit margins have yet to be worked out. OSMA is currently running a "bench marking study" where it is developing cost of production formulas on a sample of 37 flocks with over 300 ewes.

While the numbers of the "bench marking study" are not in yet, he estimates a single ewe can produce $50 to $100 annually. "People doing an excellent job can make an excellent living," he says.

Stressing the word business, he said the opportunities are there, the land is there. Raising sheep can be a good full-time business or provide a good second income.