The Sheep Industry

Due to the steady decline in demand for lamb and wool in the United States, the industry has a very small size compared to the other livestock industries. This small size makes the marketing and processing of animals difficult as there is a lack of competition and availability among producers and processing plants. Further compounding this decrease is a lack of production chain incentives, such as value added or superior quality incentives, which causes everything to be valued at the same price regardless of its actual worth. This provides no driving factor to get into the industry or to provide high quality products in a large quantities. Due to the small size, the industry also has very little political clout making it difficult for the industry to stand up for its practices or against limiting regulations. Fortunately the sheep industry can work together with other producers, such as the beef and pork industries, to maintain politics.

The sheep industry faces challenges affecting environmental and animal care and welfare concerns, as all other livestock industries, but has more regional diversity than pork and poultry production. The western flocks are often kept on public lands, such as National Parks, and with that face many challenges that eastern producers do not. With public land use environmental concerns are more focused as the land is shared with residents of the United States for recreational use. In these areas predator control is also evaluated more critically as National Parks are often used as release sites for wolves and other carnivores that enjoy preying on sheep, and because the use of guardian protection dogs in recreational areas can cause many problems with park visitors and their pets.

Predator control is a problem for all producers, regardless of regional diversities. Predators cause a substantial amount of loss to producers,  but methods of predator control are often highly criticized, as they usually result in the death of the predator and in some cases, such as with the Gray Wolf, this might conflict with the Endangered Species Act. As an attempt to help producers recover production losses due to predation, the USDA Wildlife Services provides federal and state funding as compensation. To raise money for predator control funding, Virginia has instituted a check off program, where every lamb sold is taxed 50¢. Although this does provide funding to assist with predator control,  some producers are against the discount creating some internal discourse in the industry.

Another controversy faced by all regions of the industry is that imports of lamb could overtake the domestic supply. Even though on average Americans only consume a pound of lamb per year, current domestic production levels cannot meet this demand. Imports from New Zealand and Australia are often brought in, but since these lambs are produced much more efficiently than domestically produced lambs, they usually result in less cost to the consumer making the imports a more attractive source of lamb. In an attempt to balance the costs the import of lamb gets tariffs, or taxed to be brought into the country, but this affects the United States abilities on the global market. Mandatory price reporting has also been initiated to attempt to keep free market values of lamb, by requiring all product prices be reported thus maintaining industry transparency.

A recent attempt to make all livestock industries more transparent, is not as beneficial however. The USDA Grain Inspection, Packers, and Stockyard Administration, also referred to as GIPSA, requires that all marketing contracts are  made public, alters the definitions of collusion, price fixing, and undue preference in the market and bans packer to packer sale of livestock. Instead of benefiting the livestock production industries GIPSA results in lost opportunities and profits because quality and value added products might fall under undue preference putting the producers at risk to lawsuits. There is also concern that GIPSA violates producers privacy by requiring all contracts be made available to the public and as such GIPSA supports industry consolidation rather than small producers.