MT. PLEASANT, Sanpete County — Todd Jorgensen is surrounded by hundreds of ewes and their lambs, talking over the plaintive bleating of the young animals, many of which are a day old or born just a few hours ago.
Spring is normally a time for optimism in the sheep industry. But because of coronavirus, dread has taken its place.
“It is devastating for us,” Jorgensen said, looking at this year’s crop of lambs on a recent spring morning. “It is just devastating.”
Markets for lamb and wool are decimated.
“Sheep is really dependent on foreign countries, the restaurant industry and cruise lines — and that’s shut down,” said Logan Wilde, commissioner of the Utah Department of Agriculture and Food. ‘This is really impacting what is happening on the ground with wool and sheep.”
At the Skyline Sheep Co. in Mt. Pleasant, the Jorgensen family is expecting a crop of 5,000 lambs this year. In October, they will be trucked to Denver to a feedlot and for processing.
They already have 4,300 lambs in Denver slated for processing, but Jorgensen sees the price per pound plunging — with the reality that lamb cuts will be stored in freezers — and costs mounting for storage they will have to pay.
“The processors really don’t want them,” he said.
Neil Jorgensen is the patriarch of the operation, which has been in the lamb business — when you combine both sides of the family — for eight generations.
“If the government doesn’t do anything, there won’t be any sheep industry left in the United States in five years,” Neil Jorgensen said, stressing the federal government needs to act on the amount of foreign imports to help U.S. producers survive by enacting a stiff tariff at a certain level.
The problem is the market is already challenging for U.S. sheep ranchers, with over 70% of the lamb consumed in the country coming from foreign countries where ranchers are heavily subsidized. As a result, Australia and New Zealand can undercut U.S. ranchers on the product’s price.
“It is the foreign stuff that has been killing us, but nobody saw this (the coronavirus) coming,” said Drew Jorgensen, Neil’s grandson.
Ranchers can buy insurance on their animals on staggered time schedules, but the market has taken such a dive it is no longer available to some operators. he explained.
“It will keep us from losing everything on them.”
Big business
According to the U.S. Department of Agriculture’s National Agricultural Statistics Service, there are about 1,898 sheep ranchers in Utah with 285,000 animals.
In 2019, Utah’s lamp crop was 230,000 — with most of those destined for East Coast or West Coast markets.
Drew Jorgensen said the lamb market, beyond being challenged by foreign imports, struggles because of U.S. consumption.
“In the United States right now, we eat less than 1 pound a person per year of lamb. If you could double that and eat 2 pounds a year, we probably couldn’t keep up.”
Earlier this year, the Jorgensens were optimistic because the market for lamb was ticking up and March and April are hot for lamb consumption due to Easter.
Todd Jorgensen said it looked like they’d get $1.65 a pound. Now processors are telling them they will be lucky to get $1 a pound — and they need $1.45 to break even.
The Jorgensens figure they will lose $80 a head and could see a financial hit of a half million dollars.
At the same time, operational costs keep going up. Ranchers are paying migrant workers — if they can find them because of the pandemic — more than double what they did just a few years ago because of federal regulations. It’s also been tough finding their food supplies, which include rice, beans and canned meat in strong demand because of hoarding.
‘Our costs of operating have gone up, but the price of meat doesn’t keep up,” Drew Jorgensen said.
Sitting wool
In another hit to the industry, ranchers used to get a financial credit for the pelts, or hides of the animals that were processed. Those were then sold for clothing apparel such as boots or jackets and other uses.
In this market, however, ranchers are having to pay to have the pelts just dumped in the trash — wasting a natural resource.
The Jorgensens also sell wool, which essentially now has nowhere to go.
“Everybody is storing wool because it is not worth anything,” Drew Jorgensen said.
He said last year’s yearling wool is sitting in storage in California.
The only lab that tests the quality of the wool, which determines what it is used for, is in New Zealand. That country has had more than 1,300 cases of coronavirus and is in lockdown.
In 2019, according to the federal government’s agricultural statistics agency, the value of Utah’s wool production was nearly $5 million.
Will Griggs, manager of the Utah Wool Marketing Association, is already sitting on 650,000 pounds of wool from 2019 and 250,000 pounds from 2018 from a Chinese customer who did not get the product out.
The wool is stored in a Tooele County warehouse awaiting testing in New Zealand. After it is tested for its quality in New Zealand, it then goes to China to be cleaned. Exports are shut down due to the pandemic.
“We have a limited amount of space and this is the largest amount of carryover I have ever seen and I have been here 25 years,” Griggs said. “I have never had this amount. We have always been able to sell wool at a certain price and now we can’t even get offers on it. Even the high-quality wool is not pricing.”
‘Long, dry spell?’
The sheep industry was hopeful for a good year. What was bad for Australia — with its drought and fires that are estimated to have killed a million sheep — would increase domestic demand.
But in addition to the trade war between China and the United States, the coronavirus pandemic toppled the market, Griggs said.
“We were expecting to have a good year and it never happened.”
Griggs said he has domestic buyers who travel from Texas, but those trips are postponed.
“They don’t want to travel and I don’t blame them.”
The wool association, which operates as a co-op, had a sale scheduled for April 23, but that has been put off.
Griggs said it is not possible to even determine the quality of the wool because testing is shut down.
“Even if we had buyers, we could sell it but it would not be competitive because we don’t know the details on the quality.”
There will always be some demand, however.
Since the 1940s, the U.S. government has required every military member’s dress uniform to be made of domestic wool, Griggs said, and with the military recruiting, that’s a good thing.
There are other uses of wool that may not immediately come to mind, such as the stuffing for gymnastic tumbling mats, billiard tables, Major League Baseball hats and the baseballs themselves that have yarn in them.
“A lot of that stuff is not happening now. It could be a long, dry spell,” Griggs said.
There is hope that the New Zealand testing lab will open later this month, and he said everyone in the industry is keeping an eye on it.
He’s still shipping “core” samples of the wool to New Zealand, hoping Western producers in the United States will have an early place in line once the lab is up and running.
Griggs, who grew up on a farm, tries not to watch the news and pushes to stay optimistic, but he is uncertain about what lies ahead.
“I have a crystal ball, but my crystal ball is cracked. Outside of the panic and craziness that is happening, and maybe because I am old school and 50 years old, I can’t help but think this will pass.”
Back in Mt. Pleasant at the Skyline Sheep Co., the Jorgensens are continuing their daily operations, raising their children, playing with lambs, managing their care and taking care of the workers they can find.
“We are still here and working,” said Drew Jorgensen.
Will they survive?
“We hope so,” he said, “but this couldn’t have picked a worse time to hit. We don’t have a backup plan. This is what we do.”