In December 2013, USDA's Grain Inspection, Packers and Stockyards Administration's Packers and Stockyards Program (GIPSA) published their findings regarding the market volatility between 2010 and 2012. Their investigation concluded that "a combination of many market factors caused the increase and subsequent decrease in lamb prices in 2010, 2011 and 2012. The cost of imported lamb was likely the most important factor. GIPSA did not find evidence of price manipulation."

The investigation of the lamb market was initiated in 2012 at the request of Senators, one Representative and the American Sheep Industry Association. The letters claimed that the price volatility between 2010 and 2012 was a result of market manipulation by the packers and feeders. Superior Farms, along with other packers and feeders, cooperated fully with GIPSA's extensive and costly investigation.

P&SP reported that:

  • The dramatic price decline in 2011 was a result of consumers curtailing the amount of lamb they purchased due to the high price levels of lamb around Easter of 2011.
  • Small purchase orders due to reduced demand in 2011 backed up the packing plants' inventories and caused feeders to hold lambs on feed longer than optimal, causing the lambs to get larger, fatter, and older. This resulted in additional costs to packers, feeders and producers.
  • The packers delayed processing of their own lambs on feed as long as or longer than they delayed processing other feeders' lambs.
  • No evidence was found that alternative marketing arrangements offered to producers caused the large swing in prices. In addition, the proportion of the lambs purchased under these arrangements remained relatively constant.
  • No evidence was found that the lamb insurance program was used by the packers to manipulate prices.
  • There was no indication that prices were manipulated by packers by using published USDA mandatory reporting production information.

Jeff Evanson, Chief Financial Officer for Superior Farms said, "We are pleased with the report because it proves what we have always known: that the consumer dictates the profitability of our industry. We at Superior Farms are dedicated to providing the consumer the best American lamb for a great eating experience at a fair price. We are fortunate to have producer partners who understand that we, together, need to look for ways to reduce costs (not increase costs through government intervention), improve quality, and bring a better value to our consumers of American lamb."

Superior Farms, with headquarters in Davis, California, is North America's largest processor and marketer of lamb. The company is the recognized leader in the retail and foodservice markets it serves, providing products and services to customers throughout the United States, Canada, and more than 10 countries. The company has approximately 400 employee-owners at its nationwide network of facilities and offices. Follow on Twitter: @eatlamb

Superior Farms
Angela Gentry, 530-297-3544 or 916-524-6636 (cell)
angela.gentry@superiorfarms.com