Sector at a Glance
Sheep are raised for both meat (lamb or mutton) and wool. The U.S. sheep and wool industries have seen significant change in recent decades marked by smaller inventories, declining production, shrinking revenues, and fewer operations. Historically, lamb and mutton were viewed as byproducts of wool production, even though wool receipts accounted for a smaller share of revenue. As wool revenues have declined, producers have turned their attention to lamb and mutton production and the possibility of other byproducts such as sheep leather.
Inventory data on U.S. sheep began in 1867, when there were approximately 45 million sheep in the United States. Sheep numbers peaked in 1884 at 51 million head. Since then, numbers have declined to nearly 5.0 million head in 2016. According to the Farms, Land in Farms, and Livestock Operations report published by the National Agricultural Statistical Service (NASS), the number of sheep operations has declined as well. Since 1990, sheep operations have dropped notably—from more than 105,000 to less than 80,000 as of 2012, when livestock operations were last included in the report—as producers experienced shrinking revenues and low rates of return. Conversely, however, data from the Census of Agriculture indicate that the number of operations have increased from more than 83,000 in 2007 to upward of 101,000 in 2017. The 2011 report, Overview of the United States Sheep and Goat Industry, also published by NASS, indicated a change in methodology that allowed for more of the smallest farms to be captured. This suggests that the increase in operations is being driven by small-scale operations.
Sheep-producing operations range in size from those with small flocks to large western operations. Two types of enterprises exist: stock-sheep production and lamb feeding. Stock-sheep producers manage grazing flocks on pasture and range forage, often on arid western lands with few alternative uses. Stock-sheep producers sell lambs that are either slaughtered or placed in feedlots. Feeder lambs are raised on forage until they are around 60-80 pounds, and then placed in feedlots to be fattened and finished for slaughter.
Although the sheep industry accounts for less than 1 percent of U.S. livestock industry receipts, sheep operations are important to the economies of several States. More than two-thirds of U.S. operations are located in the Southern Plains, Mountain, and Pacific regions, and the regional distribution has remained fairly constant since the early 1900s. Texas is the largest sheep producing State, followed by California.
Attempts to diversify sheep production have sparked increased interest in hair sheep production. Hair sheep have high parasite resistance and low heat stress and are known to provide multiple lambing possibilities. Apart from the ability of hair sheep to produce lamb and mutton, their leather is a viable source of revenue.
The U.S. market for lamb and mutton meat has weakened throughout the decades. Since the 1960s, per capita consumption has dropped from nearly 5 pounds to just about 1 pound. This drop is due in part to declining acceptance of lamb from a growing segment of the population, as well as competition from other meats, such as poultry, pork, and beef. Most meat from sheep is sold as lamb and comes from animals under 14 months old. Mutton comes from older animals, and though often less expensive it is t less desirable to consumers. U.S. lamb consumers prefer high-quality cuts such as legs and loins. Some of the lower quality, less desirable cuts go to the pet-food industry or are exported.
The Northeast, with its high concentrations of Middle Eastern, Caribbean, and African consumers, is a major market for lamb products. The typical lamb consumer is an older, relatively well-established ethnic individual who lives in a metropolitan area such as New York, Boston, or Philadelphia in the Northeast or in San Francisco or Los Angeles on the West Coast, and who prefers to eat only certain lamb cuts. In contrast, beef, pork, and poultry buyers tend to be geographically dispersed, younger, and less ethnically oriented and tend to buy a wider variety of cuts.
With per capita lamb and mutton consumption fairly stable, imports have offset the decline in domestic production. Lamb and mutton imports, which currently account for more than half of U.S. supply, are mainly from Australia (about 75 percent) and New Zealand (about 24 percent).
In addition to importing meat products, the United States also trades live animals with its North American trading partners. Historically, live imports have come primarily from Canada, but these have declined considerably since 2003. Live exports go primarily to Mexico. The United States has a greater demand for lamb than for mutton, while Mexico has a greater demand for mutton and thus imports U.S. culled ewes (older, less productive females).