Full text of Economic Review (Federal Reserve Bank of San Francisco) : The Sheep Industry of the Twelfth Federal Reserve District : Supplement to Monthly Review

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THE SHEEP INDUSTRY
of the

TW E I F TH f E D E R A l

R E SE R V 'l ip I ST R I C T

Supplement to

MONTHLY REVIEW




SEPTEMBER, 1950

FEDERAL RESERVE BANK
OF
SAN FRANCISCO

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P art

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C O N T E N T S

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I. SHEEP R A ISIN G 1
Patterns of District operations
Dependence on the public domain
Stock sheep numbers
District cash income from sheep production

P art

II. MARKETING THE DISTRICT LAMB CROP
Seasonal lamb movement
Production and consumption
Lamb prices

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III. W O O L
Major producing areas
Marketing
Interwar and war periods
Postwar period

1This section previously appeared in the MONTHLY REVIEW, May, 1950.




Prepared by Justinian Caire, Agricultural Economist,
under the direction and review of officers
of the Research Department.

I. SHEEP RAISING
popularity. Of the medium wool groups, Hampshire
Southdown Suffolk breeds became popular; of the long
wool groups, Cotswold, Lincoln, and Leicester. Cross
breeds were developed— Corriedale, Panama, Columbia,
and a number of others— in an effort to produce a profit­
able meat carcass while sacrificing as little as possible the
desirable wool characteristics of the Merino strains. In
most range areas, a percentage of Merino blood has been
retained to preserve the strong flocking instinct required
in sheep management under range conditions.

raising has been an important agricultural pur­
suit for many centuries, and early became an impor­
tant segment of agriculture on the Spanish peninsula. It
was here that the fine-wool Merino breed was evolved.
This breed was eventually to serve as the foundation stock
for the extensive flocks that populated the New World
after 1800. The sheep industry became so important to
Spain that she jealously guarded her breeding stock from
exportation and established liberal laws in favor of flock
owners. Towards the end of the eighteenth century, how­
ever, the Spanish control of its fine-wooled Merinos was
gradually weakened. Some breeding stock found its way
to France. Numerous other lots were smuggled out to
the Americas. These exportations resulted in the develop­
ment of the improved Merino strains. Because of its graz­
ing habits, its strong instinct to flock, and the high quality
of its wool, the breed proved particularly profitable to
exploitation of the natural grass resources of the new
frontiers— western United States, southern Argentina,
Australia, and New Zealand.
heep

S

Character of District production
Sheep are raised in all Twelfth District states. Within
this area, the structure of the industry is essentially one
of range operations. The regulation of the free range
through the formation of the Forest Service of the De­
partment of Agriculture in 1905 and the establishment
of the Grazing Service of the Department of the Interior
in 1934 required basic adjustments in early production
methods. The creation of these regulatory Government
bureaus resulted in the pattern of operation becoming
more stable through the institution of range control. They
brought an end to the days of the free open range, and
eliminated the competition for favorable grass which had
resulted in overstocking and depletion of the forage. Their
establishment wrote the final chapter to the wars between
sheep and cattle interests. They also brought to an end,
however, the possibility of starting “a sheep spread” with
only a small band of ewes, a camp outfit, and a willingness
to be alone.

Beginning nearly a century ago, sheep have played an
important part in the agricultural development of the
western states. The northwest boundary treaty with
Great Britain in 1846 and the treaty with Mexico in 1848
established American ownership of a vast expanse of land
west of the Rocky Mountains. The natural grass re­
sources which were opened to American occupation with
the acquisition of this territory gave impetus to a rapid
expansion in the grazing of livestock.
From the original Spanish flocks introduced via Mex­
ico through the mission program and the “ rancheros”
who followed, the industry had its beginning in California
and Arizona. In Utah and surrounding areas it was estab­
lished with the early Mormon colonies. In the Pacific
Northwest, sheep arrived overland following the Oregon
pioneers in the 1850*5 and ’óO’s. During the following two
decades, sheep were established on the intermountain
ranges of Nevada and Idaho in the wake of the trail flocks.

Other factors have also influenced District sheep pro­
duction during the last 40 years. When flocks could
be trailed long distances to slaughter centers, they
were marketed as mature sheep. Good slaughter condi­
tion was a secondary consideration to wool production.
The offspring not sold one season yielded another wool
clip and could be sold the next. Young ewes were held
for flock expansion or disposed of to other breeders.
Grass was cheap, and capital investment therefore was
essentially limited to livestock. As the west became settled
and the public domain reduced, an increasing investment
in real estate was required, often exceeding the value of
the breeding flock. It was no longer practical to retain
each year’s increase. Sheep-men were able to adjust
successfully to these changing circumstances, however,
because of the extension of rail transportation and the
demand for meat by an expanding population.

In the beginning, the profitableness of western sheep
production was based essentially on the sale of wool.
Wool, as a storable commodity, could be held from sea­
son to season for speculation and could be shipped long
distances via the slow methods of transportation exist­
ing at the time. The Merino was well adapted to the
production of fine wool under range conditions. These
sheep were efficient grazers on the far flung ranges; they
flocked well on the unfenced bedding ground at night;
and their wool grew rapidly from one shearing to the
next. They also travelled well to and from seasonal pas­
ture areas.

Meat production is now the more important factor.
Consequently, successful lamb raising and marketing
under present day conditions necessitate close supervision
by competent and technically trained management. The
expanding District population is increasing competition
for the use of the remaining public domain by other than
livestock interests. The use of farm flocks as a means of
agricultural diversification is increasing in some District
areas. Nevertheless, the sheep industry in the Twelfth
District is still essentially pastoral in character.

As population continued to expand in the United States
after 1900, the demand for meat steadily increased. The
production of lamb became a more and more important
aspect of the industry, and the sale of lamb and mutton
came to contribute the greater share of the income from
sheep raising. The British or mutton breeds gained in




1

Patterns of Operation

pasture area of sparse range, the greater portion of which
is within the confines of Federal lands. Sheep arrived in
the area with the early Mormon colonists and proved
adaptable to the forage of the region. The early flocks
of Spanish and French Merino blood established a hardy
foundation stock in the dry climate of the high plateaus.
The English breeds later found considerable favor as
central markets developed for mutton carcasses.

The pattern of operation in Twelfth District sheep
raising is related to the natural forage characteristic of
the western range. Range operations in the intermountain
area may be distinguished from those in California and
in Arizona. To a lesser but increasing degree, sheep are
raised in farm flocks, notably west of the Cascade range
in Washington and Oregon, in the northeast corner of
California, and in scattered localities in Utah.

The national forests cross the center of the state of
Utah in a northeast-southwesterly direction. Within their
altitudes exist a number of valleys where production of
feed, in conjunction with other crops, allies crop farming
and livestock production. The national forests also con­
tain extensive areas suitable for summer grazing. On the
desert areas, east and west of the national forests, extend
the lands of the Grazing Service. The importance of range
sheep production in the state rests upon the complemen­
tary nature of these two areas of natural feed. In contrast
with farm flock enterprises, which usually have no allot­
ment on the public range and consequently are required
to maintain their sheep on home-grown feeds through the
winter, range operators winter their bands on Federal
leases. Storm hazards exist, and severe winters peri­
odically cause high death losses. One of the most severe
in the history of western range management was experi­
enced in 1948-49.

Intermountain area
Between the Cascade and Sierra Nevada Mountains
in the west and the Rocky Mountain chain to the east
lies the vast intermountain area. This region offers a
variety of grazing for District flocks, being a sagebrush
— short grass— shrub plateau of relatively high altitude
extending from eastern Washington and Oregon, across
southern Idaho, and over Nevada and Utah to the north­
ern highlands of Arizona. This is principally an area of
range flock operation*where a large surplus of market
lambs is produced in conjunction with a valuable wool
clip. These are ranges of the primary producer. The gen­
eral pattern of operation which identifies the industry in
this intermountain region is one of movement of flocks
from winter quarters to Federal or state lands (or some­
times to private leases) in the spring of the year, thence
on to the summer pasture in the national forests, again
a transfer to lower ranges in the fall, and back to home
quarters or desert ranges in the winter.

There is much overlapping of grazing ranges in the
intermountain states. The desert reaches of southern
Nevada serve as the winter range for flocks from the
forest reserves of the state or for sheep entering from
western Utah. The Arizona strip north of the Grand
Canyon receives Utah flocks for the winter. Some Idaho
sheep summer in the Nevada forests. From western
Nevada irrigated areas, where hay is raised for winter
feeding, sheep cross into California forests of the Sierra
Nevadas for summer pasture. Also, out of eastern Wash­
ington flocks are shipped to Idaho and Montana summer
ranges.

Idaho: The Snake River Valley of southern Idaho
from Payette on the western border as far east as Idaho
Falls serves as the winter ground for many flocks. Hay
and feeds are raised in the valley bottom. This is the
principal shed-lambing area of the District where the
ewes, which have been bred to lamb in January and
February, are winter fed and lambing is done under sheds.
With the arrival of spring, movement starts over the
Federal grazing lands toward the nearby national forests
where operators have their respective summer grazing
permits— north and east within the state or south to the
Humboldt National Forest in Nevada. Lambs are sold
off the summer pastures, three-quarters of which are
marketed as fat, averaging from 85 to 90 pounds. Those
which fail to fatten are pastured on the valley beet or
stubble fields in the fall or finished in the feed lots. Many
of the flocks are cross-bred ewes which are mated to
black-face mutton breeds.

Eastern Oregon and Washington: East of the Cas­
cades considerable numbers of sheep are raised, though
they have been much reduced since prewar years. The
Okanogan highlands of Washington produce some of the
best pasture of the state and serve as summer grazing for
the cross-bred ewes from the southern lambing area. Good
quality fat lambs are marketed off grass in late summer,
principally during September. In south central Washing­
ton, the Columbia Basin, with its adequate feed resources
of alfalfa and wheat, serves as winter quarters for flocks
which summer on the highlands, or on the mountain
ranges to the east.

The southwestern desert plateau of Idaho, most of
which is public domain, provides winter grazing for some
sheep from western Utah, eastern Oregon, and northern
Nevada. Usually an area of moderate winters, supple­
mental feeding of concentrated feed is necessary to aug­
ment the desert forage. Lambing is necessarily later than
in the shed area.

South of the Columbia River in the wheat and semiarid areas, three-fourths of Oregon's sheep were grazed
prior to 1940. During recent years, however, the industry
has been shifting to the Pacific side of the Cascades, so
that presently the larger share is run west of the moun­
tains. The use of lambing sheds, and the alfalfa, grains,
and wild hay produced in the Blue Mountain area, make
possible the production of early fat lambs in the north­

Utah-Nevada: The pattern of land settlement in Utah
introduced the raising of sheep in conjunction with other
operations of farm village communities. Farm flocks are
still prevalent in the state, but Utah is fundamentally a




2

California

eastern district. On the high semi-desert ranges to the
south, later lambing takes place in the open, usually in
April and May. Flocks graze over the public ranges and
move on to allotments in the national forests. Lambs are
marketed off the high ranges in September averaging
between 80 and 85 pounds.

The irrigated valleys and extensive ranges and forests
of California carry more sheep than any other state in the
District. Feed-lots in the state also produce the largest
number of fat slaughter lambs.
The leading sheep producing district in California is
the Sacramento-San Joaquin or Central Valley area. The
greater portion of the state’s early lamb output originates
in this region. Ewes are bred to lamb between November
and February depending upon the weather characteristics
of each locality. The earliest production originates on the
upper reaches of the San Joaquin Valley. The Central
Valley and its foothills are a grass area of high carrying
capacity from the first fall rains until late spring. Sheep
graze throughout the winter and lamb in the open in the
foothill areas or on the native pastures of the Sacramento
Basin or uplands of the San Joaquin Valley floor. In May,
sheep-men in the Sacramento Valley transfer their flocks
to the national forests of the Sierra Nevada Mountains
for summer grazing. Many sheep in the Central Valley
area spend the summer and fall in the valley on irrigated
pastures, stubble fields, and crop-land refuse after the
completion of harvests. Operations in the foothills of the
San Joaquin are similar to those in the Sacramento Val­
ley. Sheep are also wintered and lambed in the alfalfa
fields and native pastures of the valley floor. Some flocks
move out in the spring to the westside plains, and to
sugar beet fields in summer and fall. Other flocks are
transferred in the spring to range on the Mojave desert,
in years of favorable feed conditions, and from there to
the summer forest ranges. Range in the valleys is privately-owned or leased. Flocks can be closely surveyed,
making for a high lambing percentage. Lamb crops aver­
aging 140 percent are not uncommon. This high per­
centage, plus good quality stock and the fast weight gains
made on the excellent natural grasses of the region, is con­
ducive to the production of early maturing milk-fat lambs
which command a premium price at a season of scarcity.
The northern mountains of the state are also an area
of important sheep production. Mendocino and Hum­
boldt are the leading counties in this area. Methods of
operation differ considerably from other areas of the
state. Except for some summer grazing in the national
forests, ranges are mostly large, privately-owned and
fenced into pastures within which the sheep are allowed
to roam at will. There is some farm flock operation in this
district. Grass in the area is not so nutritious as that of
the valley sections so that lambs do not attain the fine
finish of the valley product, and many go out as feeders.
Ewes lamb on the range, usually in February and March,
and the lambs are marketed in early fall.
Shasta, Lassen, Modoc, Mono, and Inyo are sheep
producing counties of considerable importance in which
most flocks are grazed on the national forests in summer
and wintered at the home ranches on hay.

Oregon farm flock production
On the Pacific side of the Cascade Range in Oregon,
starting from Curry, Coos, and Douglas counties along
the Rogue River, through Lane, Benton, Linn, Polk,
Yamhill, and Marion counties along the Willamette Val­
ley, about 60 percent of the state’s sheep are raised. This
is the farm flock area. Relative to the rest of Oregon, the
percentage of sheep in this section is steadily increasing.
In 1940 over 76 percent of the sheep were run under
range conditions east of the mountains. Presently, Doug­
las County in the southwest has the largest sheep popula­
tion of any county in the state.
Farm flocks in the District are small flocks, often man­
aged in conjunction with other agricultural pursuits such
as dairying, hay, and crops. Small numbers are grazed,
usually not more than a few hundred, within the confines
of pastures and cut-over timber lands which are under
fence or where migration is limited by topographical con­
ditions. In this Oregon coast area there is some grazing
on national forest lands by larger flocks under range
conditions, but these are in the minority. As a result of
smaller flocks, less uniformity of breed is found in this
locality. Coarse-wool breeds— Cotswold, Lincoln, Co­
lumbia, and Romney— which are more adaptable to the
damp climate, predominate in the south. In the north
Willamette Valley some mutton types of good quality
are raised— Shropshires and Hampshires. Sheep are not
herded in this area, and operators run their flocks on
owned or leased land, much of which is former timber
land which has been burned or logged-over. Because the
climate is mild, ewes are bred to lamb in February and
March, unattended by herders. Fat lambs are sold off
grass in the May-July period to Oregon and California
markets.
Closer surveillance and accessibility to the farm flock
make management practices possible which are more dif­
ficult to apply under open range conditions, such as para­
site and disease control, or breeding and lambing control.
Shearing, however, sometimes poses a difficulty to the
farm flock manager. Operators of large range bands are
able to arrange for contract shearing at a central gather­
ing place by crews of professional shearers, and in such
manner accomplish this important task at the most ad­
vantageous time. Farm flocks, being widely dispersed
and composed of a small number of animals, do not offer
a continuity of employment to large crews, so that pro­
fessional shearers are more apt to concentrate on areas
of greater sheep population. The manufacture of im­
proved one- and two-man portable shearing machines,
and shearing training programs for students and farm
owners, are helping to overcome this problem.




Arizona
Sheep ranchers within Arizona follow various methods
of operation, and graze their flocks from the desert low­

3

lands to altitudes of 10,000 feet on summer pastures. The
basis of most flocks are fine-wooled Rambouillet ewes.
These are usually bred to mutton-type rams for the pro­
duction of early lambs. A large percentage of Arizona
flocks are summer grazed in the high mountain elevations
which cross the center of the state in a northwest-south­
easterly direction. The ewe bands winter to the north
and south of this range. Flocks which come from the
north of these mountains winter in the open on the high
Colorado River plateau.

hill area lamb somewhat later, usually in February, are
shorn shortly afterwards, and produce a high percentage
of early summer fat lambs sold off the ranges.
Arizona sheep numbers have been gradually reduced
so that by 1950 there were less than a third of the number
of stock sheep that grazed the state’s ranges in 1920.
District lamb feeding
Depending on the forage characteristics and variations
in seasonal pasture conditions, between a quarter and a
third of all western range lambs each year do not attain
sufficient flesh to be marketed for slaughter without ad­
ditional feeding. On this fact rests the basis of the lamb
feeding industry. Fed lambs constitute the main source
of lamb supply on the nation’s markets after the seasonal
inventories of range fat lambs have been exhausted, be­
tween late fall and early spring.
The production ranges of the District supply many
thousands of feeder lambs wThich are fattened each year
both within the District and east of the continental divide.
Within the District the feeding of lambs is an important
aspect of the sheep industry. California markets are the
chief outlets for District lambs fed through the late fall
and winter seasons, though northwest markets are of
growing importance.
California, Idaho, Utah, and Washington are the chief
lamb feeding states of the Twelfth District. In California
the largest concentration of lamb feeding is centered in
the Los Angeles area where lambs are fattened in com­
mercial feed yards. The same type of operations are car­
ried on in the San Francisco Bay area and extend into
the lower Sacramento Valley. There are two other im­
portant lamb feeding areas in the state: the permanent
irrigated pasture areas of the Imperial Valley and the
Stockton-Oakdale district in the Central Valley. From
northern California and out of the ranges of neighboring
states, large numbers of feeder lambs are imported and
finished in these pastures and on nearby stubble and
sugar beet fields.

Because winters in this area are rather severe, the
ewes are bred to lamb late— usually in May— and shear­
ing takes place in June or July. Lambs are marketed in
the fall, principally as feeders, for the late lambing season
is not conducive to fat-lamb production. The number of
sheep in this area has been greatly reduced during the
past decade, sheep having been displaced by expanded
cattle operations during recent years of high beef prices.
The eastern portion of this north district is grazed by
Indian flocks on the extensive reservations. Indian-owned
flocks are estimated roughly to represent one-half of the
state’s sheep. These sheep are of more mixed breeding,
producing a coarse, light wool. They yield a wool clip of
about two-thirds the usual weight of other fleeces.1 Some
of the meat and wool produced on the reservation is con­
sumed by the Indian tribes themselves, though feeder
lambs are exported during the fall and much wool dis­
posed of through traders making yearly pilgrimages to
the area.
The colorful migratory trail movements of the large
sheep bands of the state’s southern operators over the
Forest Service driveways have been greatly curtailed in
recent years. Bands from the pastures of the Salt River
Valley and desert foothill winter range areas graze over
the allotted driveways in late spring on their way to the
summer mountain feed and return again to winter feed
in the fall of the year. The long drive south during the hot
autumn season occurs at a time when ewes are on the
way to the lambing ground. Also, on the northern trek,
flocks trailing from the greatest distances are pressed
for time to arrive on the summer breeding grounds, and
the later bands must travel on over-grazed trails. Increas­
ing costs of operations make a high lambing percentage of
great importance, and the difficulties encountered by use
of the stock driveways have encouraged a greater use of
rail and truck facilities.

Considerable lamb feeding in commercial feed lots is
also practiced in other District states, in the lower Snake
River Valley of Idaho, in the Yakima area of Washing­
ton, and in the small irrigated valley areas of central Utah.
Commercial lamb feeding has been a significant factor
in the marketing of District-grown hay and grains, as well
as of the expanding supplies of agricultural by-products
from cotton, sugar-beets, and other farm products used
as feed.

There are two methods of handling flocks which winter
in the southern half of the state. Bands are taken either
to the alfalfa and irrigated fields of the Salt River Valley
or to the desert foothills between the valley and the
northern mountains. In either case, the climate being
mild, they are wintered in the open. Flocks on the pasture
areas lamb early, usually in November and early De­
cember, and are sheared in February and March. Fat
slaughter lambs are sold in early spring to take advantage
of the usual seasonally high market. Bands from the foot­
1 ‘ ‘Arizona Agriculture 1949” — Agriculture Experiment
sity of Arizona, Tucson.




Dependence on the Public Domain
In all District states, Federal rural lands constitute a
large portion of the grazing area. The degree of depend­
ence on this source of feed, therefore, has had a direct
influence on management practices and methods of opera­
tion. District sheep ranching is directly influenced by
policies of public land administration, by the location,
size, and accessibility of grazing allotments, by climatic
variations, and by the location and productivity of pri­
vately-owned or -leased lands.

Station, Univer­

4

A r iz o n a ...................................................
California ..............................................
Idaho .....................................................
Nevada ...................................................
Oregon ..................................................
Utah .......................................................
Washington .........................................

Rural land
holdings
in Federal
ownership1
(acres)
53,391,856
45,515,337
34,608,970
59,865,852
32,603,627
38,386,018
15,127,004

Land area
of state
(acres)
72,691,200
100,353,920
52,997,120
70,273,280
61,664,000
52,701,440
42,865,280

Twelfth D is t r i c t ...............................

279,498,664

435,546,240

Percent of
land area
Federally
owned
73
45
65
85
53
73
35
64

1 United States Department of Agriculture, Bureau of Agricultural Eco­
nomics, “ Federal Rural L a n d s," June 1947, table 25.

Approximately one-fourth of the total land area of
continental United States is Federally-owned, consisting
primarily of the residue from the public domain dis­
tributed under the nation's various land laws. These Fed­
eral lands, of multitudinous types, are administered for
the public benefit by a number of governmental agencies.1
The grazing of livestock is recognized as one of the pri­
mary uses of over 300 million acres of public land on
which approximately 20 million head of livestock (prin­
cipally sheep and cattle) are grazed some part of the year.2
Nature of Federal lands in Twelfth District

Over 61 percent of the rural lands in Federal owner­
ship in the United States are located in the Twelfth Fed­
eral Reserve District and of the total District land area,
64 percent is in Federal rural holdings (see table) . Nearly
70 percent of all public land incorporated into grazing
districts is found within the states of the Twelfth District
as are also half of all national forest lands, many of which
are open to grazing some months of each year.3 The
greater portion of these vast Federal tracts are moun­
tainous or arid and therefore not suitable for farming. In
varying degrees, however, they are adaptable to the
growing of natural grasses which serve as the raw mate­
rial for the production of a considerable portion of the
nation’s meat supplies. The forage growth is seasonal
in character and therefore of value to western meat and
wool production essentially when used in conjunction
with the feed resources of privately-held pasture or haygrowing areas.
Pasture lands incorporated into Federal grazing dis­
tricts are generally lands of lower elevations and are often
used in the spring and fall seasons in conjunction with
the summer pasture areas of the higher elevations on the
national forests. Consequently, to many of the Twelfth
District’s sheep operators, the holding of adequate graz­
ing privileges in either or both national forests or Bureau
of Land Management ranges is the determining factor in
the management plan. The possession of such privileges
and their extent and location are closely allied with the
location and type of private holdings or leases where
winter feed reserves are made available to breeding flocks.
'R u r a l land holdings in Federal ownership, by primary administrating agen­
cies in 1948, were administered by the U . S. Forest Service, Bureau of
Land Management, Office of Indian Affairs, National Park Service, B u­
reau of Reclamation, Soil Conservation Service, Fish and W ildlife Service,
W a r and Navy Departments, Tennessee Valley Authority, and other agen­
cies. In 1946 the functions of the Grazing Service and the General Land
Office were consolidated into the Bureau of Land Management.
2 Estimates are for 1945, made by the Bureau of Agricultural Economics,
U SD A.
8 Acreage figures taken from the B A E report, “ Federal Rural Lands —
1 9 4 7 ," Table 25.




In most areas, grazing privileges on the public domain
cannot be acquired by sheep-men without proof that suffi­
cient feed resources are available to insure year-round
operation for the number of animals covered by permit.
Grazing privileges

The holding of grazing privileges places upon oper­
ators the responsibility of adhering to range-management
practices which conform to the beneficial-use standards
established by the administrating agencies. These require­
ments are based upon the concepts of sustained-forage
yield and the multiple-use purpose of public lands. Graz­
ing privileges are granted for a specified number of sheep
and run for either one year or ten years (depending upon
type of privilege) with provision for renewal. Fees are
assessed on a per-head per-month or a per-acre basis.
Grazing privileges are transferable with the sale or dis­
posal of the operating unit. In general, the cost of grazing
livestock on the public domain is considerably less than
the cost of owning comparable range, as is indicated by
the high cash value placed upon grazing privileges when
a sheep ranch is sold. Most public ranges are of lowcarrying capacity, frequently badly depleted, and, in many
areas, remote from transportation. From the standpoint
of profitable operation, however, private lands of the
same character usually will not warrant the investment
of the capital necessary to increase their carrying capacity
significantly.
Use of Federal grazing lands

A rough estimate based on the most recent available
annual figures gives some indication of the extent to
which Twelfth District flocks rely upon Federal lands for
their grazing needs. During 1948 approximately 19 per­
cent of the total sheep months (based on the number of
sheep inventoried in the District on January 1) were
spent pasturing on grazing-district lands, and another
6.5 percent were spent in the national forests. In other
words, at least 25 percent of the total sheep months in
1948 were spent utilizing the natural forage of the public
domain.
The public domain is used to a greater extent in
Nevada and Utah than in other District states. In 1948
grazing-district lands were occupied for 46 percent of
the annual sheep months required by Nevada flocks, and
the national forests were used for 8 percent. In Utah the
shares were 54 percent and 7 percent, respectively. Public
lands are also used extensively in Idaho and Arizona, but
are less significant to the sheep industry on the Pacific
Coast.1

Stock Sheep Numbers
Records of the number of stock sheep on United States
farms and ranches are available for as early as 1867.
Since that pioneer date of the American range-sheep
1 Considerable numbers likewise grazed on Section 13 lands (Bureau of
Land Management lands not incorporated into grazing districts). Figures
for numbers grazed on these lands are not available. Grazing on stock
driveways on Federal lands and grazing on Indian lands and on stateowned lands are also not included in these figures.

S H E E P A N D L A M B S —U N IT E D S T A T E S A N D T W E L F T H D IS T R IC T .
J A N U A R Y 1, 1924-50

S t o c k S h e e p i n T w e l f t h D is t r ic t S t a t e s

Arizona ..........................................................
California .....................................................
I d a h o ...............................................................
Nevada ..........................................................
Oregon ..........................................................
U tah ...............................................................
W ashington .................................................
Twelfth District .......................................

N u m bers on
/-------- January 1-------- N
(in thousands)
1942
1950
719
382
2,977
1,602
1,858
990
698
435
1,577
671
2,137
1,284
583
298

Marions of

Percent
change
—
—
—
—
—
—
—

46
46
46
37
57
39
48

10,549

5,662

— 46

United S t a t e s ............................................................

........

— 45

industry, the number of stock sheep has fluctuated, at
approximately 8- to 12-year intervals, between a high of
51 million head in 1884 and a low of 27 million on January
1, 1950. Beginning in 1924, the trend of the stock sheep
population in the United States as a whole was upward,
and numbers were built up to over 49 million head on
January 1, 1942. Following this second record high, in­
ventories declined to a new low on January 1, 1950.

able in other fields of employment. The isolation and pri­
vation of a shepherd’s life has not been conducive to
attracting younger hands, and immigration laws have
restricted foreign immigrants who formerly replenished
the supply.

In the Twelfth District, the upward swing in stock
sheep numbers which occurred during the late 1920’s
reached its peak in 1931. A gradual decline during the
next decade or so was succeeded by a more rapid and
continuing decline beginning in 1942. Between 1942 and
1950, the number of stock sheep in the Twelfth District
dropped 46 percent to a low of 5.6 million head.

During and since the war, production costs have risen
sharply and relatively more than in some alternative
fields of agriculture. High levels of industrial employ­
ment and high wages were more influential in increasing
the per capita demand for beef, as industrial workers are
beef-eaters rather than consumers of lamb and mutton.
As a result, the farm price of beef in 1947 had increased
293 percent over the 1935-39 average and the farm price
of veal calves 242 percent. During the same period, how­
ever, the price of lamb rose 236 percent, sheep 160
percent, and wool only 106 percent. Consequently,
where grazing conditions were suitable, many sheep-men
switched to cattle raising after liquidating their flocks.

Reasons for declining numbers
Although an eight-year decline is not inconsistent with
the cyclical fluctuations in stock-sheep numbers over a
long period, it is significant that it took place during a
time of strong demand for meat and record domestic con­
sumption of apparel wool. This was occasioned by a num­
ber of factors, some of which have been more pronounced
in the Twelfth District than in the country as a whole.
Although wool prices were pegged in 1942, as part of
the Federal price control policy, at levels higher than the
yearly average which growers had received in over two
decades, prices of competing farm commodities proved
more attractive in many instances. In California and
Arizona, where large numbers of sheep are wintered and
lambed on rented pastures, field crops— cotton, flax, and
sugar beets— offered strong competition for land use.
Planting of marginal land to wheat in some District areas
was also expanded. Sheep-men viewed with uncertainty
the long-term outlook for continued price support on
wool and were apprehensive of the Federal Government’s
interest in a continuing low tariff policy. Production
factors too, were influential in reducing the number of
sheep in the District. As a band of ewes represents an
investment of $30,000 or more at present prices, reliable
and competent labor is essential to flock management
under range conditions. Turned out on the range in the
sole care of one or two herders for long periods, sheep
require the supervision of skilled and experienced labor,
possessed of a high degree of knowledge of the habits,
grazing requirements, and characteristics of the animals
under their care. During and since the war, competent
herders have been scarce. Higher wages have been avail-




These are the primary factors that have been influen­
tial in reducing the nation’s stock-sheep numbers to the
lowest point in an 83-year period. In the future, agricul­
tural adjustments may possibly reverse the recent down­
ward trend in over-all numbers. However, further re­
strictions on the use of the public domain for livestock,
continuing high operating costs, large capital require­
ments, and skilled labor shortages will probably continue
to encourage a reduction in large-range operations.
Reclamation and irrigation developments may increase
the number of farm flocks within the District. It is not
likely, however, that District ranges will ever again graze
as many stock sheep as in the past.

District Cash Income from Sheep Production
Through the grazing of sheep, a primary District re­
source is converted to economic usefulness. Closely allied
to this process and also of increasing economic impor­
tance over the last half century is the contribution of
sheep as a market for District feed crops and farm by­
products. Expansion in commercial lamb feeding and
growing use of farm flocks to diversify farming opera­
tions are likewise evidence of the integral part the indus6

P e r c e n t of D is t r ic t C a s h
and

P ercent of C a s h

R e c e ip t s f r o m S h e e p , L a m b s ,

W oo l t o C a s h

t ------ T w elfth D istrict— —>

L iv e s to ck
and
liv e sto ck
products
18.0
1 9 2 5 ................................................
1 9 3 0 ................................................
12.8
1 9 3 5 ................................................
12.0
1 9 4 0 ................................................ 13.4
1 9 4 5 ................................................
8.0
1 9 4 9 ................................................
7.6

Ca sh

R e c e ip t s o f :

A ll
farm c o m m odities
7.5
5.2
4.9
5.6
2.8
3 .0

t — — U nited

L iv e sto ck
and
liv e s to ck
produ cts
5.6
4.4
5.4
5.9
3.8
3.1

P r odu cts a n d A l l F a r m C o m m o d it ie s

States--N
A ll
farm c o m m odities
2.8
2.6
2.9
3.1
2.1
1.7

try plays in the agriculture of the Twelfth District. In
addition, the feeding of lambs has been a major influence
in the rapid development of irrigated pasture within the
District during the past ten years.

L iv e s to ck and
t -----liv e sto ck p ro d u cts— >

Arizona
Nevada .................
O r e g o n .................
Utah ......................
Washington
Twelfth District.

1925
P e r­
cent
17.3
10.7
38.4
36.5
20.1
46.0
7.1
18.0

1940
P e r­
cent
10.1
8.8
28.7
25.9
15.1
30.0
6.4
13.4

1949
P e r­
cent
5.1
5.3
19.9
17.8
6.3
18.3
3.0
7.6

' 1925
P e r­
cent
9.6
3.9
17.3
30.1
10.5
25.8
2.6
7.5

A ll farm
com m odities1940
~1949
PerP er­
cent
cent
4.6
1.5
3.0
1.9
14.7
7.6
22.6
14.3
7.8
2.8
20.6
12.5
2.8
1.1
5.6
2.9

ritical shortage of skilled labor. In the
irrigated valley areas of California and in the dry land
farming regions of Washington, Oregon, and Idaho, large
expansions in acreage and value of crops have also been
responsible for the relatively weaker position of sheep as
cash income producers.

Over the past three decades, however, sheep have con­
tributed a declining share of the cash income received by
District farmers. Nevertheless, the industry supplied over
$104 million in cash returns to District farmers in 1949.
This was approximately one-fourth of total United States
cash farm receipts from sheep, lambs, and wool. Receipts
from sheep production in 1949 amounted to 2.9 percent
of cash receipts from all District farm commodities and
7.6 percent of the receipts from livestock and livestock
products, as against 1.7 percent and 3 percent, respec­
tively, for the United States as a whole.

In spite of the downward trend in the ratio of cash in­
come supplied by the sheep industry, absolute dollar re­
turns in most District states in 1949 were higher than in
1925. Increased price levels more than offset decreases
in inventories over the period. In Oregon, however,
where in 1925 cash income from sheep, lambs, and wool
amounted to $13.6 million, cash income from sheep farm­
ing in 1949 totaled $9.5 million. Sheep produced $5.3
million for Arizona growers in 1925, but only $3.9 mil­
lion in 1949. The stock sheep population declined faster
during this period in Oregon and Arizona than in the
other District states.

Since 1925, the decline in the share of cash income con­
tributed by sheep raising has been greater for District
ranchers than for the nation’s farmers in general. This
sharper reduction in the District is significant in view of
the historical position of this branch of the livestock in­
dustry in the agricultural economy of the region.

Relative importance of meat and wool

Within the District, the greatest declines in the rela­
tive importance of cash returns from sheep ranching to
total cash returns from livestock and livestock products
over the past 25 years have occurred in Arizona and
Oregon. A quarter-century ago, when Arizona ranges
carried many large flocks, sheep accounted for over 17
percent of the cash returns from livestock, but in 1949,
only 5 percent. The shift to cattle operations on the north­
ern ranges, the expansion in crop farming and cattle
feeding in the southern irrigated valleys, and the oper­
ational problems and range restrictions in the central area
have all been influential in significantly reducing the im­
portance of sheep to Arizona’s cash farm income. Sheep,
lambs, and wool, which once produced more than a fifth
of Oregon’s cash income from livestock, brought but 6
percent of the total in 1949. The replacement of sheep by
cattle in the grazing areas east of the Cascade range and
the transition to smaller farm flock operations west of
the mountains have been influential factors in the decline
in the ratio of income from sheep to Oregon’s livestock
income.

The production of wool is an integral part of the sheep
industry. In some areas of the world it constitutes the
chief motive for sheep raising. In the United States, how­
ever, the sale of wool as the main source of producers’
income has been superseded over the years by the sale of
livestock. The once paramount position of wool in the
industry is emphasized by the fact that to this day most
western producers’ organizations are identified as 4'wool
growers” associations.
Of increasing importance to District sheep producers
is the rising proportion of cash income supplied by the
sale of lambs. Lambs are sold on a market that is highly
seasonal and competitive. Wool, however, though experi­
encing extreme price fluctuations, has long been shielded
to a greater or lesser degree by Government aid— pref­
erential tariffs, Federal price support, and Government
purchases.
Between 1922 and 1929, the sale of lambs contributed
an increasing share of sheep growers’ income, at a time
when lamb and wool prices were at relatively stable levels.
In the next three years, both lamb and wool prices fell
precipitously— lambs 63 percent, wool 71 percent. With
this great drop in the price of wool, receipts from the sale
of livestock continued to increase relatively. In 1933,
however, the average price of wool recovered rapidly,
increasing 129 percent over the previous year, whereas
lamb prices rose only 13 percent. Producers’ incomes re­
flected this disparity, as income from wool in 1933 con­

Recent declines sharper
The accelerated decline in the relative earnings of cash
returns from sheep in the District during the war and
post-war periods has been largely a reflection of the dras­
tic liquidation of breeding flocks. In the range areas of
all District states, cattle have displaced sheep to a con­
siderable extent as a result of more favorable prices for




R e c e ip t s o f S h e e p , L a m b s , a n d W o o l t o

R e c e ip t s o f D i s t r i c t L i v e s t o c k a n d L i v e s t o c k

7

tributed the largest share supplied by wool to growers’
income in the past 25 years.
Relatively sharper increases in wool prices in 1936-37
and again in 1940-41 arrested the upward trend in the
proportion of sheep growers’ income earned by the sale
of livestock. Since 1941, however, lamb prices have in­
creased at a much more rapid rate. Average prices re­
ceived by farmers for lambs in 1949 averaged 136 per­
cent above the 1941 level, but prices for wool were up
only 38 percent. This greater recovery by lambs over
wool has been accompanied by a sharp increase in the
relative proportion of cash income from the sale of live­
stock as against the sale of wool. Owing to the recent
extraordinary rise in the price of wool, however, it is
likely that a larger share of producers’ income in 1950
and 1951 will be supplied by wool than has been the case
for some time.

RATIO OF GASH RECEIPTS FROM SHEEP AND LAMBS TO
CASH RECEIPTS FROM SHEEP, LAMBS, AND W O O L UNITED STATES AND TWELFTH DISTRICT, 1925-49
Percent

District sheep and wool income

The western range sheep industry was as readily adapt­
able as the industry in the eastern or “ native” sheep states
to the growing demand for meat which accompanied the
expansion of United States population after 1900. Access
to extensive areas of relatively cheap feed was conducive
to the production of lambs on a scale compatible with the
market demand. Breeding and management emphasis
was shifted, within practicable limits, to the production
of fat slaughter or feeder lambs. Consequently, the tran­
sition from wool production as the chief source of income
from sheep ranching in the District paralleled the na­
tional trend. Over the past quarter century, however, the
shift has been somewhat more pronounced in the Twelfth
District. In 1925, District sheep producers derived 60
percent of their cash income from the sale of livestock;
in 1949, livestock’s share was 78 percent. For United
States sheep raisers in general, returns from livestock
sales increased from 67 percent to 77 percent of cash in­
come during the same period. In other words, the pro­
portion of income from livestock sales during the past
two decades rose considerably more in the District than
in the nation as a whole.
In California, Idaho, and Arizona, the sale of livestock
contributes a somewhat larger share of sheep growers’
income than in other District states. The production of

II.

choice spring lambs and the large percentage of lambs
saved have produced for California growers a high ratio
of cash income from the sale of livestock. Another con­
tributing factor is the variegated quality of the state’s
wool which results in a generally less valuable clip.
The production of high quality lambs in the shed-lamb­
ing areas of the Snake River Valley has been influential
in supplying Idaho sheep producers with a relatively high
ratio of cash returns from livestock sales. In Idaho, 82
percent of cash receipts from the sheep industry in 1949
was derived from the sale of sheep and lambs. Sheep and
lambs contributed approximately three-fourths of grow­
ers’ cash receipts in the remaining District states. The
high ratio of income from livestock sales (76 percent) in
Washington, which does not produce spring lambs, is due
largely to the high ratio of lambs saved to the total num­
ber of ewes. Over a 25-year period, Washington sheep
growers have saved an average of 104.3 percent lambs
from inventories of all ewes one year old or older. This
is the highest average of the District, followed by Cali­
fornia’s 99 percent. In 1948, the percentage of lambs
saved in Washington was 111 percent.

MARKETING THE DISTRICT LAMB CROP

O f all sheep sold through wholesale channels during

largely determined by the forage and climatic character­
istics of each locality. Annual variations in feed condi­
tions likewise influence the percentage of lambs from any
flock which will meet the requirements of the fat lamb
trade. In years of poor pasture conditions, a higher per­
centage of a flock’s output requires additional feeding
for the lambs to be brought to a slaughter finish.
District producers market their lambs through a num­
ber of outlets: direct ranch sale to slaughterers or to
lamb feeders, sale to speculators for resale, and competi­
tive bidding at terminal markets. A small percentage is
also marketed through cooperative selling agencies. Few

the 1935-44 period, approximately 84 percent were
marketed as lambs. It is estimated that in 1890, in con­
trast, 75 percent of all sheep sold were marketed at the
age of four years or older. Range lambs are marketed
when four to six months o ld ; fed lambs up to 14 months.
No price differential is made between ewe lambs and
wether lambs.
District lambs are marketed either as fat lambs off pas­
ture and range for immediate slaughter, or as feeders
to be conditioned for slaughter. Whether lambs are nor­
mally marketed through slaughter or feeder channels is




8

lambs are marketed as yet through the auction yards
which are a growing medium of livestock marketing in
the West.
The seasonal character of range lamb production makes
orderly marketing difficult. Because of this seasonal fac­
tor a few major packing concerns have become the na­
tion’s principal lamb buyers. In 1949, major firms bought
approximately 81 percent of all sheep and lambs slaugh­
tered in the United States.1 Large concerns, with a net­
work of plants and wide distribution facilities, are able
to absorb seasonal surpluses and to channel dressed car­
casses to consumption centers in response to fluctuations
in demand. Large plants are likewise better equipped to
retrieve sheep byproducts economically— a relatively im­
portant factor in the profit margin of livestock slaughter.
A large share of the District lamb crop is marketed by
direct ranch sale and is contracted for some months in
advance of delivery. Pre-season contracts are ordinarily
covered by a deposit on the approximate number of lambs
expected to be delivered. Lambs are bought f.o.b. ship­
ping points, and payments customarily made on a pound­
age basis subject to a 2 or 3 percent shrinkage deduction
or allowing the stock a “ stand” overnight without feed
or water.
Major buyers follow the lamb crop over the District
as the season develops, contracting in advance so as to
insure a steady supply for their delivery commitments.
Buyers are largely representatives of major packing firms
or are independent speculators who supply trans-ship­
ment centers, such as Ogden, Denver, Kansas City, and
Chicago. Fat lambs are sorted for delivery to slaughter
centers, and feeders are sold to mid-West and Pacific
Coast feeding areas.
Sale of lambs in terminal markets to be sold at com­
petitive bid has been of decreasing importance in the last
three decades. Fat lambs are a perishable commodity and
few growers feel close enough to the day-to-day price
changes to risk forwarding large shipments long distances
on a fluctuating market. This has been especially true
during recent years when weekly fluctuations in prices
have been wide.

ward from the intermountain region— both fat lambs for
slaughter and feeders to replenish the rapidly expanding
commercial feed-yards.
Marketing California lambs

Beginning about mid-March, accelerating through
April, and reaching a peak in May, thousands of spring
lambs are marketed out of the San Joaquin-Sacramento
Valley area and the central coastal ranges. These lambs
find a ready outlet in eastern consumption centers and
in the San Francisco and Los Angeles areas. Pre-season
estimates indicated that approximately 325,000 early
lambs would be marketed from this area during 1950.
Two other District areas also market lambs at this
season, though in smaller numbers. From the irrigated
pasture areas of the Imperial Valley, spring lambs are
sold on the Los Angeles and San Diego markets. Out of
the Salt River Valley alfalfa fields of Arizona, early de­
liveries are made both eastward to the Kansas City area
and westward to southern California. Arizona’s early
spring lamb crop in 1950 is estimated at approximately
70,000 head.
Following the heavy run of spring lambs, sheep and
lambs marketed from California farms decrease steadily
the remainder of the year. Range lambs from Humboldt,
Mendocino, and other producing areas and lambs fat­
tened on permanent pastures constitute the main withinstate supplies during the summer period.
Inshipments from out of state to California slaughter
centers commence after spring and early summer sup­
plies have been depleted, and originate largely from
within the Twelfth District— Nevada, Utah, Oregon,
and Idaho. Both fat lambs for immediate slaughter and
feeder lambs for feed-lot replacement or finishing in irri­
gated pasture are shipped to California.
While the spring run of early California lambs is in
progress, some good to choice grade lambs are slaughCALIFORNIA LAMB AND SHEEP SLAUGHTER1 AND OUT-OFSTATE EARLY LAMB SHIPMENTS, 1940-50*
Number o f

Seasonal Lamb Movement
Marketing of the District lamb crop follows a general
annual pattern determined by the seasonal variations
characteristic of the region. As the delivery of California
early lambs declines in June, fat range lambs from south­
ern Idaho’s shed-lambing areas start to market. These
are followed from July through September by marketings
from the high intermountain areas of Nevada, Utah and
Idaho, and eastern Oregon and Washington. The prewar
movement out of this area was primarily eastward. The
large increase in Pacific Coast demand, however, has of
later years drawn an increasing proportion of lambs west* I n 1941, the four leading packing companies slaughtered 81.3 percent of
the lambs and sheep dressed under Federal inspection; the second four,
10.5 percent; the next five, 4.1 percent, and ten additional companies, 2.4
percent. Twenty-three packing firms accounted for 98.3 percent of feder­
ally inspected slaughter of sheep and lambs, which in turn was 81 percent
of total slaughter in 1941.
Statement of Consideration for Revision Regulation N o . 2 3 9 : O . P. A .
Price Control Volume 9— Page 4 1 :641.




Source ; California Crop and Livestock Reporting Service.

tered by San Francisco and Los Angeles packers and
shipped by fast refrigerator freight to Atlantic Coast
markets. Shipments of these highly perishable dressed
carcasses to eastern points are handled primarily by the
major packers. Lesser numbers are handled by chain
stores for their own accounts or by brokers purchasing
from independent West Coast packers.1 During 1949,
out-of-state shipments of dressed lambs amounted to ap­
proximately 29,000 head. This was a great increase in
volume over previous years and was prompted by the
record prices for good to choice lamb carcasses prevail­
ing at Chicago between March and June.

Production and Consumption
Production of all meats increased sharply after 1940.
The meat requirements of the armed forces and our allies,
in addition to the demand of a widely employed civilian
population, led to rapid increase in the slaughter of all
classes of livestock. The yearly average production of
lamb and mutton from 1938 to 1941 was 892 million
pounds. The production of lamb and mutton which ac­
companied the depletion of sheep inventories from 1942
to 1945 amounted to over a billion pounds yearly. The
result of this heavy liquidation of stock has been reflected
in annual production since 1945. Production has declined
successively each year to the 605 million pound output
in 1949— 43 percent below the 1942-45 average.
Production of beef and pork, on the other hand, has
remained above prewar levels. In the case of pork, while
consumption per capita has moved upward, supplies have
also increased. In the case of beef, continuing high pro­
duction over prewar levels is facing the continuing high
demand of a widely employed population. Beef is eaten
by all population groups so that consumption readily re­
sponds to increased incomes and is reflected in continu­
ing high prices.
Consumption of lamb, however, has not increased with
expanded income. Consumption of lamb differs with pop­
ulation groups, as well as by geographic location.2 Lamb is
consumed primarily by those in the middle and upper
income groups— those occupied in less strenuous occu­
pations— and their consumption remains fairly constant.
Consumption of lamb and mutton is also greater in popu­
lation groups of predominantly Mediterranean extrac­
tion— peoples to whom lamb and mutton are by custom a
more familiar meat than beef.
Per capita consumption of beef and pork increased from
60.8 and 63.3 pounds, respectively, in 1942, to 64.0 and
68.1 pounds in 1949. Meanwhile, consumption of lamb
and mutton was down during the same period from 7.2
pounds per person and 5.2 percent of total per capita
meat consumption to 4 pounds and 2.7 percent. It is evi­
dent that during this period of high and widely distrib­
uted incomes, consumers in the United States have dem-

onstrated a preference for meat other than lamb. The
large increase in Pacific Coast demand, however, has of
later years drawn an incrreasing proportion of lambs
westward from the intermountain region— both fat lambs
for slaughter and feeders to replenish the rapidly ex­
panding commercial feed-years.

Lamb Prices
Although per capita consumption of lamb and mutton
has declined sharply in the postwar period, lamb prices
in the past few years have remained at high levels largely
as a result of short supplies at a time of high consumer
income. At no time in the present century has the supply
of stock sheep been so influential in maintaining favorable
prices to producers. Over the years, however, producers'
prices and stock sheep inventories have not always trav­
elled in such divergent directions.
Lamb prices and inventories

Annual fluctuations in the prices producers receive for
their lambs are not automatically reflected in an increase
or decrease in the supply of stock sheep. The increasingly
large investment both in fixed capital and in breeding
stock that has been required in a sheep enterprise over
the past 40 years precludes any quick adjustment of the
scope of operations to annual price changes.
Between 1910 and 1924 the trend in the nation’s stock
sheep inventories, except for a two-year period in 191819, was consistently downward. In the first decade of
this period, when the farm prices of sheep rose relatively
more than cattle prices, sheepmen found it profitable to
dip into breeding flocks and sell on a rising market. The
price break in 1921 was of short duration and was fol­
lowed by eight years of relatively high prices. The op­
timism for continuing high prices for both lamb and
wool which prevailed after 1923 encouraged a general
expansion in flocks. The depression which followed the
disastrous price break in sheep, lamb, and wool prices in
1929 prompted growers to step up production sharply
in an attempt to mitigate losses through increased mar­
ketings. The price recovery from 1938 forward encour­
aged producers to continue expanding their flocks to the
records set in 1942. Following this period of peak stock
sheep numbers, factors both within and without the in­
dustry so precipitously reduced inventories that record
prices eventually replaced record numbers. The present
active demand for breeding stock gives some indication
that current prices for lamb and wool may again be influ­
ential in building up the nation’s supply of sheep.
Seasonal price movements

Through January, February, and early March, the na­
tion’s lamb requirements are met through the marketing
of “ old-crop” fed lambs. Though the available supply of
fed lambs influences price movements at this period, old
crop lambs, as the season progresses, are approaching the
weight limits at which lamb carcasses can be economi­
cally wholesaled. That in itself acts as a limiting factor on
the relative levels to which prices normally rise during
this period.

“ Yearly Review of Movement California Spring
L a m b s/* 1949. #
* Professor Edwin C. Voorhies, Agricultural Economist on the Giannini
Foundation, University of California, has pointed out in a yet unpublished
study that per capita lamb consumption in San Francisco is 8 times greater
than in Minneapolis and St. Paul, Minnesota, and 20 times greater than
in Birmingham, Alabama. Lam b consumption is also heavily concentrated
in large cities.

1 C a li f o r n i a W o o l G r o w e r :




10

sent a problem also. Leg of lamb is at its choicest when
first served. Sales problems are encountered when a leg
of lamb must be served at a second and third meal, when
its original cost is comparable to an equal weight of beef.
In an effort to meet this problem, the trade has encour­
aged the sale of cuts more adaptable to family needs
and has met with some success. One method has been
to cut the long leg into two small roasts to overcome the
objection of size. Another has been to sell full-cut legs—
containing loin for chops, shank for stewing meat, and
the center portion for roast. Many customers, through
habit or otherwise, are not disposed to make use of such
a large supply. Low value cuts— principally stewing meats
— have a more limited and concentrated outlet. The de­
mand is strongest in localities where European-born pop­
ulation groups predominate. When the supply of stewing
cuts in any locality is temporarily burdensome, price re­
ductions to facilitate sales cannot readily be offset by
mark-ups on more expensive cuts, which force them to
a less favorable cost relationship with beef from the pur­
chaser’s point of view.

The arrival of California and Arizona early spring
lambs at the nation’s market centers influences prices
markedly. Arriving on the market in the spring of the
year, as a choice seasonal product at a time when supplies
of old-crop fed lambs have been largely depleted, early
“ milk lambs” command premium prices. Depending upon
the available supply and time of delivery due to seasonal
forage conditions, the seasonal price peak tends to vary
between April and May.
The supply throughout the nation of old-crop fed lambs
remaining to be marketed at this season, however, some­
times exerts a competitive influence on prices at the be­
ginning of the spring lamb season. This competition is
more keenly felt by the earlier deliveries and when wool
prices are high. Although heavy carcasses from old-crop
lambs compete at a price disadvantage with choice spring
lamb carcasses, the value of full-wooled pelts carried by
older lambs is sufficient at times to narrow spring lamb
margins significantly.
Following the California early lamb movement, prices
tend to react generally downward through the summer
in response to volume marketing from western and Texas
range flocks and from mid-west farm flocks. By fall, the
demand for lambs to replenish commercial yards for win­
ter feeding normally revives competition with the slaugh­
ter trade, initiating an upward swing in prices during the
last quarter of the year.
Between 1910 and 1940, seasonal fluctuations in pro­
ducers’ prices for lambs were remarkably uniform. In
1941 and 1942 and again in the immediate postwar years,
following the removal of price controls, expanding con­
sumer demand obscured the usual seasonal fluctuations
in lamb prices. The break in lamb prices in mid-1948 and
again in 1949 was part of a movement of livestock prices
in general to somewhat lower postwar levels. A readjust­
ment toward prewar seasonal price patterns may also
have been indicated, but it remains to be seen whether
the seasonal pattern in lamb prices will again be as pro­
nounced and as consistent, as long as purchasing power
continues high and stock sheep numbers remain low.

Lamb versus beef prices

Between 1938 and 1946 the average annual price per
hundred weight of good and choice slaughter lambs ap­
proximated the level of good-grade steer prices on the
Chicago market. During this period lamb averaged 96
percent of beef prices. In 1947 the average annual ratio
dropped to 90 percent; in 1948 it was further depressed
to 83 percent. The high level of lamb prices in the first
six months of 1949— during the marketing of the District
spring lamb crop— again raised the ratio to 96 percent.
In 1949, however, the early-lamb crop developed
poorly. The severe winter necessitated heavy supplemen­
tal feeding, development of the crop was retarded, and
much of it was below normal finish. Lambs grading good
and choice were relatively scarce. During the last half
of 1949, the ratio of lamb prices to beef prices turned
sharply downward and averaged 85 percent. The price
of good to choice lamb moved closer to the comparable
grade of beef during the first three months of 1950. Dur­
ing the second quarter, lamb prices again dropped in re­
lation to beef.

Lamb merchandising

Light lamb carcasses apparently are the most desirable
from a retailing standpoint, as cuts from lighter carcasses
meet with higher consumer acceptance. Lamb cuts, like
cuts from all livestock carcasses, cover a wide range of
values. Highest price cuts are chops and legs. Neck,
breast, shanks— stewing meats— are low price cuts. Large
carcasses, and particularly those grading choice, nor­
mally carry a heavy covering of fat over the back and on
the kidneys and tailhead, which requires trimming by
the handler or is passed on to the consumer. Chops and
legs— relatively high price cuts— from heavy carcasses
are troublesome in this respect and encounter buyer re­
sistance when a substantial amount of high price fat must
be relegated to the waste pail. Although large chops, un­
like a beef steak, present no divisional problem at the
dinner table, they nevertheless are likely to suffer, at
high prices, by a cost comparison. Large lamb legs pre­




Outlook

A number of factors will undoubtedly have a bearing
on the relation of lamb and beef prices in the future. Im­
proved breeding and management practices and a sharp
increase in commercial lamb feeding have resulted in an
increase in the average weight and finish of lambs over
the past quarter century. Though the consumption of
lamb is relatively more limited than beef, a high level of
economic activity, population increases, and a decreasing
supply have helped maintain an active demand. There has
been little evidence of premium prices being paid for light
carcasses or discounts imposed on heavy carcasses. Where
discounts have been imposed on marketing of heavy
lambs— such as occurred last fall and early winter in
Pacific Northwest markets— it occurred at a season of
fed-lamb marketings and not in the range-lamb market11

A

verage

W

e ig h t

of

S

h e e p

U

1925
1930
1935
1940
1945
1946
1947
1948
1949

a n d

n it e d

S

L

S

a m b s

la u g h ter ed

in

t h e

ta tes

Average live
weight

Average dressed
weight

(pounds)

(pounds)

....................................................................................... 81.48
................................................................................... .... 82.33
................................................................................... .... 84.40
........................................................................................86.18
.... 94.4
.... 93.7
.... 93.6
.... 94.4
.... 94.0

38.98
38.96
39.77
40.57
43.2
42.9
43.2
43.6

Source : United States Department of Agriculture, Production and M arket­
ing Administration, Livestock Branch, M a r k e t N e w s , 1948 statistics.

ing season. Growers of range lambs will logically try for
maximum weights on the lambs they market while no
price penalty exists.
It is difficult to say whether the lower ratios of lamb
to beef prices that have appeared in recent years are more
than temporary. A decline in the ratio of lamb prices to

beef prices, however, at a time of continuously decreasing
lamb and mutton supplies, may be an indication of con­
sumer resistance to lamb cuts of large size or which carry
a heavy coverage of high-cost fat. Such a factor could
eventually be reflected in producers’ returns on their
lambs, if the upward trend in the size of lambs continues.
In view of the limited pattern of lamb consumption, a
significant increase in the nation’s inventories of both
beef cattle and stock sheep during the next few years
would place lamb in keener competition with beef. It is
perhaps possible that under such circumstances the prob­
lem in merchandising heavy lamb carcasses might be suffi­
ciently increased to be accompanied by price penalties
imposed on heavy lamb carcasses. Such a development
would be of particular concern to the Twelfth District
sheep industry which produces nearly one-fourth of the
nation’s lambs and most of the spring lambs marketed.

III.
Uruguay, 33 percent for the Union of South Africa, 27
percent for New Zealand, and 9 percent for Argentina.1
Practically all the wool produced in the United States
is suitable for the manufacture of clothing of one kind or
another, or for uses other than floor coverings. The
United States is dependent on foreign production for its
carpet wool needs, and it is for this reason that wools
used in the manufacture of rugs, carpets, and other floor
coverings have duty-free access to the domestic market.
The principal sources for domestic carpet wool require­
ments are listed in the accompanying table.

is produced in most parts of the world. The type
of fiber suitable for the manufacture of clothing—
including fine, medium, and coarser grades— is grown in
the great pastural areas of the world— Australia, New
Zealand, Argentina, United States, Uruguay, and the
Union of South Africa. Carpet wools— with the excep­
tion of those from Argentina1 and New Zealand— are
produced chiefly in the areas of early civilization— China,
India, Pakistan, Turkey, Iraq, Iran, Afghanistan, and
Syria— where primitive methods of animal husbandry
are still practiced because of the depletion of the forage
resources over many centuries.
ool

U

n it e d

S

ta tes

I

m po rts

of

C

a r pet

,---------- 1937---------- N ,---------- 1948---------- \
W

ool

P

r o d u c t io n

in

P

r in c ip a l

P

r o d u c in g

C

19501
Australia .......................................... 1,100
430
Argentina .......................................
375
New Z e a la n d ................................
325
U S S R (Europe and Asia)
247
United S t a t e s ................................
210
Union of South A f r i c a ............
150
Uruguay .........................................

1949
1,045
420
370
315
253
214
154

Percent
of total

Thousand
pounds

Percent
of total

A r g e n t in a ...................40,252
China ...................... ... 27,564
N ew Z e a la n d ____ __17,994
I n d i a ........................ ....25,073
Pakistan .................
2
Syria ........................
9,074
I r a q ...........................
8,600
Other ..........................37,873

24.2
16.5
10.8
15.1
2
5.5
5.2
22.7

215,596
17,107
27,427
18,095
14,990
7,539
13,235
27,131

63.2
5.0
8.0
5.3
4.4
2.2
3.9
8.0

T o t a l .................... 166,430

100.0

341,263

o u n t r ie s

(grease basis— million pounds)

/------ Averages------ \
1941-45 1936-40
1,052
1,088
411
506
314
350
250
310
425
429
252
234
144
126

Country

Per­
cent of
world
total
1949
27.6
11.1
9.8
8.3
6.7
5.6
4.1

Thousand
pounds

100.0

W

ool1

,---------- 1949---------- \

ThouPersand
cent
pounds of total
25,657
4,074
2,831
4,266
2,992
1,228
2,051
4,109
47,208

54.4
8.6
6.0
9.0
6.4
2.6
4.3
8.7
100.0

1 Actual weight basis. Because of rounding, figures will not necessarily add
to totals.
2 Included with India.
Source: U . S. Department of Commerce, Bureau of the Census, F o r e ig n
C o m m e r c e W e e k l y , July 25, 1949.

1 Preliminary.
Source : United States Department of Agriculture, F o r e ig n C r o p s a n d M a r ­
k e ts .

United States production

With the exception of the United States, the main wool
producing areas are far removed from the great textile
manufacturing centers. As a consequence, the wool trade
ranks as one of the major sources of international ex­
change. The few major surplus-producing countries
account for approximately 90 percent of the wool enter­
ing international trade. The importance of the fiber to the
economy of these countries is implied in the ratio of the
value of wool exports to total export value; such ratios
in 1946 were 32 percent for Australia, 34 percent for

Domestic wool production is composed of wool shorn
from the sheep and wool “ pulled” from the pelt of
slaughtered animals. Shorn wool production has always
represented the major portion of domestic production
and since 1930 has fluctuated between 81.4 percent and
85.9 percent. Production of shorn wool in 1949 was 85.7
percent of total United States production. About 90 per­
cent of domestic pulled wool is pulled by meat packing
plants which are the major slaughterers of the yearly
lamb crop.

' I n 1948 and 1949 the Argentine clip averaged 419 million pounds, of which
approximately one-fifth could be considered of the carpet wool type.

1 U . S. Department of Commerce, F o r e ig n C o m m e r c e W e e k l y , September 26,
1949.




12

rate basis with variations in the services offered by the
flock owner. Current District shearing rates are averag­
ing 40 cents per head. A good professional can clip ap­
proximately 175 to over 200 head in an eight hour day,
depending upon the type of sheep being shorn.

W O O L P R O D U C T I O N 1—T W E L F T H D IS T R I C T S T A T E S , 1949
M illio ns o f
pou nds

16

14

□

Percent of District production

12

10

C a lif

U ta h

Idaho

Ore

Nev

W ash

In the range area, shearing is normally done where the
flocks can be gathered at a convenient location and where
shearing sheds are available or where portable wooden
floors can be easily set up. The wool is packed at the
shearing location in burlap bags containing from 250-350
pounds of raw wool. Most of the domestic clip is shorn
between February and July. W ool must be shorn at least
once a year or much of it would be shed or lost on brush
and plant growth on the range. The heavy fleece affords
a protection against winter cold, but on the other hand is
excessively warm and debilitating in the heat of summer.
Shearing is therefore seasonal and timed after the winter
is over but prior to the maturing and drying of grass
seeds which contaminate the clip and reduce its value.
In the sheep growing areas of the United States little
grading of wool as to quality is done at the shearing loca­
tion other than packing separately lambs’ wool, black
fleeces, and sometimes belly clippings. The Australian
practice of grading at the shearing plant is not followed
by American sheep producers generally. W ool grading
requires a thorough acquaintance with grade, length of
staple, and other wool characteristics as well as its manu­
facturing uses. Owing to the generally smaller size of
American sheep raising operations and the wide range in
the quality of the domestic clip, the grading of wool at
shearing locations would not warrant the extra costs in­
volved, even if competent graders were available. Pulled
wool, however, is usually graded and sometimes sorted
at the time of pulling. Even under the present methods of
producing domestic wool, particularly in the western
range area, it is possible that sales appeal could be en­
hanced if more care were exercised in handling the clip
at the shearing plant.

Ariz

1 G rease basis.
Source : U. S. Department of Agriculture, Bureau of Agricultural E co­
nomics, W o o l P r o d u c t i o n a n d I n c o m e , March 1950.

Though wool is produced in nearly all states, 78 per­
cent of total domestic shorn-wool production originates
west of the Mississippi River. The clip from this area is
referred to as Territory wool. Texas,1 Wyoming, and
Montana are the leading producers in this area, account­
ing for 31 percent, 10 percent, and 9 percent respectively
of the 1949 clip. Of the states east of the Mississippi, the
area of farm flock operation referred to as the native wool
states, the leading producer is Ohio where some of the
finest domestic Merino wool is raised.
Twelfth District production

In 1949, the Twelfth District produced 23 percent of
the nation’s total wool clip. Almost three-fourths of the
total District clip came from California, Utah, and Idaho,
with California the largest supplier. The quality of the
California clip, however, is perhaps less uniform than that
of other District states, and some of it is heavily infested
with grass seeds which require carbonizing in processing
for use. Though the larger portion of the state’s output
consists of fine wools, there is considerable use of cross­
breeds, producing medium and coarse grades, in areas
concentrating on the production of early lambs. Wools
from the California north coast counties, on the other
hand, compare favorably with the finest wools raised in
the United States.

W ool Marketing
There is little direct selling of wool from the producer
to manufacturing mills. Mills are concentrated on the east­
ern seaboard, far from the western production areas, and
are ordinarily in the market for a greater amount of a
particular quality of wool than is available from one pro­
ducer. As producers’ wool is not graded, direct purchase
by the manufacturer from the wool grower would force
the manufacturer to accept some grades and classifica­
tions not suitable to his requirements. The mill buyer,
therefore, must look to a reliable source of supply of
graded wool for his exact needs. Manufacturing needs
are also less seasonal than are the production phases, and
the mills must therefore rely on stocks accumulated dur­
ing the annual shearing season.

Shearing

In most sections of the United States sheep are shorn
once a year, generally in the spring or early summer.
Shearing time is determined by the climatic and range
conditions of each locality. Shearing is done on a piece

The dissimilarity in the characteristics of wool produc­
tion and wool textile manufacture have led to the market­
ing of wool primarily through wool brokers, commission

xThe Texas clip is frequently referred to separately as Texas wool.




13

houses, or cooperative wool marketing agencies. The
wool broker, or merchant, buys direct from the grower
on a cash basis, accumulating large inventories at his
warehouses, when the wools are graded1 and resold to
mills according to their grade requirements. W ool is also
marketed through commission houses which acquire their
stocks on consignment to be sold to merchants, charging
the grower a fee for the service. Payment to the grower
for his wool is usually made only after the commission
man has consummated the sale. Cooperative marketing
associations, to a greater or lesser degree, perform the
services of the wool merchant for their member growers.
Membership wools are warehoused, graded, and then
sold directly to mills. Cash advances are made to the
grower and final settlement made after the grower's wool
is disposed of. Some direct buying from producers is done
by large mills whose manufacture is of sufficient diversity
to assimilate a variety of wool sorts. Local buyers also
operate throughout the sheep growing districts, purchas­
ing on their own account— usually the smaller clips— for
resale to merchants.
The wool grower and the tariff

The nation’s wool growers have long benefited from
Government aid in one form or another. It is doubtful
that United States sheep raisers or woolen manufacturers
could have successfully withstood competition from
foreign importations during the past hundred years with­
out some measures of preferential treatment. The prin­
cipal form of Government aid received by the American
wool grower has been protection through tariffs 011 wool
and wool imports. In 1816, wool was made subject to a
15 percent ad valorem duty. Almost continuously since
that time, United States producers have enjoyed a level
of tariff protection which, in effect, has maintained Amer­
ican wool prices at levels higher than the world market,
and secured a major part of the domestic market for
American woolen manufacturers.2

It is the nature of sheep to grow wool, even though
bred primarily for the production of meat. The harvest
of the fiber, however, incurs costs to the producer which
have no relation to the raising of sheep for the production
of meat. Many costs must be charged directly to the pro­
duction of wool: shearing, packing, hauling, as well as
some labor costs and investment in plant and equipment
— high cost factors in the production of domestic wool,
which must compete with cheaper-grown imports. Sheep
raisers, therefore, are keenly responsive to trade policies
which tend to weaken the competitive position of domestic
wool. This has been amply demonstrated in the wide­
spread apprehension among growers over the lower tariff
levels implemented by the Geneva Conference in 19481 in
accordance writh the American policy of cooperation with
dollar-short nations, among which are numbered the
world’s leading wool producers.

W ool in the Inter-war and W a r Periods
Following World W ar I, the farm price of wool de­
clined 70 percent between 1918 and 1921, accompanied
by a sharp decline in the number of stock sheep and in
the production of domestic wool. Consumption of wool
likewise dropped sharply. Meanwhile, the war-accumu­
lated stocks of old-crop wool in United States and in
foreign hands were relatively large. Domestic producers,
therefore, faced a disconcerting outlook of record-low
lamb and wool prices, further threatened by foreign clips
which had the right of free entry. This situation resulted
in the passage of the Tariff Act of 1922 which imposed
an import duty of 31 cents per pound of clean content on
apparel wools.
Following imposition of the tariff and in company with
a rise in the general level of business activity, flocks were
expanded and domestic wool production rose from 272
million pounds (grease basis) in 1923 to 382 million
pounds in 1929, an increase of 40 percent. During the

1 C O M P A R A T IV E W O O L G R A D E S
Official
standard
wool grades

Correspond­
ing blood
grades

80’ s 1
70’s \
64’ s J

Fine

6 0 ’s Ì
58’s J

V.ì blood

56’s

t é blood

Official
standard
wool gtades
50’s 1
4 8 ’s J

Correspond­
ing blood
grades
Va.. blood

4 6 ’s

Low Va. blood

4 4 ’s

Common

4 0 ’s Ì
36’s j

wool from the offspring of these crosses was lessened in quality or fineness
in varying degrees by the cross. The United States system of grading re­
ferred to the “ blood” proportion of straight Merino breeding in the cross,
i.e., a three-eighths blood wool represented a cross of H Merino and H
of another breeding. These “ blood” terms are now arbitrary trade names
referring only to the fineness of the fiber and no longer represent the
breeding of the sheep from which the fleece is shorn. Because of the nu­
merous disadvantages of this system of nomenclature, the United States
Department of Agriculture in establishing official wool standards in 1926
adopted the English or spinning county system to designate the quality
of wool.
W o o ls grading 46 ’s and higher are classified according to length of staple,
designated as strictly combing, French combing, and clothing. Clothing
wools are too short to be combed profitably and are used in goods other
than worsted. The textiles used in the manufacture of suiting, overcoats,
and most other apparel are usually in one of two classes— worsted or
woolen. The worsted cloth is made from combed wool only, resulting in a
cloth with a clear, smooth texture, as the long fibers through the combing
process are drawn together horizontally. Thus, the length of fiber is of
great significance in the weaving of worsted cloth, and manufacturers must
sort each fleece not only as to its quality but also with respect to its length.
The mill, therefore, after purchase of a lot of wool graded 5 8 /6 0 ’s must
sort each fleece, removing portions which are not up to the combing grade
standard. These sorts are then channeled to other wool uses. W oolens are
made from carded wool of coarser or shorter fiber which has not been
combed, hence the fibers are not drawn parallel in the yarn. W oolens are
more loosely woven than worsteds, appear soft and fuzzy, and are suitable
for heavy weight material. The grades 56’s and finer are those suitable for
the manufacture of suiting. The medium grades are more generally used
in making knit goods and sports wear. ( / . F . W i ls o n , C a li f o r n i a A g r ic u l t u r a l

Braid

The grade of wool is principally determined by the diameter of the individ­
ual wool fiber, and the fineness of “ quality’ ] of the fiber is essentially the
defining factor in the use to which the wool is put. The extreme fineness of
wool sheared from Merino sheep, as well as the “ crimp” or waviness in
the fiber which gives it resiliency and therefore strength, gives rise to its
high value in the wearing of the better grades of textiles.
The nomenclature of wool grades originated from two sources. The E n g­
lish system determines grade by the number of hanks (560 yards) of
yarn that could be spun from 1 pound of combed wool. One pound of 64
fineness or “ quality” would make 64 hanks of yarn, while a coarse wool
of 4 0 ’s or 36’s would make 40 and 36 hanks. The English nomenclature is
also referred to as the spinning county system. The United States system,
which has gradually been superseded by the spinning count system, pre­
sumably originated in this country as a result of crossing Merino sheep
with other sheep breeds possessing less desirable wool characteristics. The
2 For two periods, 1894-97 and 1913-21, apparel wool imports into the United
States were duty free. Tariff protection is reflected on about 98 percent of
the wool raised in the United States. A complex system of tariffs on woolen
goods has also indirectly benefited United States wool growers over the
long period.




E x te n s i o n S e r v i c e , C ir c u l a r 1 0 6 , N o v e m b e r 1 9 3 7 . )

1 Tariff rates in the Geneva agreement in wools finer than 44 ’s were reduced
by 25 percent, or from 34 cents to 25.5 cents per clean pound.

14

same period, imports of foreign wool declined from 266
million pounds to 102 million, or 62 percent. Producers’
prices (which in 1929 averaged 17 cents per pound,
grease basis) during the same interval fluctuated between
a low of 30 cents per pound to a high of 39 cents. Total
mill consumption in this period averaged 540 million
pounds or 8 percent below the 1918-21 average, but the
proportion of domestic wool consumed in relation to total
mill consumption of apparel wool increased steadily. Be­
tween 1923 and 1929, stock sheep numbers also increased
33 percent and the proportion of total mill consumption
supplied by domestic fiber rose from 55 percent to 69
percent.
Further tariff legislation in 1930 increased the duty to
34 cents per pound (clean content) on wools finer than
44’s quality— that is, on wools comparable in quality to
practically all domestic production. In accordance with
the general depression in commodity prices immediately
following 1929, however, the average farm price of wool
dropped sharply from 30.2 cents per pound to 8.6 cents
in 1932. Nevertheless, the following year the price read­
justed upward in contrast to the sluggishness of other
commodity prices, and for the next eight years fluctuated
between a low of 19 cents in 1935 and 1938 to as high
as 32 cents in 1937. Though lamb prices remained de­
pressed in the first half of the decade, and made only a
slow recovery in the late 1930’s, stock sheep inventories
continued to expand as growers attempted to compensate
losses by volume lamb marketings and by expanding
wool sales.
The dual income possibility of sheep operations, the
more rapid recovery of wool over the price of other com­
modities, and the quicker adjustment to expansion or
contraction of operations placed sheep raisers in a more
favorable borrowing position among lending institutions
than other forms of livestock enterprises during the 1930’s.
This was reflected in a further expansion in stock sheep.
Numbers therefore increased from 33 million head in
1922 to over 46 million by 1940. The proportion of do­
mestic apparel wool to total wool consumed by United
States mills, which from 1920 to 1923 averaged approxi­
mately 62 percent, increased to an average of 69 percent
between 1924 and 1930, and from that time until im­
mediately preceding World W ar II it averaged 78 per­
cent. The re-imposition of the tariff in 1922 and the
further increases awarded in 1930 were significant factors
in reactivating the domestic wool growing industry after
the sharp set-back experienced in the period immediately
following W orld War I.

R A T IO O F D O M E S T I C W O O L P R O D U C T I O N T O T O T A L
D O M E S T I C C O N S U M P T I O N O F A P P A R E L W O O L , 1925-49

percent above 1939 and increased 25 percent more in
1941. These rising prices induced growers to increase
their inventories of stock sheep, which by 1942 reached
the highest level in sixty years. Domestic wool produc­
tion increased accordingly. Production of wool, which in
1939 and 1940 averaged 425 million pounds (grease
basis), totaled over 453 million in both 1941 and 1942.
Nevertheless, it was felt by Government leaders that in
the event of a prolonged war, military needs alone would
require more than total domestic production could prob­
ably expand. Concern was also felt over the possible inter­
ruption of the sea lanes over which the greater part of the
foreign supply would have to be transported. The Govern­
ment, therefore, implemented two policies to insure ade­
quate supplies of this vital material ; first, the offer of
price incentives for further expansion in domestic pro­
duction, and second, the creation of a wool stock-pile.
The Buy American Act of 19331 was an important
factor at this time in the sharp advance of domestic wool
prices and the consequent increase in production. In pre­
war years, domestic wools had sold well below duty-paid
imported wools of equal grade. By 1940, however, do­
mestic wools were commanding a premium over imported
stocks2 in spite of the fact that foreign clips in general
were better prepared and required less conditioning.

The war period

By the end of 1940, military requirements were of such
magnitude that it became necessary to allow some im-

Beginning in 1940, when stocks were relatively low,
the demand for wool in the United States, both for mili­
tary needs and expanded civilian requirements, sent wool
prices soaring. Whereas average prices received by pro­
ducers for lambs in 1940 rose 4 percent over the previous
year and in 1941 increased another 18 percent, the aver­
age price received by growers for wool in 1940 was 27




1The Buy American A c t of 1933 required that in filling- Government con­
tracts, domestic products be used if available and if not conducive to unrea­
sonable additions to cost. During the early 1930’s Government contracts
for articles manufactured from wool were negligible, and this A ct had
little effect on bolstering domestic wool prices during that time.
8 Between 1924 and 1939 the price of domestic territory fine, half, threeeighths, and quarter bloods at Boston averaged more than 10 cents per
pound below comparable grades of imported wools. B y 1942, domestic
wools averaged 4.7 cents higher than duty-paid imported wools of similar
quality and 8.7 cents higher in the fall of 1943.

15

PRICES OF DOMESTIC AND IMPORTED FINE1 WOOLS
AT BOSTON, 1935-47

1 6 4 ’s-70’s, scoured basis.
2 In bond price converted to a scoured basis and adjusted for tariff and differ­
ence in preparation of domestic and foreign wool.
Source : U . S. Department of Agriculture, Bureau of Agricultural E co­
nomics, T h e W o o l S i t u a t i o n , June 1947.

ported wools to be used in filling Government orders;
nevertheless, domestic clips were assured of a demand at
very satisfactory prices. Civilian requirements, mean­
while, were filled by foreign wools which were available
to the mills at lower prices, in more favorable condition,
and frequently of more desirable quality. In March 1941,
added incentives to expansion of domestic wool produc­
tion were contained in the W ar Department’s policy of
paying premium prices on textiles manufactured from
domestic wool. The result was a further rise in the level
of wool prices above comparable foreign grades.
War stock-piling

The plan to stock-pile wool was inaugurated early in
1940. Through a series of agreements with the United
Kingdom (which had taken over the marketing of all
Empire wool production), a program was evolved for
the accumulation of large reserves to be stored in this
country and against which both nations could draw, if
necessary. Ownership of the stock remained in the hands
of the British Government. Early in 1942, the United
States inaugurated a stock-pile of foreign wool on its own
account by purchase of nearly 300 million pounds (actual
weight) of Empire wool. Later, 34 million pounds of Uru­
guayan wool were added to this reserve in a cooperative
effort to reduce the burdensome supply that had accumu­
lated in this Latin American republic. Except for a neg­
ligible lot of Argentine wool, no further purchases of
South American wool were made for the war stock-pile.
The bulk of South American exports to the United States,
much of which consisted of coarser grades, was not con­
sidered essential war material.

tary and civilian consumption. Consumption of wool in
1941 was 47 percent above the previous year and 56 per­
cent above the 1935-39 average and rising rapidly. Yet
domestic wool production, which had been expanding,
was still only 44 percent of total mill consumption. The
situation, therefore, was such as to signal a sharp rise in
wool prices which would have posed a threat to the
entire price structure. The result was the issuance of an
official price schedule in December 1941, soon after re­
vised upward, which pegged domestic wool prices, but
at substantially above 1941 averages.
Though in 1941 it had seemed far from certain, Empire
wool continued to arrive in the United States in spite of
war action in the Pacific. The anticipated wool shortage
did not develop, so that by 1943 a number of factors were
conspiring to darken the outlook for the domestic woolgrowing industry. Production costs had risen sharply.
A falling off of Government orders appeared likely in the
near future. Prices for domestic wool were so much above
duty-paid foreign wools in Boston that domestic mills
were using the latter source for other than Government
orders. Over a three-year period, 1940-42, prices paid for
fine domestic wool were 14 percent higher, on the aver­
age, than for similar foreign grades. The domestic clip
forced into commercial channels would therefore have
been required to compete with the lower price level of
imported wool. And into the future, the reserves of
Empire-owned stocks, as well as those in the hands of
the United States Government, loomed as a threat to the
stability of the wool market at the end of the emergency.
Two things happened at this time in response to the
situation. First, many operators shifted to alternative
agricultural pursuits, thus beginning a reduction in stock
sheep numbers; second, the Government came to the
rescue with a program to assure wool producers a market
for their product. The Commodity Credit Corporation
instituted a purchase program for domestic wool and be­
came the sole purchaser at the then prevailing prices.1 By
far the greater bulk of the wool stock-pile accumulated by
the Government was acquired under the purchase pro­
gram of the Commodity Credit Corporation inaugurated
in 1943. The wool purchase program, however, was not
essentially a stock-piling program, but rather a further
means of protecting the domestic wool-growing industry,
which in spite of relatively high wool prices, was in
trouble.
Though the order directing the sale of domestic wool
to the Corporation terminated in August 1945, the pur­
chase program was continued on a voluntary basis until
early in 1947. Because of the price differential between
foreign and domestic wools of comparable grades, most
of the domestic clip continued to move to the C. C. C.
during 1946 and early 1947.

C. C. C. purchase program

In 1941, the exigency of conditions was bringing
greater and greater pressures on the general level of
prices. In the case of wool, the pressure was furthered
by the scarcities which were envisioned as a result of the
outbreak of the Pacific war posing an additional threat
to imports from Australia.1 Domestic production at this
time was less than half the amount required for both mili-

1 On April 17, 1943, the W a r Food Administration issued Food Distribu­
tion Order N o. SO to take effect April 25, 1943. This directive required
that all wool not sold by producers before April 25 m ust be sold to, and
purchased only by, the Commodity Credit Corporation. Lots of 1000
pounds or less could be bought for private account, provided such wool
was later sold to the Commodity Credit Corporation. Other exceptions ex­
cluded less than 2 percent of the U . S. clip. T h e Corporation was pro­
hibited from selling its wool below parity.

1 “ W ithin three days after the attack on Pearl Harbor, the price of A u s­
tralian wool on the Boston market advanced 5 and 6 cents per pound
(clean basis) in volume orders and as much as 7 cents in extreme cases.”
— Office of Price Administration, Price Control, Volum e 1 2 -4 4 : 933.




16

C

o m m o d it y

C

C

r e d it

o r p o r a t io n

W

P

u r c h a se s

of

D

o m e s t ic

ool

(actual weight— million pounds)

Quarter
April-June .........................................
July «September ...............................
October*December ........................
January-March ...............................
T o t a l ................................................

D

1943
10.7
135.5
78.9
41.7
266.8

o m e s t ic

P

1944
89.8
173.9
76.2
46.7
386.6

1945
85.3
151.1
63.1
40.1

1946
47.8
129.0
72.3
33.4

339.6

282.5

r o d u c t io n

(grease basis— million pounds)

Shorn ...................................................
Pulled ..................................................

1943
378.8
65.2

1944
338.3
73.5

1945
307.9
70.5

1946
280.4
61.3

Total ................................................

444.0

411.8

378.4

341.7

So urce: United States Department of Agriculture, Bureau of Agricultural
Economics, W o o l D u r in g W o r ld W a r I I , M ay 1947, and W o o l S ta t i s t ic s , 1949.

The Commodity Credit Corporation stock-pile, there­
fore, was a significant factor in absorbing domestic pro­
duction during the four-year period 1943-46 and in main­
taining the price of domestic wools above comparable
grades of competing sources.
Domestic consumption of wool between 1941 and 1946
had been at record levels, yet domestic production aver­
aged only 35 percent of total mill consumption during the
same period. When the end of the war also brought to
an end a large military demand, Commodity Credit Cor­
poration stocks of domestic apparel wool amounted to 469
million pounds on April 1,1946, or 23 percent larger than
the previous year’s domestic clip.
Hence, during the war the paradoxical situation de­
veloped in which the Government was insuring prices for
wool at levels above competing foreign supplies, mills
were consuming record supplies of wool, and yet domestic
growers were reducing their flocks to new low levels.

The Postwar Period
As has been seen, the wool situation was not the sole
factor affecting the sharp decline in sheep raising in the
United States in recent years. W e have also seen that un­
certainty over long-term Government price support and
tariff policies, the eventuality of an end of military re­
quirements, and the spectre of large stocks which they
feared would plague postwar markets were contributing
factors leading the nation’s sheep operators to view the
outlook with concern. Subsequent developments in the
postwar economy, however, allayed the industry’s appre­
hension. After 1945 the situation was characterized by an
orderly liquidation of war-born stocks and by high prices
which reflected pent-up domestic purchasing power and
European rehabilitation needs.

annual dominion clips.1 In September 1946 the J. O. re­
sumed the auctions which had been discontinued by the
“ take over” of Empire wools. During the year the wool
textile industry had recovered sufficiently in Western
European countries— notably Belgium, France, Britain,
and Italy— to create a demand that was amply filled by
those J. O. stocks, and when the auctions opened, prices
moved rapidly upward. Stocks were rapidly reduced
through 1947-48-49 and at price levels conducive to im­
proving the marketing outlets for Commodity Credit
Corporation holdings in the United States.
Domestic-owned foreign wool: The domestic stock­
pile which United States growers had viewed pessimis­
tically during the war likewise met an unprecedented de­
mand and by 1950 had been practically eliminated. The
Government-owned stocks of foreign wool acquired by
the Defense Supply Corporation during the war had
nearly all been disposed of by mid-1945. During 1944 and
1945, 264 million pounds of United States-owned foreign
wool stocks were sold either at auction or in private sale,
and the last remaining lot was disposed of in Europe
through the Foreign Economic Administration.
Domestic wool: The stock of wool purchased by the
Commodity Credit Corporation was procured largely at
O PA ceiling prices for domestic wool, scoured basis, de­
livered at Boston. Purchase was made through accredited
“ handlers” who operated under conditions prescribed by
the Corporation. Growers received the appraisal price,
less handlers’ fees, transportation costs, and C. C. C. fees
to cover costs of appraisal, storage, and interest. Prices
received by growers averaged 42 cents per pound (grease
basis) as compared with average prices of 40.1 cents in
1942 and a 1935-39 average of 23.7 cents.
While J. O. offerings on the world market were rising
steadily in price, wools offered by the C. C. C. found a
ready domestic market. The Corporation, however, was
prevented by law from liquidating its stocks below parity.
As the parity price of wool rose with the general infla­
tion in all prices, the Government was forced to revise its
selling prices upward. The favored position of domestic
to foreign wool prices was weakened thereby so that early
in 1947 Commodity Credit Corporation sales were
greatly reduced.
Following a Presidential veto of a bill containing pro­
visions for establishing fees and quotas on wool imports
as inconsistent with avowed United States reciprocal
trade policies, Congress enacted Public Law No. 360 in
August 1947 providing price support to domestic wool
growers through 1948. The bill also authorized the Com­
modity Credit Corporation to dispose of its stocks, both
owned and to be acquired, at less than parity. When
C. C. C. prices were lowered thereby, Government stocks
again moved into domestic consumption and imports de­
clined. Imports continued to be reduced in 1948 and 1949
owing to high replacement costs of foreign supplies and

Stock-pile liquidation

Foreign wool: At the war’s end, the Empire wool
stock-pile was moved out of this country to foreign stor­
age. The United Kingdom Dominions W ool Disposal,
Ltd., a British company known as the Joint Organiza­
tion (J. O .) was organized for the purpose of liquidating
this stock-pile as well as to stabilize the marketing of the




1 Composition of the J. O. consists of four representatives from the United
Kingdom, two from Australia, and one each from New Zealand and South
Africa.

17

generally lower levels of consumption. At the present
date, C. C. C. stocks have been practically exhausted.
One of the major threats to United States wool grow­
ers which existed at the end of World War II— that of
large stock-piles both in this country and abroad— has
therefore been successfully eliminated in an orderly man­
ner and under circumstances which have maintained
average yearly prices that have been very favorable to
the grower.
World production

It is estimated that world wool production in 1950 will
be approximately 2 percent above the 3.8 billion pound
output of 1949. The high wool prices prevailing during
the past two years have been influential in expanding
flocks in most major and minor producing areas, except
in the Union of South Africa, Canada, and the United
States. Drought conditions reduced production in South
Africa in 1949 and its effects will be further felt in 1950.
The continued decline in Canadian production since 1945
was caused by much the same impulses which similarly
affected wool raising in the United States. W ool produc­
tion in Europe has recovered rapidly since the war and
in 1949 was 11 percent above the 1947 low. For 1950,
European output is expected to come within 6 percent of
the 1936-40 prewar average. Australian producers since
the depressing drought of 1945 have been rebuilding their
flocks. Production was up 7 percent in 1949 over 1948,
and estimates for 1950 indicate a further increase in the
clip. Increases in wool output are likely to occur in both
New Zealand and Argentina in the current year.
W orld wool stocks continued to be depleted in 1949 as
consumption remained at high levels. Stocks which on
July 1, 1947 were estimated at 4.2 billion pounds had de­
creased to 3.6 billion a year later, and in mid-1949 were
placed at 2.9 billion. W orld consumption of wool during
the postwar years has exceeded production, and the ac­
cumulated war-stocks materially aided in filling the acute
demand. Widespread foreign needs have maintained a
high level of world prices which has extended into 1950.

The domestic situation

Though consumption of apparel wool in the United
States in 1949 was 29 percent below 1948, it was still 22
percent above the 1935-39 average. Production mean­
while was 40 percent below the prewar average. The de­
cline in 1949 consumption, accentuated in the first half of
the year, was essentially the result of smaller output of
men’s and boys’ tailored clothing and women’s and chil­
dren’s ready-to-wear apparel. Inventory reductions in
wholesale and retail outlets were also of some influence.
Per capita consumption of apparel wool was reported at
2.3 pounds in 1949 as against 3.3 pounds in 1948, and
consumer expenditures for clothing were down 7 percent
from 1948. Nevertheless, with world consumption of
wool outstripping production, wool stocks relatively low
both at home and abroad, and the continuance of a high
level of domestic economic activity, and anticipated mili­
tary requirements, demand for apparel wool in 1950 was
expected to continue above prewar levels in spite of the
reduction in domestic consumption that has occurred over
the past four years.
Smaller domestic output likely: As contrasted to the
increased production anticipated in the major wool pro­
ducing areas of the world in 1950, wool production in the
United States is likely to reach a new low as a conse­
quence of a 2.7 percent drop in the number of stock sheep
during 1949. Shorn wool output which in 1949 was 217
million pounds in the grease has been estimated at 212
million for the 1950 shearing. This would be only 59 per­
cent of the 360 million pounds production encouraged by
the price support act. As slaughter of sheep and lambs
will probably be less owing to the further decrease in
numbers as well as to a retention of some stock for flock
expansion, production of pulled wool in 1950 is also likely
to be below last year. Total domestic production of both
shorn and pulled wool in 1950, estimated at 247 million
pounds (grease basis), or 2.3 percent below last year’s
70-year low, would seem to insure a favorable climate for
the maintenance of prices well above parity.
Prices moving upward: The present price support pro­
gram, under the Agricultural Act of 1949, requires that
wool prices be supported at such a level, between 60 and
90 percent of parity, as to encourage an annual production
of 360 million pounds of shorn wool. Price supports for
1950 were announced at 90 percent of the parity price of
wool1 on March 15 which on that date was 50.2 cents per
pound (grease basis), thereby establishing average sup­
port at 45.2 cents per pound.

W O O L P R O D U C T I O N 1— P R I N C I P A L P R O D U C IN G C O U N T R IE S , 1949
Miiliorx of
pounds
ï 2 0 0 _------- —

__________________
■ —

-

_______ .

Prices received by growers for shorn wool during the
past 18 months as well as open market prices at Boston
for Territory wools were above 1948 levels; yet in 1949
there was considerable uncertainty over market trends
among producers as well as dealers and manufacturers.
Open market prices at Boston on wool grading 60’s or
better, which were at peak levels during the first quarter
of 1949, dropped sharply thereafter. Following devalu­
ation of the British currency in September last year,

1 Grease basis.
Source : U . S. Department of Agriculture, F o r e ig n C r o p s a n d M a r k e t s , June
19, 1950.




1 Revised parity.

18

accentuated reductions in quotations on the London auc­
tion created a further element of uncertainty in domestic
wool channels which was aggravated by the sudden recov­
ery of the foreign market shortly thereafter. Both farm
prices and Boston quotations soon reflected this upward
movement, however, and prices strengthened toward the
end of 1949 and continued to rise during 1950. Prices
received by domestic wool growers averaged out at 49.3
cents per pound (grease basis) in 1949, compared to 48.8
cents in 1948 and 42.0 cents in 1947. In March of 1950,
the average farm price was 49.6 cents and by August 15
it had risen to 58.3 cents. Current wool prices will un­
doubtedly result in a further increase in the average price
received by farmers over the nation as a whole.
Outlook

The immediate as well as the long-term outlook for
domestic wool must now be viewed in the light of the
present critical international political situation. Should
the present involvement in Korea be of long duration,
heavy military requirements would again be saddled on
domestic production. The contemplated expansion in mil­
itary personnel in the United States and possibly in allied
nations as well would again bring about a shift in wool
utilization from civilian to Government consumption. The
world production of Merino wools from which the better
textiles are manufactured was sharply curtailed after
1943 owing to the diminishing output in the United States




19

and smaller clips as a result of drought conditions in Aus­
tralia and South Africa. The proportion of crossbred
wools, 58’s and coarser, was correspondingly upward.
This led to the more extensive use of medium type wools
by American manufacturers and served to create an up­
ward pressure on prices of the less desirable grades. Even
with a significant increase in the output of finer grade
wools, expanded military needs in the event of a pro­
longed war situation could again be expected to restrict
supplies of these types available for civilian use. This
should effect a continuance of the relatively strong de­
mand for medium and coarser type wools, as textile man­
ufacturers would be forced to rely upon these sources for
civilian needs.
The present situation then, in view of recent develop­
ments, implies the following: (a) expanded military
requisitioning of worsted wools which are in relatively
short supply, (b ) United States civilian consumption,
presently above prewar levels, supporting a demand for
medium grade wool fibers, (c ) continuing strong foreign
demand for civilian needs with a likely increase in for­
eign military requirements, (d ) carry-over stocks of ap­
parel wool at the lowest postwar level, with Government
ownership of the stock at negligible proportions. The do­
mestic outlook, therefore, is for continuing high wool
prices with the possibility of reimposition of Government
price ceilings and the probable rebuilding of the Govern­
ment stock-pile if the world political situation should grow
worse.