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Lamb prices up, but wage rule worries sheep ranchers

Issue Date: September 22, 2021
By Cecilia Parsons

p>Current strong prices for lamb and a short domestic supply would normally be cause for much optimism among California sheep-ranching families. But, while they welcome the better market prices, many are facing a fight to remain in business.

Sheep ranchers have expressed concerns about a new overtime and wage rule set to come into effect Jan. 1. This rule, they say, would force them to lay off herders, cut back on their flocks or exit the business altogether.

"We already operate on very tight margins," said Cole Bakke, who operates IOU Sheep Company with his family in Tulare County. Costs for feed and transportation continue to rise, he said. The looming hike in herder compensation is a serious concern.

Assembly Bill 1066, which was signed into law by Gov. Jerry Brown in 2016, followed by an amended wage order in 2019, requires sheepherders be paid overtime wages.

The new wage order was modified without a comment period or industry input from organizations such as the California Wool Growers Association and others almost three years after it was signed and became law.

Historically, sheepherders have been exempt from state hourly minimum wage and hourly overtime requirements due to the unique nature of the job.

According to Monica Youree, executive director of Western Range Association, the new wage rules will immediately result in a 119% increase in sheepherder wages. That means monthly salaries would go from $1,955 to $4,286. Youree noted that sheepherders now receive housing and in some cases food and phones as part of their job.

This would bring California's sheepherders to a compensation level more than twice what is paid to similar workers in 11 other sheep and wool-producing states.

"Yes, they are on call 24 hours a day, but on most days they fill water tanks, maybe move some fence. Most of the time there is no physical labor involved, and certainly not for 24 hours," Bakke said.

California Wool Grower Association leaders have been very vocal about their request for an exemption to the rule, based on the unique nature of a sheepherder's job.

Dan Macon, a former association president, said there are about 175 family sheep operations in the state and they employ about 350 herders annually. Most herders are Peruvian and work under the H-2A program.

Bakke, who runs bands of sheep in the Central Valley, currently employs 12 sheepherders. All have been working for him for at least 10 years. The increase in wages due to the overtime rule caused him to pencil out the impact on his bottom line. To stay in business, he said a third of his sheep would need to be sold, and a third of his herders would be out of a job.

All this comes at a time when land managers, cities and counties are realizing the value of targeted grazing by livestock to prevent wildfires. This niche for sheep and goats is rapidly gaining interest as fire prevention in drought-stricken California becomes paramount.

Targeted grazing as a fire prevention tool has become another source of income for sheep producers in recent years. Those who offer this service bring animals to urban and rangeland settings to reduce fuel loads. Some flocks also graze under solar panels on large solar farms for weed control.

CWGA President Ed Anchordoguy said the California Rangeland Conservation Coalition sees livestock grazing as a conservation tool.

Andrée Soares, association vice president and operator of Star Creek Land Stewards in Los Banos, said 39 California cities in 34 counties have hired flocks to minimize fire risks in inaccessible areas. Herders, she said, are a vital part of this service and it would not be possible to achieve the fuel reduction programs without them.

Soares and Clovis sheep rancher Ryan Indart said they have been meeting with key state legislators to develop an alternative and amend the law. She noted that 42 state legislators have signed a letter sent to the governor advocating for an amendment to AB 1066.

Meanwhile, in a recent lamb market outlook report, Texas A&M Extension economist David Anderson said the current strong prices for lamb are a result of low supplies. Fewer animals are moving to slaughter, and dressed weights have also decline.

The recent average, Anderson said, was 60 pounds. Cold-storage stocks are also below a five-year average and the lowest in recent years. Lower volumes of lamb imports also contributed to low supplies, but have also made the U.S. an attractive market for Australia and New Zealand lamb.

Lack of rangeland feed and higher prices for feed have driven numbers of mature sheep to market, Anderson said. Although prices for mature sheep are higher than in recent years, the loss of these sheep will lead to smaller total flock numbers next year, and supplies of lamb could remain tight.

"Tight domestic supplies are likely to keep prices high next year and attract more imports," Anderson said. "But production costs are also high."

Dave Goldenberg, CEO of the California Sheep Commission, said fewer sheep numbers have affected the funding for promotion of lamb and wool.

(Cecilia Parsons is a reporter in Ducor. She may be contacted at ceciliaparsons8@gmail.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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