Sheep farmers enjoying good year skirt US agriculture's tough financial times
| Craig, Colo.
Steve Raftopoulos sweeps his arm through the thin mountain air. ``People look at this and they say: `I'd like to have this,'' he says, indicating the herd of 2,200 woolly sheep behind him. ``But they don't realize the time and effort put into it.''
It is midmorning. Since before 5 a.m., Mr. Raftopoulos has been up preparing for today. In the predawn darkness, he has picked up three workers, a sleepy-eyed reporter, and one dog on his way to this ranch nearly 7,000 feet above sea level. Now, he and his workers are busy funneling sheep through a white-fence corral to be partly sheared.
``The highlight of agriculture -- it's the sheep industry,'' Raftopoulos says.
Unlike much of the rest of US farming, these are good times for the sheep industry. Prices are up. Profits are rolling in. ``Generally,'' says one Agriculture Department official, ``it's been on the upbeat.''
On its own, this small industry concentrated in the West has made the transition from surplus to profitabilty. For some sheepmen, the transition has been bankruptcy; for many others, financial hardship. Even a large rancher like Raftopoulos has felt the tough times. ``It'd scare you to know how much money we've lost,'' he says.
Like many younger farmers and ranchers, Raftopoulos got into the business just before everything went wrong. After completing a BA in accounting at the University of Colorado, he returned to the sheep ranch owned by his father, George, a Greek immigrant. In 1979, Raftopolous and his brother, John, struck out on their own -- buying a huge ranch complete with buildings and 6,000 sheep.
The brothers expanded the operation: John built a herd of cows from 20 to 1,000, while Steve expanded the sheep herd to 11,000 ewes (female sheep that produce the lambs he sells).
Then, suddenly, cattle and sheep prices plummeted along with the value of their land. From 1981 to 1984, average lamb prices tracked by the Agriculture Department stayed below Raftopoulos's break-even point. Other sheepmen were hurt by weather. Several years of drought in Texas (the No. 1 sheep-producing state), and a severe winter for Rocky Mountain producers forced many to reduce their herds. Faced with continuing losses, some sheepmen had to sell out completely.
The result was a boon to the survivors. With demand relatively stable and a 20 percent decline in sheep numbers since 1982, lamb prices shot up.
The Agriculture Department Oct. 4 estimated thatlamb this year would fetch an average 69 to 71 cents a pound at one Texas market -- up from 57.4 cents two years ago. Sheepmen did get subsidies through a wool program, but it was the turnaround in lamb, providing 70 percent or more of their revenues that did the trick.
For those who weathered the tough years, the high prices mean the start of a comeback. ``Sheep are profitable if you didn't have all that debt load,'' Raftopoulos says.
To the casual observer, the amounts of money involved seem phenomenal. Raftopoulos talks about a recent $60,000 loss without batting an eye. Asked the cost of this particular ranch, Raftopoulos looks down at his boots a moment then answers: ``Three and a half million dollars.''
It is lunchtime. Raftopoulos's mother, Georgia, has arrived and is pulling out pots and pans from the trunk of her white car. Inside there is lamb shank and lamb stew, still warm despite the long drive. Raftopoulos, his Spanish-speaking hired hands, and the team of shearers feast.
It is an unusual scene, not only for the locale but for the food involved. In the US, lamb is a rare commodity these days. For every pound of lamb he consumed last year, the average American ate 61 pounds of beef, 48 pounds of pork, and 43 pounds of chicken.
But the sheepmen's promotional arm -- the American Sheep Producers Council -- is not particularly worried. ``Our challenge,'' says executive director Rodger Wasson, ``is to have an environment for profitability'' for the producer.
Instead of merely promoting lamb to consumers, the council has taken aim at various segments of the lamb and wool-industries from packer to retailer.
``We're well beyond our expectations,'' Mr. Wasson says of the $5 million program, funded by a tariff on wool imports. Since 1979, the council reports a 56-percent increase in the number of restaurants serving lamb.
The sun has clouded over again. And Raftopoulos, sitting in one of the small handmade trailers of his herders, is talking about the future.
``We turn a lot of cash, but we don't see a dime,'' Raftopoulos says with slight exaggeration. Last year, the operation paid out more than $500,000 in interest payments alone. ``Isn't that sad? All that money goes to the bank.''
In any case, he plans to stay in ranching.
``It's something that's really hard to explain,'' he says. ``I like the way of life. It's a challenge every year. . . . Look at my corral! Isn't that a good lamb!''