After last year’s lamb market collapse around the biggest sales period of the year, producers are optimistic retail prices will hold steady and market prices will climb this year. But the status of restaurants reopening across the country presents a big question for a protein commonly consumed away from home.

Passover began Saturday and Easter is this Sunday. Sales around the two holidays typically represent 12-14% of total annual lamb retail sales, according to Megan Wortman, executive director of the American Lamb Board.

Lamb retail sales for the four-week period ending April 21, 2020, were 6.9 million pounds, up from 6.6 million pounds for the same four weeks in 2019, Wortman said, citing data from Information Resources Inc. But while retail sales were slightly higher, restaurant and foodservice sales all but disappeared overnight.

Peter Orwick, executive director of the American Sheep Industry Association (ASI), said the stage was set for a record year in 2020, but now, the industry is working to recover from the setback caused by COVID-19.

“We had market lamb prices at the best levels in a number of years,” he told Agri-Pulse.

Since August 2020, year-over-year weekly slaughter has averaged about 5% lower according to the Livestock Marketing Information Center, a reduction that equals roughly 2,000 head per week. LMIC noted that since the start of 2021, "weekly slaughter is averaging about 2% (around 1,000 head) below the same period last year." 

The COVID-19 pandemic and the restaurant shutdowns that followed, devastated the lamb industry; Orwick said restaurants typically represent about half of all lamb consumption.  

“It really was a double whammy of timing, hitting right at Easter, Passover, Ramadan and then having essentially lost one half of our customers,” Orwick added.

Orwick noted the processing companies were the first to feel impacts.

“They were called that week in March and [told], ‘if you haven’t loaded the truck, don’t load.’ There were trucks turned away who had lamb destined for customers,” he said.

The nation’s second-largest lamb processing and fabrication company in the U.S., Mountain States Rosen, filed for Chapter 11 bankruptcy March 19, 2020. The company was owned by Mountain States Lamb Cooperative, which was composed of about 145 lamb producers across the western U.S.  JBS USA acquired the facility and certain assets during the bankruptcy auction and plans to convert it to a value-added beef processing operation, an action which prompted Sen. Mike Lee and several Western Senators to express concerns about “harmful competition” to the Dept. of Justice.

Peter Orwick

Peter Orwick, ASIA.

But Orwick said a couple of families in Colorado opened a “state of the art” processing plant last September, and another Colorado family opened a plant in January 2021 in San Angelo, Texas, which helped make up for the loss of capacity at MSR.

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While 2020 may have been hard on the industry, things are starting to look up. Sales are improving, but sheep producers hope more restaurants reopen and retail sales stay strong.

Over the last year, the National Restaurant Association has tracked people eating at restaurants each week. From February to mid-March of 2020, 59% of adults went out for dinner each week at sit-down restaurants; that number dropped below 20% during the lockdown, according to NRA.

The number slowly increased to 35% during the summer and fall and was approaching 37% as spring approached, the association said.

Before the pandemic, Wortman said the lamb industry was thriving in fine-dining segments and venues such as cruise ships.

“It’s going to be a harder recovery, and we’ve seen the devastation of so many fine-dining restaurants closing for good,” Wortman noted. “It’s really going to put more pressure on our industry to get innovative about finding new customers in the foodservice segment.”

New market opportunities for lamb include places like “fast-casual” restaurants or university dining systems, she said.

Moving forward, Wortman also thinks consumers are willing to spend more time learning how to cook higher-end protein meals than before the COVID-19 pandemic, and hopes lamb could be worked into some family meal rotations.

“When you’ve not been able to dine out and spend your dollars with fine dining, I think consumer willingness to spend a little bit more on some really high-quality proteins and experiment and try new things has increased,” she said.

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