990276 Sheep Growers Want to Stop Imports

Washington - Basking in a trade commission ruling that increased lamb meat imports are harming U.S. producers, the American sheep industry this week will recommend increased tariffs to stave off the import surge.

The U.S. International Trade Commission ruled unanimously this month for a petition by the sheep farmers that cheap lamb imports have hurt their industry.

On Thursday, the U.S. industry will appear before the commission to offer its recommended remedy, massively higher import tariffs. Officials from Australia and New Zealand, where 95% of the foreign lamb originates, also are expected to make suggestions.

The commission will then make its recommendations to President Clinton, who has final authority.

“The imports came, and the prices just crashed,” said Lorin Moench Jr., president of the American Sheep Industry Association and a Salt Lake City sheep farmer. “This window of opportunity will help us get back in (the market).”

The industry has complained that tariffs currently assessed on imports are much too low -- less than 1%. The sheepherders are requesting a four-year period of a 30% tariff on imports up to 40 million pounds, increasing to 50% for imports over 40 million pounds.

Essentially, the proposal would make those who import more pay more.

U.S. sheep growers said the remedy will give them an opportunity to recover after facing an onslaught of imports.

“The provision of relief for the full four-year period is essential to give the U.S. industry an adequate amount of time to implement initiatives ... that will ultimately enable it to compete more effectively with imports,” attorneys for the American sheep industry wrote in a brief to the ITC last week.

Sheep producers said that during the first nine months of last year, 76.9 million pounds of imports entered the United States -- 19% more than the first nine months of 1997. Imports now comprise almost one-third of the domestic market.

Imports from Australia and New Zealand consistently undersold the U.S. product, officials said, particularly loins and racks, the largest revenue- generating products for domestic producers.

In the time since the import surge started, producers said they watched prices drop from $1 a pound to 65 cents a pound.

Prices paid to American producers fell during the 1998 Easter-Passover season, the market's traditional peak, and reached a four-year low of 60 cents a pound for slaughter lambs, the industry said.

Sheep producers said the import increase came at a particularly bad time -- when farmers were just beginning to recover and adjust after losing years of government subsidies in 1995.

“It wrecks our markets,” said Cindy Siddoway, a Terraton, Idaho, sheep producer who also serves as vice president of the sheep association. “It's just really hard to do any long term planning, to make some of the changes we want to make.”

The problems of low prices and imports are hitting the entire U.S. livestock industry.

Pork producers, stuck with their lowest prices in four decades, have accused Canadian farmers of sending their hogs across the border to use up slaughter capacity and help drive down prices. A group of cattlemen recently won a round in a petition to the ITC that they were being hurt by imports of live Canadian cattle. Some cattlemen also have complained about imports from Mexico.

“We've had producers and we've had whole states contemplate trade actions against Canada,” said Nick Giordano, international trade counsel for the National Pork Producers Council. “Right now no, we're not on the precipice of filing, but it is something that producers are considering.”

Chuck Lambert, an economist, with the National Cattlemen's Beef Association, said the organization was watching the lamb proceeding “fairly closely.”

“Cases like this are very much a watermark case,” Lambert said.

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