Wool worth the wait: Recent spike in wool, lamb prices helps ranchers through tough economic times
March 19, 2011
Tom Kourlis has continued to run his father's sheep operation on the same ground it was founded on about 90 years ago.
But, a few years ago the legacy of lamb and wool production at the Harry Kourlis Ranch almost came to an end.
With slumping wool and lamb prices, the 60-year-old Kourlis started developing a "phase out plan" for the ranch 30 miles south of Craig. The business that had put his two girls through college and kept food on the table just wasn't profitable anymore, he said.
But, Kourlis stood by the business, and today he is glad he did.
"Because the market prices have turned, it has given us the opportunity to stay in business," he said. "Our future seems brighter than it did a few years back and it continues to allow us to be a viable contributor to the local economies."
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The reason Kourlis was able to stay in business, he said, stems from recent price increases in wool and lamb. He said in the last year, prices for both have increased anywhere from 30 to 70 percent.
"I tell you what, it has made me optimistic," he said. "It has given me the opportunity in saying, 'Yeah, there is a tomorrow and things are going to be OK.'"
Wool sales had a national average of $2.09 per pound in February 2010, which increased to $2.41 per pound last month, according to statistics from the U.S. Department of Agriculture compiled by regional economist Scott Ford.
From 1997 to 2007, wool production in Moffat County increased.
In 1997, 54 ranchers in Moffat County produced 210,485 pounds of wool, accounting for only 6.6 percent of the state's production, according to statistics.
In 2007, however, 42 ranchers in Moffat County produced 359,264 pounds of wool, accounting for 12.3 percent of the state's production.
Statewide production of wool did not follow the same pattern, however, slipping from 3.1 million pounds in 1997 to 2.9 million pounds in 2007.
Estimates place Moffat County in the 325,000-pound range for wool production last year, Ford said.
Moffat County resident Melody Villard said she and her husband own about 1,300 head of breeding ewes on the Villard Ranch.
Shearing their sheep and selling the wool is more of a necessity than a primary income source, she said.
"Some years, we have paid the shearer more than we have gotten for the wool," she said. "So, we definitely appreciate those higher prices and we can sell the wool, pay the cost to get it sheared and have a little left over."
Prices are usually better to sell the lambs for meat, Villard said, noting few ranchers hold out for better wool prices after the spring shear.
"We gamble enough every day and I don't know that a lot of people would gamble that the market next spring would be as good as it is this fall," she said. "A lot of us get one check a year. We work all year and get paid once a year, and that payment comes when we ship the lambs."
Moffat County resident Nick Maneotis said the increase in wool prices helps offset other costs associated with the sheep business — gas, corn and hay.
Maneotis said the near record wool and lamb prices are "definitely good news."
"We are not making a bunch of extra money, now," he said. "But, it is helping to offset the rise of all the other costs also. It is not like we are getting rich quick on it."
Maneotis helps his father with High Country Lamb and runs his own ranch. He said the ups and downs of wool and lamb prices usually come in a cycle, something he's grown used to.
"From all of the forecasts … looking at sheep numbers and everything, it looks like the market should be good for another year, two years. And then as numbers go back up, we could see a correction in these prices," he said. "But, you just have to take the good with the bad.
"On good years like this, you just try to pay down debt and save as much as you can to be prepared for the lean years to come again."
Kourlis said there could be two primary reasons for the high wool prices, the first of which has to do with the currency exchange between Australia and the U.S.
Changes in the exchange have favored American producers, he said. But, there is also a decrease in the worldwide supply of wool, he said.
"People have just got out of the business," he said. "They just couldn't make any money so they said, 'To hell with this, we are not losing any more money.'"
"If we keep losing money enough years, we get the picture," he said with a laugh, noting the "stubborn" nature of sheep ranchers.
Moffat County has had a long history with the sheep industry.
In the 1950s, Craig was the world's largest wool shipping point, Kourlis said, but production has significantly declined since.
He said if prices continue to rise and make the business more profitable, the industry could grow. But most likely, the number of sheep in production on established ranches would either grow or stabilize to meet demand.
"It's very difficult to put together these ranches in a way that is competitive or economically viable because it takes generations to put them together in a way that they are efficient," he said, noting his father only paid 50 cents an acre for his land.
"If anyone was to come in and buy that, there is no way they could put a sheep on it and make a living," he said.
Maneotis said that fact could present problems for the industry's future.
He said neither of his two daughters has taken a particular interest in running the family ranch.
"It seems like all of the big ranchers are on the older side of the age spectrum," he said. "I guess it is just a tough way to make a living, and a lot of the younger kids have shied away from that and tried to go out and do other jobs and make a living that way."
Kourlis said his son, who is in the eighth grade, has taken an interest in the ranching business. But, Kourlis is cautious about the prospect.
Despite the current high prices, it's always been a tough lifestyle, he said.
"He likes the ranching side and the dialogue that we have had is that, 'Once you get out of school, you do a good job, get a good education and 10 years from now. let's see what this is like,'" Kourlis said. "But, if it doesn't improve notably, I'm not sure why you would want to stay in this business."