ST. LOUIS, Mo. — Total sheep and lamb inventory in Kentucky and Indiana increased by 15 percent between 2011 and 2012, according to the USDA National Agricultural Statistics Service’s Sheep and Goats report released in late January.

Increases in both states were due to increasing breeding sheep numbers. Sheep and lamb inventory in the United States totaled 5.35 million head on Jan. 1, 2012, down 2 percent from 2011. Much of the decline in U.S. sheep and lamb numbers occurred as drought-stricken Texas producers heavily culled flocks in 2011.

Total sheep numbers in Texas declined by 24 percent for the year. While many Texas sheep were slaughtered, some found their way to the Midwest.

“We saw some truckloads of ewes out of Texas come to Indiana last year,” said Mike Neary, Purdue University extension sheep specialist. “A truckload might have between 360 to 450, and four or five producers would split up those animals to add to their flocks.”

Retention of ewe lambs also contributed to Indiana’s increase, said Neary. The Indiana sheep breeding flock increased from 44,000 to 48,000 in 2011. Indiana market lamb inventory increased from 6,000 to 7,000, according to the USDA report.

Exceptional lamb prices in 2011 spurred expansion. “The sheep industry was very profitable in pretty much all its sectors last year,” said Neary. “Prices were high enough to offset higher input costs, and adequate rainfall in most areas (of Indiana) kept adequate forage in the state.”

Growth of ethnic lamb and direct markets, added Neary, has been important to the Indiana sheep industry’s growth. “Some entities have specialized in ethnic lambs, targeted at the Indianapolis and Chicago markets,” he said.

Market lambs from Indiana in the 120- to 130-pound range are often shipped to a Detroit packer. Multiple market channels give Indiana sheep producers continued expansion prospects, dependent upon lamb price trends.

“There’s lots of potential for sheep operations whether small, mid-sized or large,” said Neary.

Kentucky breeding sheep numbers showed the highest percentage increase of any state. Total breeding sheep in Kentucky increased 21 percent, from 28,000 to 34,000. Kentucky market lamb inventory was steady, at 6,000 lambs, as of Jan. 1.

The increase in Kentucky’s breeding flock came as no surprise to Jim Mansfield, secretary of the Kentucky Sheep and Wool Producers Assoc. “I get several calls for breeding stock every week,” said Mansfield, who raises Katahdin hair sheep at Four Hills Farm in Salvisa.

Mansfield said interest in sheep breeding stock purchases in Kentucky ranges from smaller-scale hobby farm producers to larger-scale cow-calf producers interested in adding another species. Sheep have also generated interest from many Mennonite and Amish farmers that have more recently moved into Kentucky, he said.

Traditional-weight Kentucky market lambs are often shipped live to East Coast markets, especially the prominent New Holland, Pa., lamb market, said Mansfield. Eastern U.S. lamb prices have been especially strong, with the East Coast carcass value reaching an all-time high in December, according to an article published by the American Sheep Industry Assoc. Market lamb forecasts indicate strong prices continuing into the key Easter market season.

Sheep and lamb numbers were also up in Michigan (7 percent) and Illinois (2 percent) while remaining steady in Tennessee and declining slightly in Ohio (2 percent). Changes in Ohio and Michigan came from changes in market lamb inventories between Jan. 1, 2011, and Jan. 1, 2012, rather than increases in the number of breeding animals.