Sheep Farming in the United States (NAICS 112410)

A Histometrics industry primer for public-market and private investors.

The North American Industry Classification System (NAICS) code 112410 covers U.S. establishments primarily engaged in raising sheep and lambs, feeding lambs for fattening, and producing wool.[3]

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1. Overview

Sheep farming is one of the smallest and most fragmented livestock businesses in the United States. It generates two products: meat (lamb and mutton) and wool. Meat now pays the bills; wool, once the main revenue source, has faded to a minor byproduct for most operations.[3] The national flock is small — about 4.99 million head at the start of 2026, down from a peak above 51 million in the 1880s — and imports from Australia and New Zealand supply the majority of the lamb Americans eat.[2][3]

The economics are those of a commodity producer: owners make money on the spread between lamb (and wool) prices and the cost of feed, land, labor, and predator losses. Returns are cyclical and thin, and — as in most of U.S. agriculture — a large share of an owner's total return comes from land appreciation rather than operating profit. After a decade of decline, lamb prices reached record highs in 2025–2026, sharply improving producer economics.[9]

There is essentially no pure-play, publicly traded U.S. sheep-farming company. The largest domestic player, Superior Farms, is employee-owned and private.[7] Public-market investors get only tangential exposure (diversified protein companies, farmland real-estate vehicles, farm-supply retail, agriculture funds). This is overwhelmingly a private-ownership industry: tens of thousands of family farms and ranches, most of them very small.

Editorial judgment. The best opportunities are asset-level businesses with scarce grazing access, reliable processor relationships, differentiated products, or additional grazing-service revenue — not a bet on broad U.S. livestock growth.

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2. What it is and how it's structured

Scope (included in 112410): raising sheep and lambs; lamb feedlots (feeding for fattening); and producing wool.[1][3] Specialty sheep-milk dairies are a small niche within the code.

What it excludes (adjacent NAICS codes):

• 112420 Goat Farming — goats, goat milk, and mohair (mohair comes from goats, not sheep).
• 311611 Animal (except poultry) Slaughtering — lamb slaughter and meatpacking. A processor like Superior Farms sits here, not in 112410.[7]
• 313 (textile mills) / wool scouring and top-making — turning raw wool into yarn and fabric.
• 112990 All Other Animal Production — other niche livestock.

Two operating models.

• Stock-sheep (range) production in the West (Texas, California, Colorado, Wyoming, Utah) runs large bands of breeding ewes and rams across vast acreage, frequently on public-land grazing permits from the Bureau of Land Management (BLM) and U.S. Forest Service, and relies heavily on imported foreign herders under the H-2A agricultural visa program. Texas is the largest sheep-producing state, followed by California.[3][11]
• Lamb feeding (feedlots) buys feeder lambs — which the USDA Economic Research Service (ERS) describes as reaching roughly 60–80 pounds — then adds forage and grain to finish them for slaughter.[3]
• Farm-flock operations in the Midwest and East keep small flocks on pasture, often as a secondary or lifestyle enterprise.

Extreme fragmentation. In the 2017 Census of Agriculture, of ~101,000 farms with sheep, 69.5% had fewer than 25 head and 93.3% had fewer than 100 head; only 6.7% held 100 or more.[5] Tiny hobby and part-time flocks dominate the count, while a small number of large Western ranches and feedlots hold most of the commercial inventory. Ownership is overwhelmingly private family sole proprietorships, partnerships, and LLCs — not corporations.[4]

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3. How big it is

A note on the federal numbers. Standard federal business statistics do not cover farm production. Census County Business Patterns (CBP) and Statistics of U.S. Businesses (SUSB) explicitly exclude crop and animal production, and the Census Nonemployer series does too; the employer series also omit self-employed operators and businesses without employees.[19] Our ingested federal business dataset for NAICS 112410 therefore contains a single figure: the U.S. Small Business Administration (SBA) size standard of $3.5 million in average annual receipts — the ceiling (including affiliates and subsidiaries) below which a sheep operation counts as a "small business" for federal programs.[1] Establishment, firm, employment, payroll, and receipts figures are absent from that dataset — expected, because the authoritative census of this industry is the USDA Census of Agriculture, not the Economic Census. The operating figures below come from the U.S. Department of Agriculture (USDA).

• National flock: 4.99 million head of all sheep and lambs on January 1, 2026 — 3.61 million breeding sheep and 1.38 million market sheep and lambs — down slightly from 5.05 million a year earlier, continuing a long decline.[2]
• Operations: fewer than 89,000 farms with sheep in the 2022 Census of Agriculture, down from ~101,000 in 2017 (ERS notes methodology changes increased the capture of very small operations).[3][4]
• Lamb crop (2025): 3.03 million lambs, a lambing rate of about 105 lambs per 100 breeding ewes.[2]
• Wool (2025): 20.5 million pounds shorn, valued at about $28.7 million — down from 22.5 million pounds worth $32.1 million in 2024.[2]
• Slaughter (2024): 1.79 million head of federally inspected lamb and yearling slaughter, up 3.8%.[9]
• Scale in context: sheep account for less than 1% of total U.S. livestock cash receipts.[3] An industry economic-contribution study (2021 data) estimated the production sector at roughly $1.4 billion in total economic output and the processing and manufacturing sector at about $3.7 billion — economy-wide "output" estimates, not farm-gate cash receipts (a precise cash-receipts figure is not in our federal dataset).[10]

Undercount caveat. Because most sheep are kept in very small or non-commercial flocks, and because farm production falls outside conventional business statistics, any "industry size" based on business registrations badly understates activity while overstating how commercial the average operation is. Treat the USDA head counts and operation counts as ground truth.

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4. The investable universe

There is no direct, pure-play public equity in U.S. sheep farming. Every listed route below is indirect. Tickers reference the New York Stock Exchange (NYSE), Nasdaq, Australia's ASX, and Brazil's B3.

Public companies (all indirect)

No listed company reviewed reports a separately identifiable, material U.S. sheep-farming segment.

Major private owners and operators

• Superior Farms — the largest U.S. lamb processor and marketer; 100% employee-owned via an Employee Stock Ownership Plan (ESOP), roughly 400 employee-owners, founded 1964. It handles about one-third of USDA-inspected lamb, works with more than 1,000 American family ranchers, and markets halal-certified, case-ready branded lamb.[7]
• Lava Lake Land & Livestock / Lava Lake Lamb — privately owned Idaho operation raising sheep and cattle and marketing grass-fed lamb.[19]
• Silicon Ranch — private solar developer running a company-owned flock for vegetation management at a large agrivoltaics project; an adjacent, service-model example of solar grazing.[20]
• Regional processors — Colorado Lamb Processors opened new slaughter capacity after the 2020 exit of Mountain States Rosen, a major Western packer.
• Family ranches and farm entities — the majority of the producer base; the federal data provide no reliable sheep-specific ownership breakdown.[3][4]

Note: the two biggest New Zealand sheepmeat processors, Alliance Group and Silver Fern Farms, are farmer cooperatives / private, not listed pure-plays. The American Lamb Board (a USDA-overseen checkoff) funds generic "American Lamb" promotion but is not investable. Private-market routes — direct farm/ranch ownership, farmland crowdfunding (AcreTrader, FarmTogether, mostly cropland), and solar-grazing ventures — are covered in Section 10.[20]

Bottom line: to get equity exposure to this specific industry, you buy or back a private operation. Listed securities offer only diffuse, tangential exposure.

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5. How the money works

The core equation for a sheep operation is:

Marketable lambs per breeding ewe × realized lamb price − annual cost per breeding ewe

Revenue stacks up, in rough order of importance today:

1. Lamb and mutton meat — the dominant income source. Producers sell feeder lambs (young animals sold to feedlots for finishing) or finished slaughter lambs. Most sheep meat is sold as lamb from animals younger than ~14 months; older animals yield mutton, which has lower consumer appeal.[3]
2. Wool — a secondary commodity priced off the global (largely Australian) market. For many U.S. flocks the wool check barely covers shearing; fine Merino-type wool earns a premium, coarse carpet wool much less.[3]
3. Breeding-stock sales, cull ewes and rams, pelts/hides, offal, and — for a few — sheep milk for artisan cheese.
4. Grazing-services income — a genuinely new and growing line: renting flocks to control vegetation under solar arrays ("solar grazing") and to reduce wildfire fuel.[20]

Unit economics. The single biggest lever on profitability is the lambing/weaning rate (lambs raised per 100 ewes — the U.S. average ran about 105 in 2025, with well-managed flocks well above that), because the ewe's annual upkeep cost is largely fixed.[2] Operators also watch sale weight and carcass quality, feed cost per head and days on feed, pasture carrying capacity and land rent, mortality/predator loss, net wool value, freight and shearing, processor access, and realized price versus USDA market references.

Cost structure. Feed and hay, pasture or public-land grazing fees (charged per animal-unit-month, AUM), labor (dominated by H-2A herder wages on Western ranches), shearing, veterinary and scrapie-program compliance, and predator losses — a real, quantifiable cost line unique to this industry.[8][11] In 2025 USDA reported roughly 185,000 adult sheep and 360,000 lambs lost to death during the year.[2]

Cyclicality. Lamb is a small, thinly traded market, so prices swing hard on modest supply changes and on the flow of imports. National choice/prime slaughter lamb averaged about $174 per hundredweight (cwt) in 2024; by April 2026, negotiated live slaughter lamb averaged $262.40/cwt — up 53% year over year — as tight domestic supply met steady demand.[9] Margins are also exposed to biological timing: breeding cannot quickly raise supply, and finished lambs cannot be held indefinitely, so feed, hay, labor, freight, land, and interest costs can rise before selling prices adjust.

The honest framing. Operating margins are thin and volatile, and the flock rebuilds slowly. As with most U.S. farm sectors, a meaningful part of an owner's long-run return is land appreciation plus lifestyle value, not the sheep enterprise's operating cash flow.

Government support cushions the downside: Farm Bill wool marketing loan / loan-deficiency payments, subsidized federal predator-control services, and disaster programs (Livestock Indemnity, Emergency Assistance for Livestock).[10]

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6. What drives demand

Lamb meat. U.S. per-capita lamb and mutton consumption has fallen from nearly 5 pounds in the 1960s to about 1 pound today, and it is concentrated — demographically among immigrant, Hispanic, Middle Eastern, Caribbean, African, and observant Muslim, Jewish, and Christian consumers, and geographically on the coasts (the Northeast and West Coast metros are the major markets).[3] Demand spikes around religious holidays (Easter, Passover, the two Eids) and in white-tablecloth and Mediterranean/Middle Eastern/South Asian foodservice. Because imports supply the majority of the market, domestic producers compete less on total demand than on freshness, local sourcing, premium positioning (grass-fed, organic, natural, antibiotic-free, halal-certified), and "American Lamb" branding against Australian and New Zealand frozen and chilled product.[3][6]

Wool. A global commodity tied to apparel and textile demand, especially performance/outdoor Merino and carpet wool. U.S. wool is largely exported for scouring and processing, so its price follows the Australian market and the dollar rather than domestic conditions. Weak wool receipts have pushed producers toward lamb, hair sheep, and grazing services — hair sheep and wool-hair crosses were 28% of the U.S. flock on January 1, 2026.[2][3]

Grazing services. Rising utility-scale solar buildout and wildfire-mitigation spending are creating fee-for-service demand for managed sheep grazing — a small but fast-growing new demand channel.[20]

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7. Regulation

• Meat inspection. The USDA Food Safety and Inspection Service (FSIS) administers the Federal Meat Inspection Act (FMIA): commercial sheep meat must be slaughtered under inspection, passed, labeled, and handled humanely (this bites at the adjacent processing stage).[14]
• Animal identification / disease. The USDA Animal and Plant Health Inspection Service (APHIS) runs the National Scrapie Eradication Program, mandating official ear-tag or other identification when sheep leave a flock (and for interstate movement) and requiring flock records; it has cut scrapie prevalence more than 99%.[12]
• Market transparency. The USDA Agricultural Marketing Service (AMS) administers Livestock Mandatory Reporting (LMR), requiring covered packers and importers to report certain lamb purchases and meat sales; the Packers and Stockyards Act governs packer payment and business practices.[13]
• Labor — the H-2A range-herder rule. Western ranches depend on foreign herders admitted under the H-2A agricultural visa, paid a monthly minimum (built on the federal $7.25/hour figure × an assumed ~208 hours, roughly $1,500/month base, adjusted annually) rather than an hourly rate. A 2024 Department of Labor final rule (effective June 28, 2024) tightened terms; enforcement of its new provisions was suspended in June 2025, leaving labor rules in flux.[8]
• Public-lands grazing. Grazing permits and per-AUM fees on BLM and Forest Service allotments (under the Taylor Grazing Act framework) govern much of the Western range flock; drought, wildfire, and market conditions can affect access.[15]
• Predator management. USDA Wildlife Services provides lethal and non-lethal predator control; the Endangered Species Act (ESA) constrains control of protected predators (wolves, grizzlies) — a recurring flashpoint.[16]
• Trade. Lamb imports are covered by LMR. Tariff and safeguard policy on Australian/New Zealand lamb periodically resurfaces (a U.S. lamb tariff-rate quota was challenged at the World Trade Organization in the early 2000s), and 2025 tariff moves reignited the debate.[6]
• State/local and land-use risk. Water rights, fencing, predator control, animal welfare, environmental permits, and custom-slaughter rules vary by state. In November 2024, Denver voters rejected Initiated Ordinance 309, which would have banned slaughterhouses and forced Superior Farms' Denver lamb plant to close — a reminder that municipal politics can threaten scarce processing capacity.[17]

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8. Competitive dynamics and consolidation

The industry is a barbell: an extremely fragmented production base (tens of thousands of mostly tiny flocks) feeding into a highly concentrated, capacity-constrained processing layer. Superior Farms alone handles roughly a third of USDA-inspected lamb, and its Denver plant processes close to a fifth of national lamb — including about 70% of Colorado ranchers' lambs.[7][17]

Consolidation has already reshaped processing. Mountain States Rosen, a major Western lamb packer, went bankrupt in 2020; JBS USA bought its Greeley, Colorado plant and repurposed it for beef and pork rather than lamb, while Colorado Lamb Processors opened new slaughter capacity. Too few plants means a single closure — commercial or political, as the Denver vote showed — can strand producers across a region.[17][18]

The defining domestic fact is import dominance: Australia (~75% of U.S. lamb imports) and New Zealand (~24%) together supply nearly all imported lamb and the majority of total U.S. supply, with lower costs and larger scale.[3][6] U.S. producers respond with local/fresh branding, direct-to-consumer sales, and checkoff-funded "American Lamb" marketing rather than head-to-head price competition.

Judgment. Further consolidation is most plausible in processing, case-ready products, branded lamb, and specialized distribution. Farm consolidation is slower — land, grazing permits, labor, biological reproduction, and local knowledge cap how quickly operators can scale. Superior Farms' network of 1,000+ rancher partners illustrates the alternative: a processor controlling standards, contracts, branding, and market access without owning every flock.[7]

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9. Risks

• Structural import competition. Imports already own the majority of the market; any strengthening of Australian/New Zealand supply or of the U.S. dollar pressures domestic prices, and imports set a ceiling on many domestic prices.[3][6]
• Low consumption growth. Lamb is a niche protein (~1 lb per capita) competing with cheaper, more familiar beef, pork, poultry, and lower-priced imported lamb; demand is concentrated in particular communities and metros.[3]
• Price volatility. Lamb is thinly traded; prices swing sharply, and the record 2025–2026 highs could reverse as supply and imports respond.[9]
• Processing bottleneck. Few USDA lamb plants; a closure can be regionally devastating and force longer freight routes, delayed sales, or weaker bargaining power.[17]
• Labor. Availability, cost, and regulatory uncertainty around H-2A herders directly hit Western range operations; shearing and remote-ranch labor are hard to staff.[8]
• Predators and ESA constraints. Coyotes accounted for 32.6% of sheep and 40.1% of lamb death losses in USDA's 2020 survey; limits on predator control raise losses.[16]
• Feed, forage, and public-land/water access. Drought, wildfire, hay prices, water availability, and grazing-policy shifts can compress margins.
• Disease and biological risk — scrapie, foot rot, ovine progressive pneumonia, bluetongue, parasites, and lamb mortality directly cut saleable output.[2][12]
• Wool weakness. Low, globally set wool prices offer little offset when meat prices fall.[3]
• Slow biological rebuild. The flock cannot expand quickly to capture high prices, capping the upside from any cycle.
• Public-market basis risk. A diversified protein stock responds mainly to beef, pork, poultry, currency, and debt conditions — not U.S. sheep economics.

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10. How to invest and the outlook

Public-market routes (all indirect). There is no listed pure-play. The nearest proxies are diversified protein names with tangential lamb exposure (JBS, PPC), the two farmland REITs (FPI, LAND) — real estate that is overwhelmingly cropland — farm-supply retail (TSCO) as a rural-lifestyle proxy, broad agriculture funds, and overseas ag names (ELD, GNC) tied to the Australia/New Zealand sheepmeat complex.[20] Reserve any discussion of share prices, dividend yields, and valuation multiples to these vehicles; none is a clean bet on U.S. sheep farming.

Private-market routes (where the real exposure is).

• Direct ownership of a flock, ranch, or feedlot — best understood as a farmland investment with a livestock enterprise attached.
• Breeding-flock acquisitions and lamb-feeding/finishing capacity.
• Processing and value-added — the scarce, concentrated packing layer and branded, halal, organic, grass-fed, or regional direct-to-consumer lamb and wool businesses.
• Farmland funds and crowdfunding (AcreTrader, FarmTogether) — mostly cropland, but the channel through which retail investors buy fractional farm exposure.[20]
• Private credit secured by livestock, equipment, or land.
• Solar-grazing / vegetation-management contracts — an emerging niche renting sheep under solar arrays and for wildfire mitigation.[20]

Due diligence should center on normalized cash flow after feed, labor, veterinary costs, mortality, freight, shearing, land rent, interest, and required capital improvements — plus close scrutiny of public-land permits, processor contracts, flock records, animal-health history, and realistic replacement values.

Near-term outlook. The dominant driver is the historic run-up in lamb prices into 2025–2026, which — after a long decline in flock size and revenue — has restored producer margins and could seed a modest flock rebuild.[9] USDA's May 2026 outlook, however, expects normalization: 2027 commercial lamb and mutton production of 132 million pounds with a slight rise in per-capita disappearance, and an average slaughter-lamb price of $252.50/cwt in 2027 (after a $247.42/cwt forecast for 2026) — well below the spring-2026 spot highs.[8] High current prices should not be capitalized as permanent.

Bottom line. Tight domestic supply meeting steady, demographically supported demand — plus any tariff action against imports and a genuinely new solar-grazing revenue stream — supports domestic prices. Against that, wool stays weak, labor and predator-control rules remain uncertain, and processing capacity is thin, so the upside is real but capped, and the long-run trajectory of small scale and heavy import dependence is unlikely to reverse. For most investors this remains a private, specialist, land-and-lifestyle industry rather than a liquid public opportunity — and the clearest way to evaluate it is asset-level underwriting of scarce grazing/processing access, disciplined flock productivity, and differentiated products.

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Sources

1. U.S. Small Business Administration, Table of Small Business Size Standards (NAICS 112410 = $3.5 million average annual receipts), 2023. https://www.sba.gov/document/support-table-size-standards
2. USDA National Agricultural Statistics Service, Sheep and Goats (January 2026), 2026. https://www.nass.usda.gov/Publications/Todays_Reports/reports/shep0126.pdf
3. USDA Economic Research Service, Sheep, Lamb & Mutton — Sector at a Glance, 2026. https://www.ers.usda.gov/topics/animal-products/sheep-lamb-mutton/sector-at-a-glance
4. USDA National Agricultural Statistics Service, 2022 Census of Agriculture, Volume 1, Chapter 1 (U.S. National Level Data), 2024. https://www.nass.usda.gov/Publications/AgCensus/2022/Full_Report/Volume_1,_Chapter_1_US/usv1.pdf
5. USDA Economic Research Service / 2017 Census of Agriculture, flock-size distribution of U.S. sheep operations, 2019. https://ers.usda.gov/sites/default/files/_laserfiche/publications/42007/50883_aib591d.pdf
6. American Sheep Industry Association, Overview of Lamb and Mutton Imports, 2025. https://www.sheepusa.org/wp-content/uploads/2025/03/ASI-Trade-One-Pager-on-Lamb-and-Mutton-Imports-final.pdf
7. Superior Farms, Our Story / employee-ownership, processing scale, and halal certification, 2025. https://superiorfarms.com/our-story/
8. USDA Economic Research Service, Livestock, Dairy, and Poultry Outlook: May 2026, 2026. https://ers.usda.gov/sites/default/files/_laserfiche/outlooks/114167/LDP-M-383.pdf
9. Michigan State University Extension, Lamb prices start off strong in 2026 (citing USDA slaughter and price data), 2026. https://www.canr.msu.edu/news/lamb-prices-start-off-strong-in-2026
10. American Sheep Industry Association (D. Marsh), U.S. Sheep Industry Economic Contribution Analysis (2021 data), November 2023. https://www.sheepusa.org/wp-content/uploads/2024/02/U.S.-Sheep-Industry-Contribution-Analysis-Nov.-2023.pdf
11. U.S. Department of Labor, Employment and Training Administration, H-2A Herder Final Rule (Range Herding or Production of Livestock), 2024. https://www.dol.gov/agencies/eta/foreign-labor/programs/h-2a/herding
12. USDA Animal and Plant Health Inspection Service, National Scrapie Eradication Program / Scrapie Tag Resources, 2026. https://www.aphis.usda.gov/animal-disease/sheep-goat/scrapie-tag
13. USDA Agricultural Marketing Service, Livestock Mandatory Reporting and Packers and Stockyards Act, 2026. https://www.ams.usda.gov/rules-regulations/mmr/lmr
14. USDA Food Safety and Inspection Service, Inspection of Meat Products (Federal Meat Inspection Act), 2023. https://www.fsis.usda.gov/inspection/inspection-meat-products
15. Bureau of Land Management, Livestock Grazing, 2026. https://www.blm.gov/programs/natural-resources/rangelands-and-grazing/livestock-grazing
16. USDA APHIS Wildlife Services, FY2022 Program Data (Management Actions and Funding), 2023; and American Sheep Industry Association, Fast Fact: Predator Losses, 2026. https://www.aphis.usda.gov/news/program-update/usda-wildlife-services-posts-fiscal-year-2022-data-management-actions-funding
17. Colorado Sun, Ordinance 309 fails: Denver voters reject slaughterhouse ban, November 5, 2024. https://coloradosun.com/2024/11/05/denver-ordinance-309-result/
18. JBS N.V., SEC transition notice (Greeley plant repurposing), 2026, and Pilgrim's Pride Corporation, Form 10-K FY ended March 29, 2026 (JBS 82.2% ownership; UK/European lamb). https://www.sec.gov/Archives/edgar/data/802481/000080248126000030/ppc-20260329.htm
19. Lava Lake Lamb, Our Story, 2026, and U.S. Census Bureau, County Business Patterns / Nonemployer Statistics methodology (crop and animal production excluded), 2026. https://www.lavalakelamb.com/ourstory; https://www.census.gov/programs-surveys/cbp/technical-documentation/methodology.html
20. Silicon Ranch, Replicating Agrivoltaics in a Big Way (solar grazing), 2024; and WallStreetZen, Best Farmland REITs, ETFs and Stocks (Farmland Partners, Gladstone Land, AcreTrader, FarmTogether), 2025. https://www.siliconranch.com/stories/replicating-agrivoltaics-in-a-big-way/; https://www.wallstreetzen.com/blog/farmland-reit/