A MARTÍNEZ, HOST:
President Trump's trade wars have made it harder for agricultural producers to turn a profit. It's raised the cost of imported fertilizers and disrupted the markets abroad where they sell. But as Rae Solomon from member station KUNC reports, the sheep industry is cautiously optimistic.
(SOUNDBITE OF SHEEP BLEATING)
RAE SOLOMON, BYLINE: Lorrae Moon geeks out over sheep more than most.
LORRAE MOON: I love them so much. I just kept buying sheep. So I'm in a sheep buyers anonymous program (laughter).
SOLOMON: These days, she keeps the herd to a modest 80 head spread across the family ranch on the outskirts of Craig, Colorado.
(SOUNDBITE OF MACHINERY WHIRRING)
SOLOMON: She's also got a wool mill packed with machinery that combs and spins raw fleece, shorn right off the sheep into soft, finger-pleasing yarn. From birthing the lambs to attaching labels on the yarn, she does it all.
MOON: We kind of base this whole company on doing what we could do right here close.
SOLOMON: Her business doesn't really touch international markets at all. Even so, when Trump unveiled his sweeping 10% tariffs on foreign trade last month, she perked up.
MOON: I feel like it's an upswing for us.
SOLOMON: Sheep producers are excited about the tariffs. The American Sheep Industry Association says the U.S. sheep industry is worth $5.1 billion but has been in decline for decades. Cheaper imports from Australia, New Zealand, are now three-quarters of the market. Mike Harper owns one of the country's largest sheep feed lots in Eaton, Colorado. He says at this point, American lamb is considered a premium product. The problem is that it looks too expensive to U.S. consumers used to cheap, foreign imports.
MIKE HARPER: They're undercutting us pretty substantially in pricing, the imports are.
SOLOMON: The industry endorsed the tariffs on Australia and New Zealand, calling the 10% tax a good first step towards leveling the playing field for American producers. Harper says he's all for pricier imports, but these 10% tariffs aren't the ones he was hoping for.
HARPER: It's probably not enough to make us competitive. If they'd come out at 25 or 30%, I think that would have been impactful.
SOLOMON: Harper says he's also worried about a bigger front in the current trade wars - China. He used to send his sheepskins there for processing. With the constantly changing tariff situation, he's not sure what he's going to do.
HARPER: I mean, we can't just flip the switch and start doing it all here domestically. We're not set up for it.
SOLOMON: But the outlook could be rosier down the line, according to Colorado State University Ag economist Dawn Thilmany.
DAWN THILMANY: If Australia and New Zealand wool and lamb look more expensive, you might actually see the supply of American sheep producers go up.
SOLOMON: She says the laws of supply and demand tell us that if American sheep production ramps up, domestic prices would come down, possibly even enough to outcompete the imports. But...
DAWN THILMANY: Given it takes a while to raise a lamb into a marketable sheep, you're probably talking at least a two to three-year lag.
SOLOMON: And even then, Thilmany says sheep are just a tiny part of a massive economy rocked by tariffs.
DAWN THILMANY: It's an industry that's maybe 5% the size of the cattle industry, so sheep will see a relatively better day. It's just not going to be nearly enough to offset the shocks to all the other parts of the ag sector.
SOLOMON: The biggest winners in these trade wars might just be the smallest, most locally oriented producers, like Lorrae Moon in her artisan wool mill. The way she sees it, the tariffs are changing the very conversation around consumption in her favor.
MOON: People are saying, well, I might buy less yarn, but I'm going to buy a really good one, and I'm going to know the farmer, and I'm going to know its story.
SOLOMON: Which means her sheep obsession could finally pay off in the marketplace.
For NPR News, I'm Rae Solomon in Craig, Colorado. Transcript provided by NPR, Copyright NPR.
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