SEVERANCE – John Bartmann is facing some of the toughest times he's seen in sheep ranching.

A sheep rancher near Severance in Weld County, Bartmann has cut his flock of 2,000 by a third while losing more than $80 for every lamb he sells.

"It's something like a perfect storm to get us where we are today," Bartmann said. "What the drought did is it exaggerated things."

Beyond drought, consolidation of the sheep-packing business, increased feed costs and plummeting lamb prices have created hardship among sheep ranchers across Northern Colorado. The situation has deteriorated so much for ranchers that the federal government is investigating whether meat packers have played a role in the market's collapse.

Ranchers enjoyed a bountiful 2011 when lamb prices soared above $2 per pound. But Bartmann said he can fetch only 85 cents per pound these days, while raising a lamb costs him more than $1.30 per pound.

Sheep ranching represents a small slice of the livestock industry in Northern Colorado. Beef and dairy cattle get the most attention, with 550,000 cattle in Weld County alone.

But every segment of the livestock industry has suffered a similar struggle lately: the rise and