Wednesday, April 24, 2024

From baaa’d to good: year of extremes for lamb

Annual Australian lamb slaughter is now projected to be 22.9 million for 2018, up two per cent on 2017. Sheep slaughter is forecast to reach 9.3 million, up 23 per cent on 2017.

Meat & Livestock Australia’s (MLA) Market Intelligence Manager Scott Tolmie says it has been a year of extremes so far for the Australian lamb market. Prices are soaring into uncharted territory as strong demand meets tightening supply, he says.

Fierce competition

“Australian lamb prices have been rising strongly since April, breaking records as they smashed through the 700¢ and 800¢/kg carcase weight marks for the first time,” he said.

“Poor seasonal conditions and high feed costs have led to a waning supply of finished lambs as the year has progressed. This, combined with strong international demand, has resulted in fierce competition for a diminishing supply and driven up prices across the board.

“The dry conditions drove increased lamb slaughter for the first half of the year, spiking in the second quarter of 2018 as conditions worsened and producers looked to destock. This peaked in June with the highest month of lamb slaughter on record.

“Lamb slaughter has fallen in recent months due to the delay in new-season lambs entering the market.

“With no indication of improved seasonal conditions in the short-term, reports suggest there will be greater numbers of lightweight, unfinished new-season lambs coming onto the market this year. Many producers in drought-stricken NSW and northern Victoria face challenging feed conditions.

“The timing and quality of the new-season lamb crop will have a large impact on prices for the rest of 2018.”

Record exports

Mr Tolmie says strong global demand for Australian sheep meat have supported record export volumes and values.

“Lamb exports between January and August increased 12 per cent, to a record 183,000 tonnes shipped weight (swt),” he said. “Mutton shipments surged 25 per cent, to 105,000 tonnes swt.

“Furthermore, the unit value of Australian lamb exports for the year to July reached new record highs, at $8/kg. Mutton climbed to $5.88/kg for the same period.

“These factors saw the value of Australian sheep-meat exports last financial year hit new heights, at $3.29 billion, up 24 per cent year on year.

“Nonetheless the domestic market remains the single most valuable for the industry. Australians are the world’s largest consumers of lamb on a per-capita basis.”

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