Higher carcase weights and improved marketing of lamb products, coupled with New Zealand’s dwindling sheep herd mean Australian lamb producers can feel bullish – not sheepish – about the next few years, said Meat & Livestock Australia (MLA).
“Over the past five years, lamb marking rates and the ability to produce an early finishing lamb have steadily improved and this continued in 2015 despite many producers facing unfavourable winter and spring conditions,” said MLA’s manager of market information Ben Thomas.
He added: “Despite the dry season, average carcase weights increased 1.5%, a trend partially attributed to the change in composition of the sheep and lamb flock.”
Data published by MLA – which provides research and marketing services for Australia’s cattle, sheep and goat sectors respectively – said the country would see a 3.4% drop in lambs slaughtered in 2016. This dip was attributed to a short reduction in ewe breeding, but was expected to rise back up to normal breeding levels in 2017.
Even though the total number of lambs slaughtered in 2016 was predicted to be lower, the heavier carcase weight was expected to carry production through into 2017, where slaughter rates – just like breed rates – would return to normal.
The increase in carcase weights of lamb and sheep has been driven by producers moving away from the Merino-based flocks of the 1980s, to composite breeds that yield more meat. This is likely to “further boost carcase weights in the future”, added Thomas.
“Prices have been helped by the low Australian dollar and a weaker performance from our major competitor New Zealand, where sheep numbers have reached a 60-year low as they the transition into dairying,” he added.
The performance of Australian lamb in 2016 would still be very much dependent on the demand coming from its international trade partners – namely the US and the Middle East – he said.
Influential export markets
MLA believes these wealthy customers will be the most “influential export markets” with trade “expected to build further on the 2015 levels”.
Exports for Australian lamb were forecast to be the third highest on record in 2016, with approximately 230,000 tonnes (t) expected to be shipped abroad, the MLA said.
“Demand from the US, comfortably our largest export market, is expected to keep growing, while we’re likely to see a slight drop in demand from China due to its higher domestic production,” added Thomas.
Export business in smaller markets, such as the EU and Japan, is expected to be stable throughout 2016, with a positive outlook for 2016 predicted overall.