Peter Duggan, Strategic Information Services, Bord Bia
Australian lamb producers are in for another year of high returns according to the MLA’S
mid-year update on Australia Sheepmeat Industry, reflecting lower feed costs, tight domestic and global supplies coupled with strong export and domestic demand.
Lamb production is set to fall by 1% for 2010 to 428,000 tonnes (cwe). An increase in carcase weights of 3% to 21.3kg/head should largely offset a 4% decline in lamb supplies. Lamb supplies are forecast to fall as better seasonal conditions and returns are expected to result in producers holding onto ewe lambs for stock rebuilding. Evidence of this is borne out by the results of the latest MLA lamb survey conducted in June. Around 43% of the survey respondents intend to increase their breeding ewe flock size during 2011. This large increase is based on 59% of the survey respondents indicating that net returns to lamb production had increased on the previous year, whilst 66% of respondents indicated that seasonal conditions were also better compared to the previous year.
Lamb exports for 2010 are expected to fall by 4% to 158,000 tonnes (pw) reflecting lower output, strong domestic demand, record lamb prices and the 20% year on year increase in the A$. Exports to Australia’s key market, the United States are expected to fall by 5% to 36,500 tonnes (pw). However, in a report compiled by the USDA, they expect American lamb imports to increase by 10% in 2011. This is based on the American 2010 lamb crop falling by 2% to 3.6 million head, with breeding numbers back by 3% to 3.37 million head.
Domestic demand is expected to strengthen, with Australian lamb consumption forecast to increase marginally to 240,000 tonnes (cwe) in 2010, despite higher retail lamb prices.