2016 Australian lamb supply forecasts revised higher
11 April 2016
A greater number of breeding ewes on hand has led to 2016 lamb production estimates being revised higher, according to Meat & Livestock Australia’s (MLA) Sheep Industry projections quarterly update, released today.
MLA’s Manager of Market Information, Ben Thomas, said overall supply-side forecasts had been adjusted higher following the recent national Wool and Sheepmeat survey. The survey showed that the total number of breeding ewes had increased 3 per cent on this time last year to 42 million head – leading to an upward revision in slaughter, production and exports for 2016 and 2017.
“There has been a fast start to the year, with lamb slaughter revised 3 per cent higher from December’s forecast to 22 million head, but still 3 per cent below the 2015 record,” Mr Thomas said.
In terms of production, national lamb carcase weights have held up surprisingly well, despite the hot and dry conditions endured by most over the summer months. However, this is expected to be challenged over the coming winter months, especially if there is no respite in the key lamb producing regions.
Lamb production is now forecast to decline 3 per cent year-on-year in 2016, to 488,400 tonnes cwt.
Australian lamb exports are forecast to remain on par with the previous two years at 235,000 tonnes swt, before gradually growing in line with production to 280,000 tonnes swt, 60 per cent of lamb meat production, by 2020.
Across the markets, lamb sales to the US in the lead up to Easter were buoyant, but it is unclear how demand will hold up through spring into early summer. While lamb shipments to China have been slightly ahead of year-ago levels, mutton has lagged as a result of the high stocks in the market.
Mr Thomas said in terms of trade lamb prices there may be some upward potential during the autumn months, with export values sitting an average of $1.75 above the national trade lamb indicator.
“There are also signs of easing competitive pressure from New Zealand production as the season progresses,” he said.
“However, this seasonal rise will be tested by the Australian dollar, which has been trending dearer over the past few months. An Australian dollar on or above 75 US cents instead of below 70 US cents will take some shine off export prices.
“Additionally, if continuing hot and dry conditions persist, prices will be tested.”
View the quarterly update video below and read the full report here.
