November lamb exports reach highest volume in 25 months

Following a very wet start to spring across large parts of eastern Australia, which slowed lamb processing and therefore available product for export, drier weather during November has seen kill levels ramp up and export volumes surge.

Lamb shipments in November were the highest since October 2014, reaching 23,507 tonnes shipped weight (swt) – up 10% year-on-year, and up 26% on the five-year average for the month – with most major markets recording an increase. Chilled lamb exports in November increased 11%, to 8,833 tonnes swt, while frozen product rose 10%, to 14,674 tonnes swt. Lamb exports to the US  in November were the second highest monthly volume to the market on record – up 10% from year-ago levels, to 5,665 tonnes swt, with increased demand ahead of the Thanksgiving and New Year holiday periods. Reports suggest the earlier than usual Chinese New Year in 2017 has importers already building up stock levels, with export volumes in November up 48% compared to last year, at 4,013 tonnes swt.

For the year-to-date, 219,049 tonnes swt of lamb has left Australian shores – 2% more than the corresponding period last year, and 16% more than the five-year average. Chilled lamb shipments were marginally (1%) lower year-on-year, at 91,606 tonnes swt, while frozen exports lifted 4%, to 127,443 tonnes swt.

For the January to November period, the market share of the top three export destinations has shifted somewhat year-on-year.  The Middle East, Australia’s largest lamb export market (in volume terms), accounted for 26% of total shipments for the year-to-date, down from 29% last year. The proportion of total exports to the US rose from 21% in 2015, to 22% for the year-to-November 2016, while China’s market share has grown to 16% this year, up from 13% for the corresponding period last year.

Lamb exports to the Middle East for the year-to-date were down 10% year-on-year, to 57,031 tonnes swt. Lamb carcase volumes (39,148 tonnes swt) to the region declined 12%, while leg (6,651 tonnes swt) and shoulder (4,777 tonnes swt) shipments fell 3% and 11% year-on-year, respectively. The overall decline to the Middle East was largely attributed to a 92% year-on-year drop in exports to Bahrain, from 7,499 tonnes swt to 635 tonnes swt, due to the lifting of the government subsidy on imported Australian lamb. Encouragingly though, two of the largest and most progressive markets in the Middle East for Australian lamb – the UAE and Qatar – did record considerable growth for the January to November period. Volumes to the UAE jumped 10% from last year, to 18,813 tonnes swt, and Qatar increased 13%, to 14,766 tonnes swt.

Lamb shipments to the US for the 11 months totalled 48,567 tonnes swt – up 8% year-on-year. The cuts underpinning the overall growth for the year so far are assorted cuts (three or more primals packed together), which increased 87% from year-ago levels to 4,603 tonnes swt, along with shank (up 26%, to 4,582 tonnes swt), shortloin (up 4%, to 3,860 tonnes swt), carcase (up 5%, to 2,285 tonnes swt) and manufacturing (up 18%, to 1,430 tonnes swt). In contrast, leg exports eased 1% year-on-year, to 12,895 tonnes swt, while shoulder and rack declined 21% and 16%, to 4,259 tonnes swt and 3,502 tonnes swt, respectively.

Lamb exports to China for the year-to-date rose 24% from the same time last year, to 35,339 tonnes swt. Volumes of breast and flap were up 11%, to 22,086 tonnes swt, while manufacturing increased 40%, to 6,776 tonnes swt. Neck shipments rose 19%, to 3,522 tonnes swt, and shoulder recorded a more than four-fold increase for the January to November period, compared to last year, at 2,473 tonnes swt. Domestic sheepmeat production in China has reportedly been high this year, and as a result of the higher slaughter, domestic production levels are anticipated to be lower next year. In-market reports suggest that importers are anticipating good demand for sheepmeat during the upcoming cooler months.

With fewer lambs forecast to be slaughtered in 2017, compared to this year, Australian lamb shipments in 2017 are anticipated to be 4% lower year-on-year, at 220,000 tonnes swt. While this will be the third consecutive year of slightly lower exports, volumes are still higher than 200,000 tonnes swt – a level breached for only the first time in 2013.

For more information on Australia’s major lamb export markets and what is expected for 2017, click here to read MLA’s Sheep Industry Projections 2017.