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US lamb imports challenged by Aussie and NZ supply
24 October 2018
US lamb and sheep prices have been stable in recent weeks, despite slaughter numbers running above year ago levels. The sharp reduction in imported lamb availability from Australia and New Zealand in August and September forced some end users to switch to domestic product.
US lamb slaughter seasonally increases between November and December, in order to support higher retail holiday features, but has the increase has been brought forward due to tight supplies of imported lamb in recent weeks. The latest cold storage report highlighted end users have been accumulating inventories in preparation for an increase in retail features. As at 1 September, the total supply of lamb and mutton in cold storage was 39.7 million pounds, 23% higher than a year-ago and 15% higher than the five-year average.
The prospect of seasonally higher retail features, a drawdown in freezer inventories, reduced imports and lower domestic lamb numbers on feed (due to recent high slaughter rates) should continue to bolster imported lamb prices through to the end of the year. In addition, surging imported sheepmeat demand from China and the high cost of finished lambs to heavy weights will continue to challenge Australian shipments to the US this year.
Imported prices have increased in recent weeks, especially for chilled and frozen racks – foodservice demand, supported by a strong US economy, for these items tends to be quite inelastic and the shortfall in supply has caused prices to lift close to 25% above year-ago levels. Prices for frozen shoulder and leg meat is currently about 5% higher year-on-year.
