Sheep and lamb industry weathers drought in ‘impressive’ performance

08 December 2015

A combination of higher carcase weights, improved lamb marking rates and less competition from a shrinking New Zealand sheep flock make for an impressive outlook for Australian lamb producers over the coming years, according to Meat & Livestock Australia’s (MLA) 2016 sheep industry projections, released today.

MLA’s Manager of Market Information, Ben Thomas, said ongoing productivity improvements were contributing to the Australian sheepmeat industry’s growing value.

“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.
 
“Despite the dry season, average carcase weights increased 1.5 per cent, a trend partially attributed to the change in composition of the sheep and lamb flock,” Mr Thomas said.
 
MLA predicts 2016 will see a 3.4 per cent fall in lambs slaughtered due to a reduction in the ewe breeding flock; however, this will be short-lived and is expected to rise again in 2017.  
 
“Even though fewer lambs will be processed next year, the heavier carcase weights will carry production through the next few years.
 
“Producers are driving this transition, moving from a Merino-based flock in the 1980s to higher yielding meat and composite breeds, and that should further boost carcase weights in the future,” he said.
 
Price volatility in the lamb market has eased slightly over the past three years, but Mr Thomas said the key to the industry’s strength would be reflected in productivity gains.  
 
“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 said.
 
The demand for Australian lamb in 2016 will continue to be heavily influenced by international customers, with the Australian dollar tipped to hover below the US70¢ mark, which will assist trade and Australian lamb prices considerably.
 
Exports are forecast to be the third highest on record next year at 230,000 tonnes, accounting for 55 per cent of all lamb production.
 
“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.”
 
The smaller volume markets of Japan and Europe will be relatively steady but will remain highly valuable customers of Australian lamb.
 
Mr Thomas said overall the industry appeared to be in a very favourable position. The national sheep flock is forecast to be relatively stable over the coming years, with genetic gains achieved on-farm driving increased lamb production in the future.
 
Find the full report here

For media enquiries contact: Rose Glasser, MLA Media Manager, p: 0408 729 165, e: rglasser@mla.com.au

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