Supply constraints limit goatmeat exports

Australian goat exports for 2016 were down 11% year-on-year, largely underpinned by tighter supplies, despite growing domestic and global demand. The latest global goat exports summary for December reports 2,997 tonnes shipped weight (swt) during this period, bringing the 2016 total to 26,794 tonnes swt (DAWR).

Australia’s largest goat export market remained the US, accounting for 17,807 tonnes swt, equivalent to 66% of total goat exports and a 1% increase year-on-year. Taiwan, the second largest export destination, increased 35% year-on-year accounting for 3,140 tonnes swt. Australia is a relatively small producer of goatmeat compared to the rest of the world, but is the largest goatmeat exporter. This is primarily due to relatively low domestic consumption and increasing international demand.

However, competition between the domestic market and international demand has continued to increase and the pressure created from both sides of the supply chain has moved goat prices into record territory. Since 2013, over-the-hook goat indicators have been on a steady upward trajectory. In the last 12 months alone, the 12.1-16kg cwt over-the-hook goat indicator has jumped 101¢ – from an average of 511¢ in January 2016, to 612¢/kg cwt for January 2017-to-date – with top quotes of 700¢/kg cwt.

National goat slaughter was back 23% year-on-year for the year-to-November 2016, totaling to 1.7 million head (ABS). Above-average rainfall across most of the country in June and July contributed extensively to lower slaughter levels, as it presented logistical difficulties harvesting goats. June slaughter numbers totalled 58,370 head, the lowest monthly slaughter figure since April 2008, and the short supplies were reflected in the export figures for June and July – 938 tonnes swt and 918 tonnes swt, respectively. Before then, the last time monthly goatmeat export volumes dipped below 1,000 tonnes was in April 2007.

It’s important to mention the increase in the Australia dollar over the course of 2016, which has provided further support for Australian goatmeat exports. The A$, for the most part of 2016,  hovered around 75US¢, having started the year around 70US¢. Even with a year-on-year decline for goat exports, strong demand and growing investment in the industry is likely to continue providing support for the Australian goat market in 2017.