MLA's Sheep Industry Projections 2016
10 December 2015
The 2016 sheep and lamb projections highlight the ongoing productivity improvements in the Australian sheepmeat industry.
The national sheep flock appears to have stabilised at approximately 70 million head, with a breeding base of 40 million ewes. From these ewes the number of lambs slaughtered each year has been increasing, and through improved lifetime management, average carcase weights continue to rise. This was particularly evident in 2015, when, despite many of the large sheep producing regions enduring 'below average’ rainfall for the majority of the year, average carcase weights increased across the country.
Hence, the post-drought decline in national lamb slaughter forecast in 2016 is only expected to be small (down 3.4% year-on-year to 21.5 million head), and the fall in lamb production even more modest (down 2.2% year-on-year to 482,000 tonnes carcase weight (cwt) due to further increases in average lamb carcase weights.
Improvements in lamb marking rates and small gains in average carcase weights are expected to drive lamb production forward from 2017 onwards – to reach 552,000 tonnes cwt in 2019.
The demand for Australian lamb in 2016 will continue to be heavily influenced by international customers, with the A$ tipped to hover below the US70¢ mark, which will assist trade and Australian lamb prices considerably. That is not to discredit the domestic market, where per capita consumption is forecast to hold steady at 9kg and remain the largest lamb market on both a value and volume basis.
The US and Middle East are likely to remain the most influential export markets in 2016, where trade is expected to build further on the 2015 levels – albeit only slightly. In contrast, as a result of slightly lower production, the anticipated trend to all other markets is steady to lower, year-on-year.
Live exports are expected to remain subdued, with the smaller WA sheep flock limiting available numbers and some resistance expected to current high price levels.
Nationally, the past three years have seen a small reduction in the volatility in Australian lamb prices, with the most noticeable improvement being the typical October/November low, which has been finding a higher level each year since 2012 – the national trade lamb indicator has ranged between 500-600¢/kg cwt for the majority of 2015, rather than 400-600¢/kg cwt which occurred in the two years prior. Considering the forecast lower New Zealand lamb production and exports, combined with the anticipated lower A$, the higher 2015 trade lamb price trend may occur again next year.
To read the MLA Sheep Industry Projections 2016, please CLICK HERE
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