Home-grown lamb piques interest abroad

Australian lamb continues to reap acceptance as a valued export trading commodity with increasing competition from overseas buyers, according to Meat and Livestock Australia.

Against a relatively high Australian dollar, lamb exports to China lifted at a record pace of 34 per cent in the first half of 2013, while other oversees destinations were also hungry for their slice of the humble lamb.

MLA's sheep industry mid-year update, released last week, boasted about the robust demand for Australian lamb and mutton from overseas markets, especially because the Australian dollar had fallen to lower levels.

"Lamb export records have been broken (188,618 tonnes swt in 2012 and an expected 197,000 tonnes swt in 2013), moving the sheep industry into a positive mode," MLA said.

The report said while the domestic market has remained resilient to retail lamb price movements which have averaged a much lower $12.58/kg from the high point of $14.99/kg in the June quarter of 2011, sales growth has been attributed to oversees markets which is expected to account for 51.5 per cent of all lamb production in 2013.

"The national lamb slaughter in 2012-13 reached 21.1 million head - up 12 per cent year-on-year and the highest fiscal year level since 1971-72, which is almost 2.25 million more lambs than the previous year.

"Sheep slaughter increased by 58 per cent to 8.1 million head, almost 3 million above 2011-12."

Relishing in news from the Australian Bureau of Meteorology that rain would fall into October, MLA said improving grower sentiment was expected to take stock in this year's spring lambing.

Although MLA estimated average total farm cash income from slaughter lamb producing farms (200+ lambs sold per year) in 2012-13 declined by 19 per cent, those incomes were still 13 per cent above the 10-year average.

The report said tighter lamb supplies into the second half of 2013 and into 2014, due to the 2012-13 poor breeding season, was expected to put upward pressure on prices.

This will be helped along with a sharp drop in New Zealand lamb supplies due to drought conditions.

MLA forecast overall slaughter numbers would decline 2.4 per cent to 20.15 million in 2014.

Despite this, MLA said the outlook for Australian lamb remained very bright and this would likely to benefit the entire supply chain.

However, the live export sheep industry is sill being dragged down by the Exporter Supply Chain Assurance System to record depths, especially affecting WA producers.

The current year looks like a write-down with live exports expected to decline to their lowest level in more than 20 years, to around two million head - down 12 per cent on 2012.

The report said decline was primarily due to no trade with previously large markets of Bahrain and Saudi Arabia, sharp contraction to Turkey and tighter sheep turnoff.

MLA said ESCAS must be implemented correctly to achieve the desired animal welfare outcomes with no negative impacts on the live export sheep trade.

The flock felt the high turnoff during 2012-13, and MLA estimated the national flock declined 1.1 per cent to 73.9 million head as of June 30, 2013.

The report said producer sentiment over the past three years was set on building flock numbers, but the return to drier conditions in mid-2012 resulted in producer intentions changing dramatically.

The optimism now rests with a return to better seasonal conditions in 2013-14.