The outlook for the Australian sheep industry looks positive in 2014, underpinned by global demand, the lower $A and reduced competition from New Zealand.
Meat and Livestock Australia’s (MLA) 2014 sheep industry projections were released this week suggesting that Australia is well-positioned to fill the burgeoning export demand.
MLA chief economist Tim McRae said with the A$ assumed to trade lower throughout the year, decreased supplies out of NZ and expanding demand from major markets, Australian lamb and sheepmeat would be highly favoured.
“New Zealand experienced drought conditions throughout 2013 which resulted in their lowest lamb production rate in almost 60 years.
So Australia should be well placed to pick up a share in some of their export markets,” said Mr McRae. After a record supply and export year in 2013, overall production volumes are expected to decline this year, with lamb slaughter forecast to decrease 4.3 per cent in 2014, to 20.95 million head.
“With a fall in Australian supplies, this should have a positive impact on prices, provided seasonal conditions improve and enable Australian producers to finish lambs to meet market requirements,” he said.
“Drought and a scorching summer across most key lamb producing regions of Australia will be felt on supplies throughout the first half of 2014, and the impact of seasonal conditions upon lambing rates in the year ahead will be crucial.
“As a result, the domestic market, which is still Australia’s largest single lamb market, could feel a greater impact on supplies and retail prices.”
Globally, the combination of China, the Middle East and the US will continue to take the majority of Australian shipments in 2014, making up 69 per cent of total exports. Australian live sheep exports are forecast to reach 2.3 million head in 2014, up 22.3 per cent on the estimated 1.88 million head for 2013.Australian lamb exports to the Middle East have grown rapidly, forecast to reach 61,000 tonnes swt in 2014.Similarly, Australian lamb exports to the US are forecast to grow a further 7% in 2014, to 42,000 tonnes swt, which would be the highest calendar year total since 2007.The Chinese market has also developed as a major destination for Australian sheepmeat in 2013. China’s proportion of Australia’s lamb exports is expected to increase further, with total volumes forecast to grow 10% on the record 2013 volume, to 43,300 tonnes swt.