Saturday, April 13, 2024

Aus lamb torrent shows no sign of slowing

Neal Wallace
Production headed for a fourth straight record year.
Reading Time: 2 minutes

There appears to be little reprieve in store for New Zealand sheepmeat exporters battered by record volumes of Australia sheepmeat, with the lucky country forecasting another year of record production.

Meat & Livestock Australia (MLA) is forecasting lamb production will this year reach 621,000 tonnes, a 9% increase on 2023, and the fourth successive year of record production.

If achieved, the 2024 production will be 21.3% above the 10-year average. 

The MLA forecasts the 2025 lamb crop to drop to 587,000t and then rise to 606,000t in 2026 due to improved carcase weights.

Record Australian sheepmeat production in the past year has been blamed for dampening international prices in key NZ markets like China.

After three years of consecutive growth, the Australian sheep flock is forecast to fall 2.9% this year to 76,500,000, but that will do little to curb meat production.

Mutton production this year will be the largest since 2006 at 254,000t, up 3.14% on 2023, before falling for the next two years.

Stephen Bignell, MLA’s market information manager, said as the largest world’s sheepmeat exporter, Australia is optimistic markets will absorb the extra production.

“Economic resilience in the United States and emerging markets will drive demand for lamb, while the outlook for consumer demand in China remains uncertain,” he said.

Meanwhile, Rabobank said limited or negative wage growth in key global economies in the coming year ahead could mean steady or declining beef consumption.

Jen Corkran, Rabobank’s senior NZ animal protein analyst and author of the  Global Beef Quarterly report, said as a premium-priced protein, beef sales often suffer when economic conditions put pressure on consumer spending.

“In a market where beef production growth is limited, like the US for example, we may see consumers willing to tolerate higher prices at the expense of some consumption, thus maintaining demand,” she said.

“While in a market with growing supply such as Australia, lower prices may be needed to encourage consumption.”

China’s demand for beef will likely remain sluggish in the first half of this year while lower domestic supplies in the US has seen product diverted from softer markets

“Brazil’s exports to the US in January 2024 were ahead of 2023 and Australian volumes were up 127% year on year,” she said.

“If China’s recovery is better than expected, global beef markets could become quite tight, fuelling price rises.”

The NZ bull beef kill is down 3.9%. Beef exports for 2023 were up 7% by volume (511,680t) but down 9% in value ($4.4 billion).

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