W2: Weekly Lamb & Mutton Update

Australia

Behind Australia’s Record Lamb Export Year of 2022 (Jan 11)

Australia could be set for another lamb meat export record in 2023 after a big year in 2022, where global versus domestic demand, workforce capacity and lamb carry-over are expected to be key factors. According to analyst Matt Dalgleish, Australian lamb export volumes for December 2022 finished the year marginally ahead of the five-year trend. There were 23.17K MT of lamb exported for the final month in 2022, bringing the year’s total exports to 284.26K MT. Mr Dalgleish said Australian mutton exports finished the 2022 season at nearly 9pc under the five-year average for December at 15.22K MT swt. Total mutton exports for the 2022 year were 2pc higher than 2021 with 144.01K MT swt exported for the year. Compared to the annual average volumes over the last five-years the current mutton export volumes are 9pc under trend, he said. 

Australian Lamb and Mutton Meat Exports 2022 in Review (Jan 12)

Australian lamb exports were up 7% from 2021 to 284.26K MT, the largest export figure on record. The US and China remained the two largest export markets, with exports to the US growing by 6% to 75.45K MT and China falling 6% to 52.15K MT. These two markets took 45% of total lamb exports and represent huge opportunities in the future, as lamb consumption is still relatively low, especially in the US. Another key insight into Australian lamb exports in 2022 was the increasing diversity of export locations. South Korea and Papua New Guinea were the third and fourth largest export locations for the year, and exports grew by 60% and 68% respectively to 22.90K MT and 21.90K MT. Lamb prices were strong for the year, peaking at USD 8.47 (A$12.17) in June and averaging USD 8.03 (A$11.53) for the year-to-October.

Mutton exports were similar to lamb, growing by 2% for the year to 144.01K MT. The main difference was that exports to the five largest markets fell by 4%, mostly due to US exports falling by 23%, while other exports rose by 25%, representing a major diversification of export markets. The top five markets still account for more than 75% of Australia’s exports, but growth in varied markets could make Australian exports more resilient to external shocks in the future.

Weekly Sheep Market Wrap (Jan 13)

The sheep and lamb market began 2023 stronger than where it ended in 2022 across most categories. There was evidence that buyer demand and processor interest remained strong, with significant volumes of lamb and mutton available as the flock growth continued. The cold and wet winter held back many lambs from the spring flush in 2022 and these will now hit the market in the first half of 2023. It is expected that the market conditions will operate similarly to the first half of 2022 where the same set of conditions occurred. The sheep and lamb market at this stage in January 2022 was receding from the record highs it set in the second half of 2021. The easing of prices seen throughout 2022 and evidently the beginning of this year demonstrates the market returning to longer term values. Despite the significant supply of lambs in 2022 delivering the record lamb export volumes of 284K MT, market prices in early 2023 are performing resiliently well.

New Zealand

Lamb Exports Feel the Chill of Global Inflation (Jan 12)

Changing consumer demand and the lower cost of producing frozen meat means just 6K MT of chilled lamb was exported during October and November. In the past two years 9K MT of chilled lamb was exported over that same period, and five years ago the volume was close to 12K MT. The volume of chilled exports last November as a percentage of all lamb exports actually halved from 20% to 10%. A sharp USD 2.05/kg decline in the average export values between last October and November reflects the speed with which international prime lamb markets have weakened. Croad said average values fell from USD 12.90/kg in October to USD 10.85/kg in November, a decline that dwarfs drops over the same period in 2021 of 40c/kg and 20c/kg in 2020. Between September and November last year, the value of flaps to China alone eased USD 2/kg. 

Ireland

Sheep farms in Ireland are in crisis because of market prices (Jan 11)

Sheep farms are in crisis in Ireland because current market prices do not reflect “higher production costs on farms”, the Irish Farmers’ Association (IFA) warned. Kevin Comiskey, chair of the IFA’s national sheep committee, strongly criticized factories for further cuts on lamb prices. He said the weakening of lamb prices at a time when production costs are at an all-time high “is not acceptable”. He detailed that factories were “imposing weight cuts on lambs in an attempt to flatten prices” and said this sent “negative messages” to farmers committed to finishing lambs. The IFA sheep chair stated that input costs on sheep farms have increased in the past 12 months by over 40%. According to latest IFA figures factories are paying up to USD 7.02/kg (€6.50) for lambs, with higher deals for groups and larger lots. Cull ewes are ranging from USD 3.46/kg (€3.20) to USD 3.78/kg (€3.50).

W1 of 2023 Saw Over 51K Sheep Processed (Jan 11)

The W1 of 2023 saw 51K sheep processed, up over 7K head in the corresponding week in 2022. The first week of processing at meat processing plants was once again a shorter one due to the bank holiday Monday on account of New Year’s Day. This meant a four day processing week which ended with 51.76K sheep being processed according to figures released by the Department of Agriculture, Food and the Marine (DAFM). Looking at the kill figures for last week (week ending January 7), 46.29K hoggets were processed, along with 5.47K ewes and rams.

Irish Sheep Meat Exports Record Growth for Third Year in a Row (Jan 12)

The 2022 year saw Irish sheep meat exports, for the third year in a row, record volume and value growth. Figures released by Bord Bia in its Export Performance and Prospects Report 2022/23 show that Irish sheep meat exports in 2022 were valued at USD 514.01M (€475M), an increase of 17% on 2021. At the same time, the volume of exports increased by 10% to reach 75K MT. However, although the figures were positive, it won’t be of much comfort to Irish sheep farmers with lamb prices in 2022 not living up to expectations in a year of high input costs. 

Spain

Freeway to Market in Areas Affected by Sheep and Goat Pox (Jan 9)

Since last December 14, there was already freedom of commercialization in all the areas in which cases of VOC were detected, after having complied with the preventive restrictions that were adopted according to the protocols established by the State. In this sense, the general director of Agricultural and Livestock Production, Manuel Gómez, thanked the farmers "for the speed with which they reactivated the marketing of their sheep and goats, once they received the relevant authorization". Likewise, the Ministry maintained all the aid lines launched to support farmers with farms that have been affected by Sheep and Goat Pox (VOC), endowed with a budget of USD 540.49K (500K euros), as well as a promotional campaign Andalusian lamb consumption for the Christmas period.

China 

China was Unable to Reach Uruguayan Lamb Offerings Prices During W2 (Jan 9)

In W2 in Uruguay, Uruguayan meat exporters sell lamb carcasses for USD 4.1K/MT CFR to China. On the other hand, Chinese importers were seeking to buy lamb carcasses for USD 3.8K/MT CFR. Only a few operations were completed at the asking price, as many buyers could meet the exporters' price.

Henan Province in China Aims to Raise 60M Sheep by 2025 (Jan 10)

On December 27, 2022, the General Office of the Henan Provincial Government issued the "Opinions on Promoting the High-Quality Development of the Sheep Industry" (hereinafter referred to as the "Opinions"). This clearly pointed out that it is necessary to establish and improve modern breeding, forage feed, processing and circulation. The six major systems of epidemic prevention and control, scientific and technological support, and modern marketing have cultivated the sheep industry as an important channel for farmers to increase income and a pillar industry for rural revitalization, and will build Henan into a strong sheep industry province in the country. "Opinions" pointed out that by 2025, the number of sheep raised in Henan Province will reach 60M, the output of mutton will reach 400K MT, and the output value of primary sheep production will reach USD 5.20B (35B yuan); by 2030.