In W22 in the lamb and mutton landscape, the Australian heavy lamb indicator eased USD 0.33 to USD 6.27/kg carcass weight (cwt), despite a 17% decline in throughput. Wagga Wagga, which contributed 37% of throughput in the indicator, eased USD 0.22 for heavy lambs. Lamb numbers at the sale lifted a little but quality was mixed. Not all the key buyers were present, with weight determining the export market sales. The trade lamb indicator eased significantly in price, down USD 0.72 WoW, with a 15% reduction in throughput. Reduced Australian throughput could be due to producers holding on to the stock for joining. Easing re-stocker demand is also contributing to lower prices. Sheep slaughter decreased WoW but lamb slaughter picked up. The prioritization of killing floor space between mutton and lamb is at play. Combined sheep and lamb slaughter is still 25% above 2022 levels and 42% above 2021 levels.
In the 12 weeks to April 16th, UK frozen sheep meat volumes made up 10.4% of total sheep meat sales, down compared to a 12.7% market share in 2022, following a decline of 19.3% YoY in frozen sheep meat sales. This is attributed to a drop of 31.5% YoY in purchases of frozen-ready meals. Also, with lamb being the most expensive protein compared to beef, chicken, and pork, shoppers tend to reduce their lamb consumption in favor of cheaper proteins. Similarly, HMRC data indicates that YTD UK sheep meat import volumes fell by 32.1% YoY, down to just 7.69K MT. This was driven by the YoY decrease in imports from New Zealand (25.1%) and Australia (54%), with the most significant drops in volume were seen for boneless lamb (45.2%), and sheep legs (20.6%). This points to a return to the declining trajectory of UK sheep meat imports, following growth in 2022. A combination of continued recovery in New Zealand exports to China, against a backdrop of declining New Zealand production, is expected to be important market drivers, as well as pressure on consumer demand domestically in the UK.
QMS indicates that UK lamb prices have made a firm start to the 2023/24 season as lambs have been slow to reach markets and abattoirs. According to IAAS data, at Scottish marts, prices for new season lambs have been trading around USD 3.5/kg live weight in mid-May, up about 10% YoY, and by around 25% on the five-year average. Meanwhile, AHDB reports that deadweight prices traded at USD 7.27/kg for R3L grades in W2 of May. LAA and IAAS data showed that across Great Britain, the number of new season lambs traded in the four weeks to May 10th fell by nearly 25% compared to the same period in 2022. Experts outline that it has been an interesting start to 2023 for the lamb trade, with prices subdued through January and February, back at pre-COVID levels for the time of year, before a strong uplift through March and the first half of April took market prices back towards the highs of spring 2021, supported by seasonal demand from Ramadan and Easter.
According to Stats NZ data, as of June 30, 2022, the New Zealand sheep national flock stood at 25.3M heads, down 2% YoY, and continues the long-term contraction of the national flock. Since 2002, the New Zealand sheep flock has shrunk by 14.2M heads, a decrease of 36%. This indicates that the ratio of sheep to people is below 5:1 for the first time since the 1850s, with a peak ratio of 22:1 registered in the 1980s. This is attributed to several factors including the removal of farm subsidies in the 1980s perhaps being the most instrumental. More recently, sheep numbers have been negatively pressured by factors such as lower global wool prices, adverse weather, and increased tree-planting for carbon-offsetting schemes. Despite the decline in New Zealand's sheep numbers, sheep meat export volumes have remained relatively stable. Over the past decade, New Zealand’s sheep flock has decreased by 19%, while exports have fluctuated around 400K MT, up 7%, demonstrating an increase in productivity. Lastly, the warm conditions over the past two weeks in Ireland have seen cases of Blowfly strikes noted in lowland sheep flocks across the country. Blowfly is an external parasite that commonly appears over the summer month. However, depending on the weather, cases as early as April and as late as November can also occur. With the rise in temperatures, fly populations have increased and with this, the risk of Blowfly strike has also increased. Blowfly strike occurs when flies are attracted to a foul-smelling, soiled fleece. The flies land and deposit eggs onto the affected sheep. At this time of year, shearing ewes is the best option to protect them from flystrike, and treatment can be administered in a few weeks' time. Flystrike will decimate lamb performance and may result in death if left untreated. As always, prevention is better than cure and farmers should monitor their sheep closely for cases of flystrike.
