A PERIOD of consolidation following the record trading highs in early 2011 seems apparent for the lamb industry in 2012.
As a result, price rises are being tipped to remain on hold as supplies continue to build, reducing the squeeze on demand at both the retail and processing levels.
However, this lower cost product flowing through the supply chain is expected to have its rewards.
The availability of lamb globally remains tight, which leaves Australia in a strong export position.
And, on the domestic front, the market will remain the industry’s largest outlet, despite the fact exports are expected to climb and claim a 49 per cent market share.
These are the main points to emerge from a mid-season review of the 2011-12 sheep and lamb selling season, compiled by Meat & Livestock Australia.
Report author Robert Baker suggests that improved seasonal conditions during the past six months have resulted in much stronger flock growth than anticipated.
He suggests the national flock, as estimated by Australian Bureau of Statistics at June 30, 2010, at 68.085 million was understated.
A real figure of 74.283m head at June 30, 2011, added a further 4.2 per cent increase to flock numbers tipping 77.38m by year’s end and 82.65m by the end of the forecast period in 2016.
The larger flock and turn-off levels are expected to lower the pressure from the record price levels of 2011 but anticipated stronger demand, mainly from the Middle East and China and a recovery in demand from the US, is expected to aid export performance despite the high dollar.
Mr Baker says the high feed availability in 2012 will have many producers weighing the options of turning lambs off at heavy weights versus shifts in stocking rates and lamb rates.
“Lamb exports now generate a much higher proportion of income than in previous years, with a record 48.5pc of total lamb production sent off shore in 2011,” he said.
The Middle East was the
largest export market with 34,893 tonnes shipped weight (22pc),
followed by the US at 21pc and
growing Chinese demand at 18pc.
These markets are expected to grow, with the US starting to recover this year.
“Live sheep exports are assumed to stabilise after 2011’s decline, in terms of numbers shipped, as more ewes and wethers become available to the trade, particularly later in the year,” Mr Baker said.
“Mutton exports are also forecast to increase after a decline in 2011, which was due mainly to restricted supply, with the Middle East expected to consume more than 41,000 tonnes in 2012.
“The main factor limiting the potential for producers to continue to benefit from these market conditions is the ability to supply enough to meet demand. However, fortunately for the industry, conditions remain conducive to an ongoing flock rebuild.”
Meanwhile, did you notice in the days before Australia Day (other than Sam Kekovich’s big chop campaign) the huge full-page advertisement in the daily newspapers whereby a major supermarket spouted a cash-back amount on legs of lamb?
Well, according to saleyard gossip, the fresh food people were overwhelmed by the response so much so the retailer needed two extra days to honour all commitments, which they happily did apparently.
Email a friend