Export sheepmeat prices to lift as world supply tightens

by Editor fleischwirtschaft.com
Wednesday, January 30, 2008

After two years of easing world sheepmeat prices, an industry report says that the price slide appears to be turning up again.

It’s a Rabobank Global Focus Report, titled: Sheepmeat: opportunities as supply tightens. The report’s co-author and senior Rabobank Food and Agribusiness Research and Advisory analyst, Wendy Voss, says supply has tightened in a number of key export nations:

  • In Australia, a combination of drought and reduced returns to wool producers has seen the sheep flock decline from 120 million head in 1997 to around 86 million head as of June 2007.
  • New Zealand, Australia’s largest competitor in this sector, will also face a decline in flock size and lamb availability in 2007/2008.

However, the challenge remains to expose more consumers to the attractions of lamb and mutton. So additional industry investment will be needed in consumer education and promotional activities.

Developing countries are expected to lead global meat consumption growth over the next 10 years, with a volume increase of 27% projected, according to Voss. This trend should provide opportunities for increased sheepmeat sales of both lower priced and higher value sheepmeat items.

The U.S. market remains the largest export market for Australian lamb processors, taking 27% of total export volume in 2006, according to the report. U.S. consumption of lamb and mutton, on the other hand, is expected to remain steady at 0.5 kg per capita for 2008.

The Korean market, although best known as a beef export destination, also offers potential.

On the downside, the strength of the Australian dollar continues to impact on export returns for lamb. Ultimately, widening the consumption base for mutton and lamb globally, to sustain higher average returns will be necessary to alleviate some of the currency and cost pressures, Voss added.