September 24, 2003
Prices High For Australian Lamb But Not Wool
Australian lamb and sheep meat producers can expected good returns for at least the next five years, according to new reports by Meat and Livestock Australia.
MLA's chief market analyst, Peter Weeks, said continuing strong demand for lamb and sheepmeat in domestic and international markets and low global supplies, translates to upbeat prospects for sheep and lamb producers.
Mr Weeks said producers had begun restocking their flock rebuilding despite poor feed conditions in some areas and unfazed by good sale prices. Sheep slaughter is reportedly at its lowest level in five years, said the survey results of the annual MLA Lamb Survey and the MLA Sheep Industry Projections Update. The lamb survey results also showed a strong shift into specialist prime lamb production, particularly second-cross lambs.
Lamb slaughter, slaughter weights and total lamb production are expected to recover from spring 2004 onwards. This should lead to continued growth over the medium term to a record 400,000 tonnes by 2005 and almost 450,000 tonnes in 2007, possibly easing lamb prices from current record highs.
North American and Asian markets look set to lead the overseas demand for Australian lamb. But tight volumes for export, a stronger Australian dollar and difficulties sourcing heavy lambs have put expected 2003 lamb exports down by 10 per cent. Nevertheless, Australian lamb exports are projected to expand 15 to 20 per cent in the coming year.
Not so rosy is the outlook for Australian shorn wool production. This is forecast to decline by 10 per cent to 440 million kilograms greasy in the 2003-04 season, based on a production estimate for the 2002-03 season of 490 million kilograms greasy, says the Australian Wool Innovation (AWI) wool production forecasting committee.
Smaller sheep numbers, the continuing impact of drought in New South Wales and Queensland, and high sheep and lamb prices were reasons for the lower estimates.
Sheep shorn numbers are forecast to be 104 million in 2003-04, a fall of 11 per cent from the 2002-03 forecast and 6 million lower than the previous forecast of 110 million in June.
AWI said that, while there had been some good rains since June in New South Wales, Australia's largest wool producing state, they had been mainly restricted to the southern and western regions. "Seasonal conditions in much of the state remain in the balance and wool production will depend on weather conditions over the next four to six weeks, with widespread rains needed," AWI said.
Source: Meat & Livestock Australia