What is happening in the Australian lamb market right now?

Over the past year, the lamb market has seen a turnaround, with strong sentiment and an improved weather outlook. The industry has seen prices improve by 10–20% compared to a year ago.

When it comes to lambing season, the availability of high-quality feed is critical to not only produce lambs of high quality but to additionally ensure healthy lamb fertility into the following year.

The 2024 lambing season is approaching and with the late autumn break in the southeast of Australia there will be an impact on the upcoming lamb crop. With lower rainfall in key sheep country will be an increase in demand for grain and fodder producers focusing on ewe survival for next year’s lamb crop to maintain the fertility and health of their ewes.

Also: Quarterly Australian Lamb Slaughter Hits All-Time High

Given the current market situation, the Heavy Lamb and Trade Lamb Indicators are diverging from the Light Lamb and Restocker Lamb Indicators. After starting the year at approximately 750¢/kg cwt, the gap between these indicators has now grown to around 30%. The largest gap between the indicators was seen in August 2023 to October 2023, when the price eased from both market sentiment and the forecasted weather outlook.

What does this mean for you? The seasonal conditions have driven the divergence in price between the Trade Lamb and Heavy Lamb Indicators vs The Light Lamb and Restocker Lamb Indicators. This is where heavier lambs are entering the market as a result of protein demand both domestically and in the United States, resulting in week-on-week record cattle and sheep slaughters. A lower supply of light lambs has been driven by the west-to-east transfer of restocker style lambs combined with drier conditions in Victoria leading to a divergence in price.

Key points:

Lamb prices are strong from improved weather outlook.
Heavier lambs are entering the market before lambing begins.
Drier conditions in Victoria leading to less demand for lighter lambs.

MLA

China Approves Import of Danish Processed Pork Products

BEIJING (Reuters) – China has given the green light for the import of Danish salami, frankfurter sausages, and canned pork, as announced by top processor Danish Crown this week. This approval paves the way for shipments of higher-value processed meat to the world’s largest pork consumer.

The agreement, which follows more than nine years of negotiations between China and Denmark, allows two factories owned by Danish Crown subsidiary Tulip Food Company to export six products to China: pepperoni, salami, frankfurter sausages, hotdogs, canned luncheon meat, and canned sausages.

Tulip Food Company chief executive Kasper Lenbroch stated that exports of these products to China could be worth 250 million Danish krone ($42 million) annually in a few years. “I expect the first container to be shipped off within the next few weeks,” Lenbroch said in a statement on Monday. The company already has agreements in place with Chinese distribution partners.

Reuters

Opportunities at the Saudi Food Show for British Lamb Exporters

This week, British lamb and dairy businesses headed to Saudi Arabia in a bid to meet growing consumer demand and build on long term export opportunities.

Exporters from both sectors have joined us at the Saudi Food Show in Riyadh from 21−23 May.

The show is Saudi Arabia’s leading event for food and beverage sourcing. It provides UK lamb and dairy exporters with the opportunity to meet key buyers from across the Middle East region.

Dr Awal Fuseini, AHDB Senior Halal Manager, said:

“Although Saudi Arabia is not our biggest market for lamb in the region, it has been identified by AHDB as one of the markets with strong growth potential for our exporters.

“With this in mind, participating in the Saudi Food Show is a great opportunity for us to meet with key industry buyers and emphasise our high-quality lamb production credentials with a view to increasing our presence in this growing market.”

AHDB

The Saudi Food Show 2024 | Riyadh

Export of live animals from the UK now banned

A new ban on exporting live animals came into law today (Monday 20 May) as the Animal Welfare (Livestock Exports) Act received Royal Assent, capitalising on a post-Brexit freedoms and bolstering the UK’s position as a world leader in animal welfare standards.

The legislation delivers on a key manifesto commitment to ban the export of live animals including cattle, sheep, and pigs for slaughter and fattening from Great Britain.

It is only possible now the UK has left the European Union, and will stop animals enduring stress, exhaustion and injury on long and unnecessary export journeys.

Quarterly Australian Lamb Slaughter Hits All-Time High

The latest livestock products data released by the Australian Bureau of Statistics (ABS) shows that last quarter, Australia had the highest lamb slaughter on record at 6,935,700 head.

The data, analysed by Meat & Livestock Australia (MLA), also shows that the January-March quarter also broke production records for lamb at 167,263 tonnes, up 8% on last quarter and 48% last year.

MLA’s Senior Market Information Analyst, Erin Lukey, said that the higher levels of production and recorded carcase weights are reflective of conditions that occurred towards the end of last year.

“Across the board we saw carcase weights for lamb lift 5% quarter-to quarter to 24kg, which equates to the five-year average. This return is after the three-year lows recorded last quarter,” Ms Lukey said.

“Lamb carcase weights lifted across all states according to the ABS. This is partly attributable to the end of season turnoff of older lambs, and improved weather conditions recorded in the latter months of 2023, particularly in New South Wales and Victoria.”

Victoria had its second highest lamb slaughter on record, only following last quarter’s record. It also had its highest lamb production for the second year in a row, while New South Wales recorded an 18% increase in slaughter and 25% jump in production.

Western Australia also had its second highest lamb production quarter on record, as well as its second highest quarter for slaughter.

National mutton slaughter was also at its highest since December 2019 at 2,784,000 head. However, carcase weights on average across the country fell 5% to 24.9kg, with the biggest drop felt in Western Australia where weights eased 9% to 24.5kg.

The value of sheepmeat slaughtered increased 41% quarter-to quarter to $1.257 billion, which was the largest since December 2021. This equates to $129 /head per animal, which was the largest since Q2 2023.

Meat & Livestock Australia

China buys 95,000 tons of beef monthly from Brazil

April 2024 was a historic milestone in beef exports for Brazil having shipped 236,842 tons, generating revenues totaling US$ 1.043 billion, points out Agrilink. Leading the list was China, trailed closely by the United Arab Emirates and Hong Kong, which experienced a substantial 38.9% surge in imports compared to March 2024, driven by increased demand for beef offal.

Year-to-date statistics reveal a robust performance in Brazilian beef exports, with shipments reaching 835,328 tons, reflecting a 37,2% increase compared to the corresponding period in 2023. Revenue also witnessed a substantial rise of 29.5%, from US$ 2.8 billion to US$ 3.68 billion. Fresh meat accounted for the lion’s share with 88% of total overseas sales, followed by offal at 7.09%, and processed meat at 3.7%.

Antônio Jorge Camardelli, Executive President of the Brazilian Association of Meat Exporting Industries (Abiec), highlighted the continued robust demand from China, which consistently imports an average of 95 thousand tons per month, reaffirming its status as a key partner for Brazil. However, Camardelli also underlined the prominence of other markets contributing to the year’s increased export volumes.

Throughout 2024, the United Arab Emirates showed remarkable growth in beef purchases, tripling its acquisitions compared to 2023, with shipments totaling 64,787 tons in the first four months of the year, with revenues of US$ 298.2 million. Similarly, exports to Algeria amounted to 20,287 tons, and US$ 92.7 million in revenue, while shipments to the Philippines stood at 19,411 tons, and US$ 68.03 million. Brazilian farmers and meat processors are confident of further burgeoning market opportunities in coming months.

MercoPress

Morrisons Faces Backlash Over New Zealand Lamb Trial

Morrisons has come under fire from farmers as it trials the sale of New Zealand lamb in 39 of its stores, moving away from its previous commitment to sell 100% British lamb. The supermarket chain cited customer demand for cheaper prices as the reason behind the decision. “The blunt commercial reality is that New Zealand lamb is cheaper to source,” Morrisons said in a statement, while assuring that its butchers’ counters will continue to offer British lamb.

The National Farmers Union (NFU) expressed disappointment, highlighting that the British livestock industry is already under pressure. NFU livestock board chair David Barton noted that New Zealand lamb is “produced to potentially lower standards” and hoped the trial would be temporary. He emphasized the importance of local sourcing to maintain food production and safeguard food security in the UK.

The National Sheep Association (NSA) also voiced frustration, stating that the decision contradicts the principles on which Morrisons has built its reputation among the farming community. Despite the backlash, Morrisons defended the trial, stating it followed an “extensive exercise” listening to customers who wanted more affordable lamb options year-round. The supermarket added that New Zealand lamb would be clearly labelled, allowing customers to make an informed choice.

Faarea Masud | BBC News

Australian exports stay firm as global landscape shifts

Beef

Beef exports lifted 46% from April 2023 to 113,431 tonnes. This is the largest beef export volume for April since 2015, and the second highest on record.

Exports lifted in most major exports markets, with the United States remaining the largest beef market with exports rising 127% from last year to 27,257 tonnes.

Large increases were also seen in several smaller markets across South-East Asia and the Middle East and North Africa (MENA) region. Exports to Thailand more than doubled to 2,141 tonnes, while exports to Saudi Arabia lifted 235% to 1,602 tonnes.

The only major market where exports dipped was for China, where volumes eased 11% compared to last year to 14,888 tonnes. Between considerable increases in exports to smaller markets and a slight fall in exports to China, Australia’s beef exports are now the most diversified they’ve been since 2016; exports outside of Australia’s top four markets have made up 25% of the total in 2024 so far, compared to 17% for the first four months of 2023 and 15% in 2022.

Sheepmeat

Lamb exports rose 41% from April last year to 31,318 tonnes, while mutton exports rose 20% to 18,913 tonnes. This is the largest April export figure for lamb, mutton, and overall sheepmeat exports on record, following very strong export totals in February and March.

The United States remained the largest market for Australian lamb exports, while mutton exports to MENA lifted 144% from last year to 5,853 tonnes, displacing China as our biggest mutton market for the month.

Growth in mutton export volumes was observed across the entire MENA region, but especially in the Gulf States; exports to Saudi Arabia rose 153% to 1,956 tonnes, exports to the United Arab Emirates lifted 28% to 804 tonnes and exports to Qatar lifted a massive 501% to 765 tonnes.

Market access update

On Friday last week, Brazil declared itself free of foot-and-mouth disease ‘without vaccination’. This is a designation that would grant Brazil market access to several key beef markets, if the disease-free status is accepted by the World Organisation for Animal Health (WOAH) and importing countries.

Over the past decade Brazil has become the world’s largest beef exporter by volume, accounting for around 25% of global trade in 2023. Its exports are heavily geared towards China, where it has market access, and its disease status prevents exports into Japan and South Korea.

Fortunately for Australian exporters, Australia’s suite of free trade agreements (FTA) gives our beef a comparative advantage in global markets regardless of technical market access. In 2026, Australia’s FTA with South Korea will give us a 35% tariff advantage on most favoured nation (MFN) (baseline) trading terms, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which both Australia and Japan are signatories, will give Australia an 18% tariff advantage over MFN trading terms.

MLA

Australia to ban controversial live sheep exports by sea from May 2028

SYDNEY, May 11 (Reuters) – The Australian government announced on Saturday that it will ban live sheep exports by sea starting from May 2028, fulfilling a long-standing pledge to end a practice that has faced significant opposition from animal welfare advocates.

Agriculture Minister Murray Watt stated, “We are giving certainty to sheep producers and the supply chain by legislating the date.” This move aligns with the Labour government’s commitment to phase out the controversial practice, despite resistance from farm groups who argue that the ban will lead to job losses and harm farming communities.

To support those affected by the industry wind-down, Watt announced a transition package worth A$107 million over five years. This package aims to assist sheep farmers and others impacted by the ban. “We are putting support on the table now so that people can start planning and acting now,” the agriculture minister added.

The legislation to enforce the ban will be introduced during the current term of the federal parliament. It is important to note that the phase-out does not apply to other livestock export industries, such as live cattle exports, nor does it affect live sheep exports by air.

Reuters

Irish Cattle Trade & Prices w/e April 28th 2024

Irish Cattle Trade & Prices – April 2024 Market Update

This week’s figures show continued strength in Irish cattle trade & prices April 2024, supported by rising throughput and firm product prices.

Processor quotes improved for steers to €5.15–€5.20/kg, while heifers fetched €5.20–€5.25/kg. Young bulls remained steady at €5.30–€5.40/kg for R grading animals under 24 months. Cow trade also held up well — O grading cows at €4.60/kg, with R grading top-quality cows fetching €4.70–€4.80/kg.**

Throughput is slightly higher than last year**, with 33,164 cattle processed during the week ending April 28, 2024, bringing year-to-date throughput to 596,422 head—a 2.8% increase over the same period in 2023. Prime cattle numbers remain strong, tallying 423,905 head, up 2.7% YoY. Cow throughput rose significantly by 12.5%, totaling 146,167 head.

European & UK Live Trade Prices

On R3 carcass pricing, Ireland’s average was €5.21/kg, slightly behind the previous year’s €5.27/kg. Across Europe, R3 young bulls held steady at €5.02/kg, while Great Britain showed modest gains with R3 steer prices rising to €5.70/kg (approx. £4.89/kg).

Bord Bia

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