Lamb slaughter rallied in August, and as noted in these pages, we saw some of the strongest slaughter levels for the year to date. Unsurprisingly the strong lamb slaughter has translated into record lamb exports for this time of year, and mutton also hit a peak.
It would seem lamb processors managed to move the overflow of old season lambs during the winter. Figure 1 shows lamb exports for August moved back over 26,000 tonnes swt for just the second time this year.
August lamb exports were up 4% on July, 14% on August 21 and 32.5% on the five year average. We can see in figure 1 that August is usually close to the lowest export month for the year, not the highest.
Driving the increase in total exports was a solid lift in the US market. Lamb exports to the US gained 9% on July, and 15% on August last year, an indication that demand is still solid in our largest export market.
Lamb exports to China hit their strongest level for the year in August. While still down on last year, lamb exports to China have gradually gained ground every month, posting an improvement on the five year average for the first time in 2022.
Historically mutton exports do rise in August, and in figure 2 we can see they followed the usual trend. The 130% increase on last year was driven by a large jump in exports to China. Like lamb, mutton exports to China hit their strongest level for the year, up 125% on July, and 167% on August last year.
Lamb and mutton export value data is only up to June, but we can see in figure 3 that on a ¢/kg basis lamb reached new heights. There is plenty of volatility in export values, and if we average out the lows of May with highs of June, values are not much higher than earlier in the year.
Still $13-14 per kilo in export value is well ahead of the carcase weight values being paid at saleyards, even with the conversion to shipped weight.
What does it mean?
Despite the counter seasonal strong supply, export markets continued to soak up the extra lamb and mutton in August. Improving volumes to China are encouraging for continued strong export values, and bodes well for lamb and sheep prices if and when processing bottlenecks are removed.
Key Points
- Lamb exports in August were the strongest on record for the month, and well up on last year.
- Mutton exports were also very strong, driven in part by improving exports to China.
- Export values remained strong to June, and are positive for prices.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: MLA
