We have been following the increase in lamb exports to the Middle East with interest over the last twelve months or so. Increased slaughter, and stronger exports to a market that takes lighter lambs, saw slaughter weights fall in the December quarter, but interestingly, they recovered in March.
While
export data comes out monthly, and we have Meat and Livestock Australia’s (MLA)
weekly slaughter data showing us trends, we only receive production data
quarterly. Lamb production data is
important as we can divide it by official slaughter, and get an average carcase
weight.
Carcase
weight trends can give an insight into how producers are reacting to the market
and seasonal conditions, and importantly, tell us how supply might react going
forward.
Figure 1
shows lamb carcase weights recovered in March, although this was largely in
line with seasonal trends. The December
quarter saw carcase weights hit a three-and-a-half-year low on the back of the
dry spring, and increased exports to the Middle East.
In the
March quarter average carcase weights gained 1kg to 24.4kgs per head. Figure 1 shows that the March carcase weight
was almost the same as last year, but down on 2022. The fact that average weights were similar to
2023 when Middle East exports were still running hot, tells us that there were
plenty of heavy lambs coming through to lift average weights.
Better
prices in the March quarter, along with a premium in the heavy trade and heavy
lamb markets encouraged supplementary feeding of lambs to maximise income.
Figure 2
shows the increase in March didn’t manage to reverse the falling trend shown by
the 12-month average trend line.
Historically the June quarter sees stronger carcase weights again. If we see this the downward trend might have
been reversed.
Sheep
carcase weights follow a similar trend to lamb as shown in figure 3. The rising trend in general is likely due to
heavier meat breeds replacing lighter merinos, with obvious impacts from good
and bad seasons.
While lamb
carcase weights were up in March, sheep weights were down on the December
level. The downtrend of the last 3 years
is seemingly steadying for sheep as well as lamb but will remain heavily
reliant on seasons.
What does it mean?
We are still waiting for the exit of light lambs from the December quarter to take effect, but we now know that plenty of those lambs were extra lambs dropped in a record production year. If the Middle Eastern market remains strong, we might have seen the peak of lamb slaughter weights, but this is somewhat being offset by higher bottom weights for supermarket and export grids.
Have any questions or comments?
Key Points
- Lamb slaughter weights show how demand trends are moving, and producers react to conditions.
- Lamb carcase weights bounced back in the March quarter, from a very low December.
- More heavy lambs seem to be partially offsetting increases in exports to the Middle East.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: MLA, ABS, Mecardo