Light lambs still headed to the Middle East

Sheep in an Australian field in rural NSW on a foggy morning

It’s been four months since we had a look at the much-talked-about Middle Eastern lamb export market. With the export data for the first two months of the year, along with slaughter weights for the December quarter, it’s time to again assess how many lambs have exited the market early.

Figure 1 shows lamb exports to the Middle East have continued their strong form early in 2024.  While not quite up to the highs of November, we have sent 122% more lamb in January and February than at the same time last year.

For the 2023 crop of lambs, by which we have a rough measure of sales starting in July, lamb exports to the Middle East have been up 116%.  In terms of tonnage, Australia has exported 30,618 tonnes more lamb to the Middle East since July. 

Since 2022 the Middle Eastern market share has grown from 13% to 20.6% in 2023, and 27% for the first two months of 2024.

To work out how many extra lambs this was, we need to take a look at lamb slaughter weights.  Figure 2 shows lamb slaughter weights hit a two-and-a-half-year low in 2023.  The December average slaughter weight was 23kgs cwt, which is well down on most of the 2020-2023 quarters, but it is strong compared to pre-2020 levels.

While we can’t know the average weight of lambs going to the Middle East, we know that they are among the lightest lambs marketed.  If we work on 19kgs cwt, the extra lambs exported to the Middle East equates to 1.61 million.  To put this in context Meat and Livestock Australia are forecasting lamb slaughter this year to hit 26 million head.

Figure 3 shows that lamb slaughter hasn’t slowed down early in 2024, with the slaughter space opened up in November and December, remaining in place this year.  It is interesting to see that lamb supply hasn’t slowed with the big numbers exiting early.

In fact, lamb slaughter has been up 18% on last year, or 532,000 head, based on MLA’s weekly data.  MLA is forecasting a 5% increase in total lamb slaughter this year, which equates to 1.2 million head.  We can run some extremely basic calculations on this.

With nearly half the forecast yearly increase in lamb slaughter having been achieved already, it means that slaughter will have to slow at some stage.  The red line on Figure 3 shows where average weekly lamb slaughter would have to sit to meet the 26 million head forecast.         

What does it mean?

It’s hard to think lamb slaughter can keep up this pace unless the lamb crop in 2023 was up 15-20% on 2022. This is possible but seems unlikely given what we know from survey data. What’s more likely is slowing lamb slaughter, and this fits with seasonal trends. The question is what sort of impact this has on prices?

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Key Points

  • Lamb exports to the Middle East continue to run hot.
  • Slaughter weights were down in December, due to increased sales of lighter lambs.
  • Strong lamb slaughter early this year should result in slower supply at some stage.

Click on figure to expand

Click on figure to expand

Click on figure to expand

Data sources: ABS, MLA, Mecardo

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