Sheep,In,Farm,Yard

With Meat & Livestock Australia’s Sheep Industry Projections indicating 2024 will be the peak supply for this cycle of flock growth, it will come as no surprise that lamb and mutton exports are set to follow suit. And they aren’t wasting any time, with lamb exports already 27% higher for January-February than the same two months in 2023 - a year in which Australia notched up its highest sheepmeat exports on record.

MLA projects lamb exports to reach 335,000 tonnes shipped weight in 2024, which would be an increase of 3% year-on-year. This is also 25,000 tonnes more than was forecast in their last outlook, released in July 2023. The prediction for lamb exports in 2025 has been scaled back in the latest report, to be lower than both 2023-24, but is expected to reach a new record yet again in 2026, with volumes forecast to be 5% higher than last year. Mutton export forecasts have also been increased for this year and next compared to the July outlook, however, are expected to now drop back in 2026, and be 18% lower than last year’s record 210,000 tonnes.

 

Actual figures are well and truly supporting sheepmeat export expectations so far, with February recording the highest volume for any month on record. Lamb exports for the year-to-date are 24% above the five-year average for the same period, and 27% higher than 2023. Also 27% higher than the average were mutton exports in January/February, and they were 37% higher than year-ago levels. Lamb exports to the US lifted 36% in February, remaining the largest market for lamb at 23% of the share, while China was the main destination for mutton, taking 34%. Total mutton exports were 44% higher than the five-year average in February.

 

The US is the one to watch according to several latest analyses, despite the country taking 16% less lamb year-on-year in 2023. It’s returned to the trade strongly so far in 2024, and while Australian processors are suggesting high lamb inventory in the US is holding buyers back, the latest report from the Steiner Consulting Group in America paints a different picture. Their December monthly update (the latest available) reported total sheepmeat in cold storage in the US in November was more than 25% lower than the five-year average and retail activity on lamb for the last two trading weeks of 2023 was 8% above the average in the US. 

What does it mean?

It is early in the year, but so far, the export volumes are indicating Australia is indeed in for another record amount to be heading offshore. MLA predicts the increased trade with the US and new markets such as Saudi Arabia (which took 161% more mutton year-on-year in February) will keep the export volumes high this year.

These indicators should give the supply chain confidence that the market can handle Australian lamb as supply grows. In turn, this should give producers some improved confidence in the sector, with both heavy and trade lambs expected to increase through June.

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Key Points

  • Sheepmeat exports are trending higher year-on-year and are expected to exceed 2023’s record-breaking volumes.
  • Consumer confidence – a key factor in the global lamb trade – remains lacklustre, but Australia remains in the box seat with ample supply and little competition.
  • The US is the market to watch for 2024, with Australian lamb exports to that market 20% higher than the five-year average for the year-to-date.

Click on figure to expand

Click on figure to expand

Click on figure to expand

Data sources: MLA, DAFF, Rabobank, Mecardo

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