Lamb exports to the US have recovered since the weaker levels of 2023. In terms of volume the US has never taken more of our lamb, and their share of our exports is strong. As such it’s worth looking at US lamb markets, to see if we have reached the limit for our lamb values.
For the
first half of 2024, the US has imported, on average, 7.2 thousand tonnes of
Australian lamb. This is easily the
highest on record, surpassing the previous high, set in 2022, by 18%.
The US
share of our exports sits at 23.3% for the year to date. This is lower than 2021 and 2022 when the
share was 26%. With such strong
slaughter and supply, it’s not surprising to see a smaller share for the US,
with the Middle East taking 27%, but operating at the other end of the weight
range.
With the US
being such an important export market, it makes sense to keep an eye on what is
happening in lamb markets over there.
Figure 1 shows the Domestic Lamb Cutout Value for the US. The United States Department of Agriculture
(USDA) collect data on the value of all cuts of lamb and add to give the value
processors are receiving from each animal.
Imported
lamb competes with domestic lamb, so knowing what lambs are worth in the US can
give an indication of what importers might be willing to pay. Figure 1 shows the Lamb Cutout has been
around 6.5% higher than last year in July, but well below the heady days of
2021 and 2022.
If we
convert the lamb cutout value of 548US¢/lb to our terms, it equates to $18.20/kg,
having been steady for much of the year.
Australian lamb is exported to the US as cuts, and the USDA reports the
price of these as well. Frozen legs of
lambs are stronger than last year, while most other cuts are similar or
slightly cheaper. All cuts are well
below the prices of 2022.
If we look
at the Eastern States Trade Lamb Indicator (ESTLI) in US dollar terms in Figure
2, we can see that July has been trading at similar levels to 2022.
What does it mean?
Running a comparison with 2022, we’ve got US lamb prices much weaker, yet Australian lamb saleyard values are at a similar level in both US and local terms. Anecdotally we’ve been hearing that 900¢ is about the limit for export processors, and this appears to be fitting nicely with retracement in prices last week.
Where prices head from here depends on supply, but it looks like we might have found the top of the range for now.
Key Points
- Lamb values in the US are higher than last year, but well below 2022.
- The ESTLI in US terms is at similar levels to 2022, despite lower export values.
- The retracement in saleyard values indicates we might have found lamb price limits.
Click on figure to expand
Click on figure to expand
Data sources: USDA, MLA, RBA, Mecardo
