The value of Australia’s sheep meat exports has increased 24 per cent year-on-year, driven by the value of lamb exports increasing by more than 20 per cent when compared with 2016 figures, according to Rural Bank’s latest Australian Sheep Update.
Compiled by Rural Bank’s specialist insights team, the update reveals the value of sheep meat exports is trending higher in 2017 due to strong gains in export unit prices and a small increase in export volumes.
This was certainly the case with the Chinese market, where improved unit prices and a 31 per cent increase in volume has led to the value of Australian sheep meat exports tracking 61 per cent higher in 2017.
Elsewhere, the value of lamb exports to South Korea are more than double this time in 2016 – as lamb skewer outlets continued to grow in popularity in that country – while export value to the vital US market also grew eight per cent year-on-year.
Andrew Smith, General Manager Agribusiness for Rural Bank, said livestock producers across most parts of Australia had experienced a difficult few months due to the driest winter since 2002, but the outlook for the rest of 2017 is more positive.
“With average to above average rainfall forecast for the rest of 2017 and the Bureau of Meteorology expecting October 2017 to be wetter than average in eastern states and South Australia, things are looking good for producers,” Mr Smith said.
“Domestically, we saw high lamb prices until June 2017 but dry conditions since then have seen many farmers turn-off stock.
“Lamb production from May to August 2017 was 10 per cent higher than the same period in 2016 which resulted in volatile pricing from July through to September 2017. Encouragingly though, prices have since steadied, with average prices trending just 1.7 per cent below what was earned by producers in the July to September 2016 period,” Mr Smith concluded.
According to the new update, in the last five years, the National Trade Lamb Indicator (NTLI) has averaged an eight per cent drop in October and a two per cent drop in November due to increased supply during spring. Consequently, the update anticipates that an average seasonal decline would see the NTLI fall to an average of 545c/kg in November 2017.
The new Ag Answers update also revealed the unusually dry winter could have an adverse knock-on effect on lamb growing rates, which in turn, could result in lambs finishing later than traditionally expected.
Source: Rural Bank