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2015 Lamb Markets to be 'Subdued'

27 April 2015

GLOBAL – A subdued 2015 lamb market outlook hinges on supply being tapered by rains coming to Australia and New Zealand.

This is according to Meat and Livestock Australia (MLA) analysts who say that the weather will be key in determining supply.

Meanwhile, there are distinct difficulties on the demand front, are namely; a well-stocked US inventory, a sluggish Chinese economy and uncertainty in Europe. 

“The first demand concern is in the US, where the slow moving product from cold stores has seen lamb stocks (from all countries) up 40 per cent year-on-year,” says MLA.

“However, there is a lag on this measure and stocks are likely to have been drawn down over Easter – a peak demand period. Secondly, imported Australian and New Zealand product in China is comparatively more expensive than domestic product, slowing trade.”

At this juncture, it looks like lower prices are likely at the farmgate. Beef and Lamb New Zealand's overview is that in market prices will be "slightly down". 

In China, demand growth will outpace the rate of production expansion, although MLA warns that consumers are resistant to high prices.

And if rain does come, there could be lower supply this year if predictions of lamb and sheepmeat production falling in New Zealand and plummeting in Australia come true.

After consecutive drought years, much of Australia has had rain, expected to continue into the next three months across the majority of the country, particularly the south and west.

New Zealand’s North Island drought period is expected to give way to precipitation, allowing its sheep producers to attempt restocking amid a time of dairy conversions, another factor in recent high production.

Australia’s mutton slaughter is tipped to drop 27 per cent and lamb by 12 per cent while New Zealand lamb production drops 2.6 per cent.

But this will only happen if rains arrive, stressed Beef and Lamb New Zealand in its mid-season outlook for 2015.

Beef and Lamb New Zealand said: “The 2014-15 export lamb slaughter is forecast to decrease 2.6 per cent from the previous season to 19.8 million head.

“This largely reflects an increase in non-trade hoggets retained with the flock expected to slightly recover in the year to 30 June 2015. However, continued dry conditions could see lamb production lift.”

EU Production Stable

European production will be unchanged but Europeans will continue eating less lamb.

Beef and Lamb New Zealand forecast say a drop in flock numbers will be countered by higher carcass weights.

They highlighted Spain’s “sharp decline” after an outbreak of Bluetongue resulted in large scale vaccinations and culling.

Consumption will decrease further as higher exports, largely to Asia, and lower imports combine to shorten supplies.

Michael Priestley

Michael Priestley
News Team - Editor

Mainly production and market stories on ruminants sector. Works closely with sustainability consultants at FAI Farms.

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