Dry set to affect sheepmeat supply in 2019

Dry conditions will continue to affect sheepmeat supply for 2019

Farm Online News
Many producers have been forced to continue destocking as they wait for a turnaround in the weather.

Many producers have been forced to continue destocking as they wait for a turnaround in the weather.

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Lamb slaughter forecast to reach its lowest level since 2012.

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Poor conditions that impacted 2018 are set to continue to affect Australia’s sheepmeat supply in 2019. 

According to Meat and Livestock Australia’s (MLA) 2019 sheep industry projections lamb slaughter is forecast to reach its lowest level since 2012.

Lamb slaughter is forecast to decline seven per cent in to 21.2 million head, while sheep slaughter is predicted to be down 16pc, to eight million head, underpinned by substantial drops in marking rates and the culling of large numbers of ewes and ewe lambs.

After an estimated decline already of over four million head, or 6.1pc, to mid-2018 the national flock is forecast to experience a further decline of 3.7pc by mid-2019 to 65.3 million head.

This comes as many producers are forced to continue destocking as they wait for a turnaround in the weather.

The significantly reduced breeding flock and widespread rainfall decencies, suggest fewer joinings than usual and a continuation of below-average lambing rates experienced in 2018.

MLA’s market intelligence manager, Scott Tolmie, said many producers will be hoping for some consistent rainfall this year to help alleviate some of the pressures associated with high feed costs.

He said the current Bureau of Meteorology (BOM) three-month outlook does not point to an immediate reprieve from the current hot and dry conditions.

“Considering the substantial moisture deficiencies apparent in many regions, particularly NSW, any improvement in conditions would require consistent above-average rainfall over the coming months,” Mr Tolmie said.

He said both sheep and lamb carcase weights were impacted by the tough conditions and high cost of feed in 2018, and this is expected to continue in 2019 with feedstocks depleted and feed demand to remain high until conditions improve.

“The average lamb carcase weight is expected to remain around 22.4kg/head in 2019 while the national average sheep carcase weight is expected to stabilise in 2019, at 23.6kg/head,” Mr Tolmie said.

“A fall in slaughter and carcase weights is driving the seven per cent forecast decline in lamb production for 2019 to 475,000 tonnes carcase weight (cwt).

“Mutton production will likely see a steeper drop of 16pc to 188,000 tonnes cwt.”

Looking beyond the current rainfall deficiencies, a variety of indicators point towards 2019 continuing to be a positive year for sheepmeat prices.

“Fortunately, robust international demand and a low Australian dollar will continue to support Australian exports and, in turn, domestic saleyard prices,” Mr Tolmie said. 

“Records were broken in 2018 as markets around the world competed strongly for Australia's high quality sheepmeat.

“The expectation for supply, and consequently exports, to decline in both Australia and New Zealand will likely see global competition for sheepmeat intensify in 2019.

“The conditions that drove strong prices for well-finished stock last year look likely to remain in place in 2019, particularly while conditions remain dry.

“Sheepmeat supply out of Australia and NZ – which account for more than 70pc of global trade – has been unable to keep pace with strong global demand, led by China in 2018.”

In 2018, Australian lamb exports increased seven per cent year-on-year to a record 267,000 tonnes shipped weight (swt), while mutton shipments jumped 23pc to 180,000 tonnes swt.

“Reflecting a reduced flock and limited supply, 2019 lamb exports are forecast to contract 8pc to 247,000 tonnes swt, while mutton is projected to fall 16pc to 151,000 tonnes swt,” Mr Tolmie said.

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