March 15, 2004
Mar/Apr 2004 -- Trade, drought and BSE were on the minds of an international sheep panel representing Australia, New Zealand and Canada at the American Sheep Industry convention in Sacramento.
Ian Feldtmann, president of the Sheepmeat Council of Australia, said his country is committed to a memorandum of understanding with New Zealand and the United States that seeks to increase the U.S. lamb market for all three countries. Under the MOU, he said, they would also share market intelligence, collaborate on research and development and engender producer-to-producer dialogue.
"We're committed to work together to grow the demand in the U.S. market," said Feldtmann. "There's a great potential in the United States, and we want to build on the outcome of the inaugural Tri-Lamb meeting."
He was referring to talks held last year in San Angelo, Texas, and again in Washington, D.C., among the three countries focusing on raising lamb demand in the United States. The next meetings are scheduled to be held in Australia late this year.
Feldtmann said the "worst drought in 100 years" has shrunk Australia's sheep inventory to 99 million head, down 7 million. Despite the reduced supplies -- an 18 percent reduction in lambs on hand at June 30 last year -- his country has seen a strong resurgence in domestic consumption, thanks to Australia's "We Love Our Lamb" campaign. However, he added, increased retail prices may slow the domestic growth.
Thirty-five percent of Australia's sheep meat is exported, with the United States accounting for 40 percent of all exports. But Feldtmann said growth of the live animal export market has become important to Australian producers because the money comes mostly back to them.
In New Zealand, drought has played a part in a 32-percent decline in sheep numbers, which now stand at 35 million head, said Andrew Burtt, Meat New Zealand's regional manager for North America.
Burtt said he anticipates structure changes in the industry following New Zealand's meat industry referendum conducted last year on future levies. The referendum generated a 37-percent voter turnout covering 62 percent of national stock numbers.
"There was a resounding 'yes' vote on all counts, both in one-for-one votes and in weighted stock numbers," said Burtt. "This yields a single organization funded by check-offs on sheep meat, wool, beef and goat meat."
(The sheep meat vote was 76 percent in favor on a weighted-stock number basis and 72 percent in favor on a one-for-one vote. The numbers were 72 percent and 68 percent for wool, 77 percent and 74 percent for beef and 67 percent and 67 percent for goats.)
The proposed expenditures for the organization are $38.4 million, with a little over two-thirds for meat and a little less than one-third for wool. Of the funding, $18.7 million would be earmarked for research and development, $9 million for market development, $3.1 million for trade policy issues, $2.1 million for other issues, $1 million for skills and education, $2.4 million for administrative and $900,000 for statutory costs.
Burtt alluded to discussions with representatives from the United States, Europe, Canada and South America over what he called the "Lamb Innovation Network." It would address such topics as consumerism, science and technology, production and processing, cuisine and culture and foodservice and retail.
"We're looking for partners committed financially and otherwise," said Burtt. "Many of those approached have agreed in principle to participate."
Indeed, Burtt told U.S. producers that New Zealand tends to focus on world markets and prices, given that 80 percent of his country's sheep meat is exported. Even though New Zealand has only 7 percent of world sheep-meat production, its exports comprise 55 percent of world sheep-meat trade and 75 percent of lamb-meat trade.
As for Canada, its relatively small sheep industry has suffered from the discovery that a BSE-infected cow from Canada ended up on a U.S. dairy farm, which closed the U.S.-Canada border to live animal trade.
"We import as much processed meat as we export live animals," said Randy Eros, chairman of the Canadian Sheep Federation. "But if the border stays closed much longer, we'll have to alter our infrastructure by increasing our slaughter capacity. We have to figure out what to do with 130,000 lambs, a small part of U.S. production but a large segment of Canada's."
Eros said Canada started working on a sheep identification program in 1999, modeling it after Canada's cattle program. In January this year, it launched the Canadian Sheep Identification Program, or CSIP.
"Ours is an industry-driven, producer-designed program," said Eros. "Our focus is to keep it simple and keep it affordable."
Under CSIP, approved ear tags must be applied to all sheep before they leave the farm. Producers must track with written records all sheep that enter their flock for breeding purposes regardless of age and all sheep 18 months old or older leaving the farm. Imported animals must have a tag within seven days of arrival.
Eros said Quebec has chosen to use a double tag system in which all sheep are tagged within 30 days of birth and all movements must be recorded, providing a 48-hour trace-back capability.
Eros said that as of Jan. 1, 2003, Canada had 975,600 head of sheep on 13,232 farms, representing 5.4 percent of all farms in Canada. The country has seen a shift in production to the east, prompted by drought in the west and the fact that most of the lamb is consumed in the east. He added that lamb consumption has increased 25 percent in Canada to an average of 2 pounds per person, per year.