August 31, 2007
August 31, 2007 - Prime lamb producers in Australia are still in the grips of one of the worst droughts ever, suffering low prices, high costs and poor incomes. However, the future for the industry looks bright, providing the drought breaks this spring.
Strong demand for lamb, both in Australia and around the world, combined with constrained Australian and global lamb supplies are set to trigger a recovery in lamb prices and lamb producer incomes once the drought breaks, according to Meat and Livestock Australia's 2007 Sheep Industry Projections Mid-year Update.
However, Australian lamb supplies are set to fall by more than 10 percent from spring 2007 through to winter 2008, as a consequence of the poor breeding season. Hence, the improvement in lamb incomes will initially come from better lamb prices and quality and lower drought-related expenditures.
While further follow-up rains are needed across almost all prime lamb areas, the seasonal outlook for the second half of 2007 and into 2008 is vastly improved from 12 months earlier.
Providing the drought breaks, the strong positive sentiment among the industry is expected to see lamb production grow steadily beyond 2008, allowing for expansion in both domestic consumption and export volumes. The expansion is likely to be slower than anticipated prior to the severe 2006-2007 drought because of the depletion of the core Merino breeding flock. Reprinted in part from Meat and Livestock Australia