Shrinking Flock Threatens Australian Lamb Strength

Although the Australian lamb industry's high sale-yard prices, resilient supplies and strong export demand in the first half of 2009 are forecast to continue, this performance has been marred by a further substantial fall in the national flock, restraining potential growth in lamb supplies and affecting Australia's ability to capitalize on the growing global demand for mutton and live sheep, according to Meat and Livestock Australia's (MLA) 2009 Sheep Industry Projections-Mid-Year Update.

This year's exceptional lamb and sheep prices are the result of strong export and domestic demand, tighter supplies from New Zealand and a lower Australian dollar.

Lamb producers have generally enjoyed improvements to their bottom line over the past year with higher sale prices and lower costs, said Kara Jones, MLA sheepmeat analyst.

Although strong demand has been welcome, exporters and processors have discovered the escalating lamb and sheep prices, reduced sheep turnoff, weak skin prices and climbing Australian dollar challenging.

The decline of the national sheep flock, however, which fell another 7 percent in 2008-2009 to 72 million head, the lowest level since 1916, gives real cause for concern. The flock reduction means Australia may not be able to satisfy the demand for both mutton and live sheep exports, Jones added, and there is a risk lamb production could be reduced in the future.

Reprinted in part from MeatPoultry.com