Sheep meat demand outpacing supply

31 Jul, 2015 02:00 AM
Department of Agriculture and Food senior research officer Kimbal Curtis.
I think it is a good time to be in the sheep industry.
Department of Agriculture and Food senior research officer Kimbal Curtis.

DEMAND for WA sheep meat is growing faster than supply can meet it, according to Department of Agriculture and Food senior research officer Kimbal Curtis.

He said rising global sheep meat consumption was a benefit to producers as it was helping drive prices for WA sheep.

"There is certainly optimism out there," Mr Curtis said.

"Price and supply are rising and exports are up nationally and the demand is strong.

"I think the demand will continue for some time, particularly in the Middle East and China.

"I think it is a good time to be in the sheep industry, as the demand is straining supply and the flock is stable but may slide a little.

"I think the prices are here to stay."

Mr Curtis presented the key message at the Regional Sheep Updates forums held across WA this week.

He discussed industry data and trends outlined in the latest Sheep Notes publication.

"Over the past two years, both supply and price have increased significantly suggesting that growth in demand is outstripping growth in supply," Mr Curtis said.

"With the strong prices and strong demand, the outlook is positive.

"Lamb production is certainly worth evaluating as part of the farm business."

Mr Curtis said there seems to be a "tug of war" between the rebuilding of the flock versus the strong demand for sheep for meat and live export.

"It is difficult for us to get to the levels prior to 2010," he said.

"Simply because we don't have the sheep in the bank that we can keep drawing on.

"What we do have is improved performance, better reproduction, better marking rates, survival, and we are growing the sheep more to get better carcase weights, which is leading to increased meat production and meat export."

Mr Curtis said the flock appears to have levelled out at between 14 to 15 million sheep and lambs in WA, and was stabilising in the rest of Australia.

"We have been selling down the flock over the past few years,'' Mr Curtis said.

"In the five years until 2010 we were selling about 2.2m extra sheep a year than we had.

"That has levelled out, so the people who were reducing their flock and selling out seemed to have exited or have stopped reducing.

"There has been a change in flock composition over time as industry transitions from a wool focus to a dual product - wool and prime lamb - industry.

"This has resulted in a decreased proportion of wethers while the proportion of ewes and lambs increased. WA now has about 8m breeding ewes."

In the past year the total turn off of sheep and lamb slaughtered has come back a bit.

"We are forecasting this as we don't have the final figure for June slaughter, but I am expecting we will hit about 3.6m head rather than 3.9m last year,'' he said.

"Live export is virtually unchanged, it's purely just the supply has dropped which has caused a small decline in the slaughter."

Department officer and Sheep Notes co-author Kate Pritchett said WA exported sheep meat to more than 50 countries.

"Initial indicative export data for the 2014/15 financial year show this was led by five markets which took 55 per cent of exports," Ms Pritchett said.

"These included China (22pc), Saudi Arabia (10pc), the United Arab Emirates (8pc), the United States (7pc) and Malaysia (7pc)."

Ms Pritchett said in 2013/14, 1.8m sheep were exported from WA, with almost all going to the Middle East.

"In 2014-15, live export volumes are on track to reach a similar level, with Kuwait remaining the largest market," she said.

Sheep Updates is part of the $10m Sheep Industry Business Innovation project, led by the department and made possible by Royalties for Regions funding.

For wool, in 2014/15, the Western Market Indicator (WMI) averaged 1132 cents, 34 cents higher than in 2013/14.



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