Dandy outlook for Aussie lamb exports to the US

Yankee doodle, outlook for lamb exports to the US just got better

Sheepmeat
ROCKY MOUNTAIN HIGH: A mob of sheep causes traffic problems on a Colorado road in the United States.

ROCKY MOUNTAIN HIGH: A mob of sheep causes traffic problems on a Colorado road in the United States.

Aa

Reduced domestic production in the United States has added another positive to the outlook for Australian lamb exports.

Aa

The already rosy outlook for Australian lamb exports to the key US market has become even brighter with reduced supply from America's domestic producers.

Steiner Consulting Group has prepared a 16-page report for Meat & Livestock Australia looking at US lamb imports and domestic supply.

A survey of Colorado lamb feedlots indicated a worsening supply outlook for US lamb with the number on feed in the state on August 1 estimated at 83,389 head, 37.5pc lower than year-ago levels.

Given that the majority of US lambs are finished within feedlots, this figure indicated less lambs would be coming through to processing plants for slaughter over the coming months, MLA said.

This highlighted the potential risk for domestic supply later in the year and the opportunity for imports to meet holiday demand.

MLA said a tight supply situation within the US should offer favourable price support for Australian lamb exports as the end-of-year holiday season nears, a period of seasonal peak lamb demand.

It said the US has become increasingly reliant on imports to meet growing domestic lamb consumption.

Imported lamb from Australia was up 9.3 per cent for the year-to-August.

MLA said a tight supply situation within the US should offer favourable price support for Australian lamb exports as the end-of-year holiday season neared.

The US market for imported lamb continues to grow, with total imports in 2019 (year-to-July) increasing by 31pc compared with the five-year average from 2014-18.

More than 60pc of total lamb consumption in the US is now imported product with Australia contributing 73pc of the total.

As consumer demand for lamb continued to grow, particularly among millennials and through the foodservice channel, Australia's foothold in the market should provide ongoing opportunities for exporters, MLA said.

The decline in US consumption of local lamb has been a long term trend, likely underpinned by US production systems unable to match their Australian and New Zealand counterparts on efficiency and quality.

But high costs of production, competing farm business enterprises, predation and limited genetic improvements were other factors restricting US production capabilities.

US lambs typically have longer turn-off times and heavier carcase weights (31kg average for 2019), resulting in a fattier product.

Accordingly, the finished US product often offered different taste experiences and cut sizes to lamb from Australia or NZ.

Per capita US consumption has increased over the past eight years after a long period of contraction, hitting about 0.57kg per person in 2018.

Exports from Australia also continued to benefit from a low exchange rate with the US, MLA said.

During the past five years as the Australian dollar has declined against the US, lamb prices in Australia have gradually risen.

However, this price rise isn't apparent in US dollars, helping keep Australian product affordable for overseas consumers.

The story Dandy outlook for Aussie lamb exports to the US first appeared on Farm Online.

Aa

From the front page

Sponsored by