mla sheep industry projections 2010
DESCRIPTION
MLA Sheep and Lamb Analyst, Kara Tighe, outlines the opportunities and challenges for the Australian sheep industry in 2010.TRANSCRIPT
Australian sheep and lamb industry projections 2009
January 2008 Kara Jones
2010 sheep and lamb industry projections
18th February 2010Kara Tighe – Sheepmeat Analyst
Sheepmeat industry developments in 2009
On-farm•
Lamb sale prices up 13%-26% & 40% for sheep in 2009
•
Lamb production up 4%, mutton down 16%
•
Sheep flock down 7% in 2009 & 26% in 3 years
•
Prime lamb profitability increasing & attractive relative to most other enterprises in mixed farming areas
•
Drought receding in many areas
•
Growing evidence of desire to halt flock liquidation & rebuild in some areas
Off-farm
•
Lamb exports up 9% (value up 17%), mutton back 15% (value back 1%), live exports down 15% (value up 1%)
•
Domestic lamb consumption up 1%, expenditure up 10%
Prospects for 2010…
•
Rate of the Australian flock decline to slow to 2% in 2009-10 •
Requires a further 15% fall in sheep turnoff in 2010
•
Limited sheep supply to reduce mutton supply, exports and live sheep exports
•
Lamb production to increase 2%–
Higher lamb slaughter due to favourable
season & shift to prime lambs –
Retention of more ewe lambs to prevent larger increase in lamb supply•
Small rise in both domestic lamb consumption and lamb exports
•
Saleyard
prices to exceed 2009 averages
A poor southern wet season last year (April – November 2009)
Good falls during February…especially in NSW, but needs to be followed up with an Autumn break
For now, the season looks favourable
Drought & shift to cropping sees further sharp falls in sheep flocks in 2008-09
WA VIC NSW SA TAS QLD
0
0.5
-0.5
-1
-1.5
-2
-2.5
net change million head (June 2009 compared to June 2008)
-5%, to 25 million head
+4%, to 4.1 million head
+1%, to 10 million head
-5%, to 2 million head
-12%, to 14.8 million head-12%, to 15.5
million head
Slower rate of flock decline expected in 2010
Source: ABS, MLA forecasts
90 92 94 96 98 00 02 04 06 08 10f 12f 14f
31 March until 1999, 30 June from 2000
0
50
100
150
200million head
f = forecast
Another sharp decline expected in sheep turn- off
Source: ABS, MLA forecasts
90 92 94 96 98 00 02 04 06 08 10f 12f 14f0
5
10
15
20
25million head
slaughter live exports
f = forecast
By extension, mutton exports to fall
Source: DAFF, MLA forecasts93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10f
0
50
100
150
200
250'000 tonnes swt
Africa North America Middle East Asia other
f = forecast
Source: NLRS
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec50
100
150
200
250
300
350A¢/kg cwt
2010 2009 2008 2004-08 average
National average sheep saleyard prices
January 2010 national mutton prices averaged 315 ¢/kg cwt
↑72% on January 2009
↑104% on 5-year average (2004-2008)
Shift from wool to lamb production
92-93 94-95 96-97 98-99 00-01 02-03 04-05 06-07 08-09e150
200
250
300
350
400
450'000 tonnes cwt lamb
200
300
400
500
600'000 tonnes cln wool
lamb production wool production
Source: ABS, AWEX
98-99 00-01 02-03 04-05 06-07 08-09 10-11f 12-13f0
10
20
30
40
50
60million head
breeding ewes lamb slaughter
Source: ABS, MLA forecasts
Slow growth expected in lambs as ewe flock stabilises
↑2%/year
↑1%/year
Lamb slaughter
Breeding ewe flock
Shift to prime lambs sees increased ewe proportion of the flock & increased lamb turnoff rate
Source: ABS, MLA forecasts
94-95 96-97 98-99 00-01 02-03 04-05 06-07 08-09 10-11f 12-13f 14-15f20
30
40
50
60
70%
breeding ewes as a % of flock lamb slaughter as a % of breeding ewes
Lamb production to increase 2% in 2010
Source: ABS, MLA forecasts
90 92 94 96 98 00 02 04 06 08 10f 12f 14f0
100
200
300
400
500
600'000 tonnes cwt
15
17
19
21
23
25kg/head
production carcase weight
f = forecast
Surge in both domestic (10%) & export value (20%) for lamb in 2009
Source: ABS, DAFF, MLA estimates
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09e0
500
1000
1500
2000
2500domestic A$ million
0
200
400
600
800
1000
1200export A$ million FOB
domestic expenditure export value
Local consumption for lamb to continue upward trend in 2010 and beyond
Source: ABS, ABARE, MLA forecasts
92 94 96 98 00 02 04 06 08 10f 12f 14f0
50
100
150
200
250
300'000 tonnes cwt
0
300
600
900
1200
1500A¢/kg retail weight
consumption retail price
f = forecast
Australian lamb exports to grow 2% in 2010
Source: DAFF volumes, ABS values, MLA forecasts
90 92 94 96 98 00 02 04 06 08 10f 12f 14f0
50
100
150
200exports '000 tonnes swt
0
10
20
30
40
50% of production
exports % production
f = forecast
NZ lamb exports to recover 3.4% in 2009-10
01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10fSeptember year
200
250
300
350'000 tonnes swt
Source: Meat & Wool NZ
Lamb exports to the US - up 2%, to 39,000 tonnes swt
Source: DAFF volumes, ABS values, MLA forecasts
92 94 96 98 00 02 04 06 08 10f0
10
20
30
40
50'000 tonnes swt
0
50
100
150
200
250
300
350A$ million
volume value
f = forecast
Lamb exports to the Middle East - up 8%, to 38,900 tonnes swt
Source: DAFF volumes, ABS values, MLA forecasts94 96 98 00 02 04 06 08 10f
0
10
20
30
40'000 tonnes swt
0
50
100
150
200A$ million
volume value
f = forecast
Lamb exports across other markets in 2010
China/Hong Kong
EU Pacific SouthEast Asia
Canada SouthAfrica
0
5
-5
-10
-15
-20
% change 2010 on 2009
24,900 tonnes swt
14,300 tonnes swt
11,500 tonnes swt
7,200 tonnes swt
5,200 tonnes swt
2,400 tonnes swt
Source: DAFF, MLA forecasts
Lamb prices to maintain momentum
00 01 02 03 04 05 06 07 08 09 10f0
100
200
300
400
500A¢/kg cwt
Source: MLA's NLRS
Slaughter lamb farm incomes to continue improving in 2009-10
Source: ABARE
90-91 92-93 94-95 96-97 98-99 00-01 02-03 04-05 06-07 08-09financial year
0
50
100
150
200
-50
-100
$'000 (2008-09 dollars)
farm cash income farm business profit
Sheepmeat industry overview
•
Lamb & sheep prices to remain high & move up again over medium term
–
Steady rise in local and overseas demand•
Improvement in farm incomes on higher prices, lower costs & higher turnoff
•
Prime lamb industry keeps expanding - defying recent falls in the sheep flock
•
Flock liquidation to slow this year and end by 2012–
Further 13% fall in sheep turnoff required in 2010 (on track)
Threats:•
Price correction
–
Some risk of customer backlash and a ‘correction’•
Drought continues flock decline & threatens growth in lamb supply