noscript

News and Announcements

Booming overseas demand is set to boost heavy lamb prices

  • Published June 25, 2014 3:04PM UTC
  • Publisher Wholesale Investor
  • Categories Company Updates

Source: Stock Journal; Published: Wednesday, 25th June 2014

TIGHTENING domestic supply combined with booming overseas demand is set to boost heavy lamb prices by as much as 30 per cent to 570c/kg this year, according to a forecast by National Australia Bank (NAB).

In its latest monthly Rural Commodities Wrap, NAB predicts prices will be further buoyed by a weakening Australian dollar, with the bank projecting the dollar to be as low as US85 cents by the end of 2014 and US83c at the start of 2015.

As previously reported by FarmOnline, the impact of reduced lamb supply is already being felt at saleyards across Australia, with prices pushed to $200 and above at Dublin’s SA Livestock Exchange earlier this month.

In NSW, favourable trade lamb prices have been a boon for graziers experiencing one of the best seasons they can remember in the central and southern parts of the State, with prices remaining well above the same time last year for autumn and winter so far.

In a statement, NAB Agribusiness general manager Khan Horne said prices for producers have been tracking upwards since bottoming out in late 2012 and NAB expected this trend to continue.

“Export demand prospects for Australian lamb are likely to remain buoyant for some time to come,” Mr Horne said.

“Exports for the first half of 2014 have been steadily increasing and aren’t yet showing any signs of slowing down.

“Supporting our price forecast is the expectation that supply is likely to tighten this year and into 2015 following two years of drought-driven high slaughter rates, combined with poor breeding seasons.”

The NAB outlook reinforces the forecast issued last week by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) in its latest quarterly agricultural commodities report.

The ABARES report forecasts lamb and mutton producers will enjoy higher prices in the coming year, driven by strong export demand and falling local sheepmeat production.

ABARES said saleyard lamb prices had increased 30 per cent between January and May to around 557 cents a kilogram, the highest monthly average since mid-2011.

On the export front, lamb exports set a new record in 2013 for the second consecutive year, at 214,000 tonnes shipped weight eclipsing the 2012 record of 189,000 tonnes.

“2013 saw a remarkable 41pc increase in lamb exports to China,” Mr Horne said.

“This propelled China past the US to become Australia’s second largest export market for lamb after the Middle East.”

Falling production in New Zealand, one of Australia’s key competitors, has further assisted Australia’s exports and prices, according to NAB.

The NAB report states a dry spring and summer in 2013 led to the lowest lamb drop in the country in 60 years, which suggests exports from the country are also likely to be down in 2014.

As production and exports of Australian lamb boom, domestic lamb consumption has been trending downward since 2009.

Last year, lamb consumption by Australians fell by 6pc.

The NAB Rural Commodities Index eased slightly in May, largely in response to moderate declines in the prices of livestock and dairy.

The Index declined 1.2pc in AUD terms and 1.3pc in USD terms.

Beef, lamb, dairy and cotton all fell 4pc in May in AUD, whereas wheat (+4 per cent), barley (+5 per cent) and sugar (+3 per cent) posted moderate gains.

Capital Insights
The Index Approach in Early-Stage Venture Capital: Reconsidered

The venture capital (VC) landscape is marked by its dynamism and complexity, especially in early-stage investing. The traditional approach in VC, characterised by a selective and intensive vetting process, often contrasts with the concept of ‘index investing.’ This article revisits the indexing approach in early-stage VC, incorporating insights from recent studies and data, including a […]

Capital Insights
The Future Is Now: The Evolution of Dealflow with Wholesale Investor

If you’ve ever thought of investing or expanding your portfolio, there’s no better time than the present. In the fast-paced world of investment, things are changing at a breathtaking speed, and it’s crucial to stay ahead of the game. The Future of Deal Flow is Today Dealflow, the lifeblood of the investment world, is not […]

Join over 45,000+ sophisticated investors

Join Now