LAMB exports to our top three markets are expected to soar higher in 2014 spurred on by greater prosperity across countries such as China and others in the Middle East, and a steady recovery in the US economy.
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China appears to be the big mover for forecast demand according to Meat and Livestock Australia (MLA) market information and analysis manager Tim McRae, who this month released the group’s annual sheep industry projections.
Mr McRae was tipping China to take 10 per cent more of our lamb this year on the back of record shipments last year.
This meant shipments to China would rise to 43,400 tonnes (shipped weight).
He said food safety was a major issue for Chinese consumers, and Australia’s strong food safety regulations and the “clean and green” image have helped boost exports in recent years.
The popularity of hot pots in China has driven the demand for breast
and flat cuts and in 2013 this accounted for just over 50pc (or 20,331t) of the cuts exported to the market.
The Chinese market in 2013 accounted for about 18pc of the Aussie lamb exports, but the main competitor to this destination has been New Zealand with a market share of about 54pc.
“Although the existing NZ-China Free Trade Agreement places Australia at a competitive disadvantage, the impact of NZ’s tariff advantage is expected to be subtle in 2014, due to NZ’s anticipated lower production,” Mr McRae said.
In contrast to China, the US takes more high value cuts, and Mr McRae tipped the biggest growth to the US market to come in the form of chilled product.
Overall Aussie lamb exports were forecast to bounce another 7pc to the US in 2014 bringing the total up to 42,000t.
This would be the highest calendar year total since 2007.
The flourishing competitive advantage afforded by the lower Australian dollar (against the US dollar) also helped push up demand.
Meanwhile, the long-term trend for exports to the US has been toward chilled product, and in 2013 it accounted for 45pc of the total for that market.
Mr McRae said most of the high value lamb cuts exported to the US went to the north-east of the country, where per capita lamb consumption is almost double the national average.
“This is in large part due to the relative wealth of the region allowing for greater consumption of lamb which was a more expensive protein,” he said.
By cut, lamb legs should easily maintain the position as the largest volume export cut to the US and in 2013 more than 12,000t was shipped.
“In 2013, there was also a large increase in what is classified as assorted cuts, which includes packages of three or more primals,” Mr McRae said.
“This is likely to have accounted for more leg exports in some packages, after growing from 4200t in 2012 to 8500t in 2013.”
As Australia’s largest export lamb market, the Middle East is forecast to take about 61,000t in 2014 which was a lift of about 2pc on 2013 totals.
Mr McRae said the economic outlook for the broader Middle East region was positive.
“Gross domestic product growth is forecast at 3.8pc in 2014 and 4.2pc in 2015, helping underlying demand for Australian sheepmeat,” he said.
More than 70pc of the lamb exported to this market has been in the form of whole carcases and this demand was anticipated to continue in 2014.