The Australian sheepmeat industry generates at least 60 cents in every dollar of revenue from overseas, hence international markets play a critical role in the profitability of Australian farmers.
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In 2017/18, Australia exported $3.5 billion in lamb and mutton, or more than 60 per cent of what it produced. As a result, Sheep Producers Australia seeks to provide snapshots on what is occurring in international markets, given the huge bearing they have on the economic well-being of our domestic industry.
Brexit
With the date set for when the UK leaves the EU, pressure is mounting to secure a deal for a continuation of trade. A 'no deal' Brexit would have major ramifications for the Australian sheep industry.
Post-Brexit, with no deal in place, Australia's 19,186 tonne lamb quota would be split 80:20 between the UK and EU.
This would drop the supply to the EU to a few thousand tonnes, compared with New Zealand which would have an equal split between both markets for its 228,000 tonne quota.
In addition, a 'no deal' would mean that UK meat would attract a 25 per cent tariff into the EU and, and as a result, UK farmers would be likely to resist imports in favour of boosting their own local supply.
SPA continues to monitor the situation and maintains its policy that a Brexit deal would be best for Australian farmers.
United States
SPA attended the American Sheep Industry Conference in February. This was an important trip, given that Australia is the largest exporter of lamb to the US.
Key observations of the tour included how plant-based alternatives to red meat are gaining significant market share; the considerable influence the Millennial generation is having on the meat industry given their preference for meals with minimal preparation; and the changing methods of selling with online shopping set to become a significant proportion of sales.
Middle East
The Middle East is Australia's most important live sheep export market, with about $160m of exports in 2018. Australia's three largest Middle Eastern markets by volume are Kuwait (34 per cent), Qatar (33 per cent) and Jordan (10 per cent).
Any change to the trade would have major implications for WA sheep farmers and, as a result, representatives from SPA are travelling to the Middle East this week to further understand the market.
