The Meat & Livestock Australia (MLA) report said Australian exports would likely be boosted by a decline in that country’s currency and less competition from NZ.
The Australian dollar was about 80.80 United States cents at the start of January. MLA expects it to hover below 70 US cents next year, from about 72.50 cents at the moment.
“Prices have been helped by the low Australian dollar and a weaker performance from our major competitor, NZ, where sheep numbers have reached a 60-year low as they transition into dairying,” MLA’s manager of market information, Ben Thomas, said.
“Considering the forecast lower NZ lamb production and exports, combined with the anticipated lower Australian dollar, the higher 2015 trade lamb price trend may occur again next year.”
Australia’s national sheep flock is expected to rise 0.3% to 70 million in the year through June 2016, after an estimated 3.9% decline last year, the MLA report said.
“The flock has been contracting since 2013, attributed to very high lamb and sheep slaughter driven by drought conditions across large swathes of the country’s major sheep-producing regions,” it said.
“The flock is expected to move towards 73m head over the next few years – encouraged by high sheep and lamb returns and assuming a return to more average seasonal conditions from autumn 2016.”
In 2016, Australian lamb slaughter is expected to fall 3.4% to 21.5m because of a drop in the number of breeding ewes, while lamb production is forecast to slip 2.2% to 482,000 tonnes carcaseweight (CW), reflecting an increase in average weights as farmers shift to more meat-focused breeds.
Australian mutton exports are expected to decline 12% to 127,000 tonnes swt in 2016, while NZ mutton exports are forecast to drop 14% to 77,000 tonnes swt in 2016.
The NZ sheep flock is estimated to have declined 4.1% to 28.6m in the year through June 2015, reflecting drought conditions in some areas and a shift to dairy farming.
NZ lamb slaughter is expected to drop 7.4% to 19.4m in the year through September 2016, as lamb production slips 6.3% to 354,600 tonnes CW, MLA said in its report citing Beef + Lamb NZ figures.
