Global sheepmeat supplies expected to tighten in 2016

Current forecasts show that supplies from sheepmeat exporters in Australia and New Zealand are likely to decline in 2016, according to AHDB.

The organisation for the English beef and sheep industry (AHDB) attributes this to falls in the size of their flocks over the past year.

This will lead to smaller volumes of sheepmeat available for export, AHDB has stated, providing an opportunity to UK exporters.

However, demand from some of their major markets is also likely to be subdued in the next year due to both stock levels and domestic production being high, according to AHDB.

In the first eight months of 2015, AHDB stated that sheepmeat production in Australia and New Zealand was fairly stable compared to the same period in 2014.

Australian sheepmeat production was less than 1% lower, while volumes in New Zealand were less than 1% higher, AHDB said.

AHDB reports that the New Zealand breeding flock had fallen in size in June 2015 and it is expected that there will be a 7% drop in the size of the lamb crop in the 2015/16 season.

This will lead to a forecast fall of 6% in lamb exports during the season, according to AHDB.

Australia

The latest forecasts from Australia indicate that sheepmeat production will be lower in 2015 than in 2014, AHDB has stated.

It attributes this decline to the sharp fall in the level of adult sheep slaughtered, while the number of lambs will increase beyond the already high level seen in 2014.

This is leading to a fall in exports, which AHDB states is attributed by lower shipments of mutton, while volumes of lamb shipped will increase.

However, a smaller breeding flock in 2015 will lead to a further fall in production in 2016, with both slaughterings of lambs and adult sheep declining and as a result exports are also forecast to be lower, it stated.

China

In China, domestic sheepmeat production has been reported to have been at a high level since the beginning of the year, AHDB reports.

With the slowdown in the growth of the economy and a government austerity drive encouraging officials to cut down on extravagant spending, AHDB states that demand for sheep meat has been reported to have fallen.

This has led to reduced import demand from China, which has mainly affected it two major suppliers, New Zealand and Australia.

Next year, AHDB predicts that demand is likely to remain at similar levels to that seen so far this year, as high supplies and weak demand persist.

The US is the third largest import market by volume for sheepmeat and according to AHDB it is especially important for shipments from Australia.

Due to current high levels of lamb in cold storage in the US, AHDB states there is expected to be a decline in import demand.

However, the continuing strength of the US Dollar could still help the major suppliers to this market, it stated.