SHEEP meat prices are second only to beef for consumers, but demand from developing countries is expected to continue to drive demand up, a new Meat & Livestock Australia report indicates.
The new report ‘Sheepmeat’s Unique Global Position’, was released this week as part of a new series of in-depth research reports analysing specific aspects of the global red meat industry.
The report looks at several markets that are influential within the global industry and represent both developing and developed economies – China, the Middle East, the United States and Australia.
The report says the diverse position of sheep meat in consumer diets across international markets is buoying optimism within the Australian sector, despite sheep meat’s share of global protein consumption being forecast to remain around 5 percent.
Sheep meat prices have gradually been gaining on world beef prices, and this trend is anticipated to continue over the next decade, according to the OECD. In 1990, the global sheep meat price was just under half the price of beef, in 2000 it had increased to 54pc, climbing to 75pc in 2015, and is forecast to be 86pc of the price of beef by 2025.
After overtaking pig meat in 2001, sheep meat is now the second highest-priced meat behind beef, and maintains a clear margin above pig meat, the report said. Similarly, sheep meat sold globally for the same price as poultry meat in the early 1990s, but now commands 2.5 times the poultry price. Despite the rise in price, sheep meat consumption continues to edge higher – driven predominantly by developing countries.
The report outlined how consumer perceptions and awareness, rather than purchasing power, affect sheep meat consumption in developed countries.
China and the Middle East driving consumption
MLA’s manager of market information Ben Thomas said developing economies including China and the Middle East were driving the growth of sheep meat consumption on a global scale, largely due to population growth, urbanisation and increasing incomes.
“Sheep meat encompasses a range of products including lamb, mutton, and a mix of both chilled and frozen cuts, and each of these products hold a unique position depending on the country or consumer segment in focus.
“Like other meats, sheep meat is likely to benefit from expected global population and economic growth, particularly in developing countries,” Mr Thomas said.
However, the product has the added advantage of no religious taboos, and is preferred by consumers in the world’s fastest growing population centres and ethnic groups.
“Sheep meat supply has proven unable to match demand and, despite expected faster price-driven growth in the next decade, the imbalance seems likely to continue.
“It means competition between markets for the limited sheep meat supply is likely to remain intense.”
Mr Thomas said sheep meat’s position in consumer diets around the world varies greatly, subject to a range of historical, economic, social and geographical factors.
“China and in the Middle East tend to have a stronger affiliation with sheep meat through cultural and religious customs, with lower-value product a staple part of many traditional cooking methods.
“This is changing; however, as markets become more progressive,” he said.
“In many developed countries, such as the United States, lamb is a niche product, not readily available or commonly consumed, except in certain demographics and minority ethnic segments.
“However, due to the size of the population, the US is identified as a potential growth market for Australian sheep meat.”
Mr Thomas said in contrast, the position of lamb in Australia and New Zealand is different from other developed countries, with strong awareness and preference for sheep meat arising from a long history of production and consumption. In all developed countries, consumer perceptions and awareness, rather than purchasing power, affected sheep meat consumption, he said.
Click here to read the full Sheepmeat’s Unique Global Position report.