AUSTRALIAN lamb prices are forecast to increase by 10 percent by June 30, and a further 3pc next financial year, the ABARES Conference in Canberra heard yesterday.
Saleyards prices for lamb are expected to average 585c/kg, driven by reduced slaughter and strong restocker demand following greatly improved seasonal conditions in spring 2016.
In 2017–18 lamb prices are forecast to rise by a further 3 percent to average 600c/kg.
Continued flock expansion is expected to support domestic saleyard lamb prices, assuming average seasonal conditions and despite a slight increase in slaughter. Growing export demand, particularly from the Middle East and the United States, and an assumed lower Australian dollar are also expected to support lamb prices.
Over the remainder of the outlook period, saleyard lamb prices are projected to remain relatively high but to ease from 2018–19 in response to a projected increase in lamb supplies. Saleyard prices are projected to decline to 507 cents a kilogram (in 2016–17 dollars) in 2021–22.
Lamb production to fall before rising over the medium term
Lamb slaughter is forecast to fall by 3.2pc to 22.4 million head in 2016–17, as graziers rebuild their flocks. Production is forecast to fall by 2.5pc to 503,000 tonnes in 2016–17, with higher than average carcase weights partially offsetting the impact of lower slaughter.
In 2017–18, assuming average seasonal conditions and continued flock rebuilding, slaughter rates are forecast to increase by 1pc to 22.6 million head and production to increase by 1pc to 507,000t. Lamb slaughter is projected to continue increasing throughout the projection period, reflecting the expanding national flock and a subsequent increase in lamb numbers. In 2021–22 lamb slaughter is projected to be around 25.3 million head and lamb production 569,000t.
Bright outlook for Australian livestock industries
The lamb outlook projected at ABARES yesterday was part of a bright prognosis for Australian livestock industries.
Acting ABARES Chief Commodity Analyst, Trish Gleeson, said that following exceptional returns in 2015–16, strong results were expected to continue in the coming year.
“In 2016-17, cattle and sheep farms are forecast to see the best farm cash income results in many years,” Ms Gleeson said.
“Cash income for sheep farms is expected to increase to an average of $133,000 per farm in 2016-17, which is around 70pc above the average over the past 10 years.”
Over the medium term, the volume of beef and sheep meat production and exports are expected to improve. The volume of beef and sheep meat exported is projected to rise from 1.36 million tonnes to 1.52mt between 2016-17 and 2012-22.
“Improved market access has supported Australian agriculture, but looking forward, continued effort is needed,” Ms Gleeson said.
“Productivity growth and infrastructure improvement will be key to securing future opportunities for the Australian livestock industry.”
Ms Gleeson said innovation across livestock industries was strong and increasing adoption will contribute to productivity growth.