AUSTRALIA could be set for another record lamb export result in 2023 after a big year in 2022, but global versus domestic demand, workforce capacity and lamb carry-over are expected to be key factors.
In his latest Episode3 sheep meat summary, analyst Matt Dalgleish has reported that Australian lamb export volumes for December 2022 finished the year marginally ahead of the five-year trend.
There was 23,174 tonnes of lamb exported for the final month in 2022, bringing the year’s total exports to 284,256 tonnes swt.
“This represents lamb export volumes that are 7 percent ahead of the 2021 season and also 7pc above the average annual volumes according to the five-year trend,” Mr Dalgleish said.
“Indeed, annual lamb export volumes were the strongest on record and 1pc higher than the previous record set in 2019.”
Click here for the full EP3 report
Export plants managed more consistent throughputs
WAMMCO chief executive officer Coll MacRury said plants had been able to achieve the 2022 lamb export results by having less down time for maintenance and breaks and more consistent throughputs. Plants also focused on lambs rather than mutton, he said, which is reflected in the 2022 Department of Agriculture Forestry and Fisheries data released last week.
Mr Dalgleish said Australian mutton exports finished the 2022 season at nearly 9pc under the five-year average for December at 15,217 tonnes swt. Total mutton exports for the 2022 year were 2pc higher than 2021 with 144,005 tonnes swt exported for the year. Compared to the annual average volumes over the last five-years the current mutton export volumes are 9pc under trend, he said.
“They (the plants) have had to fill the gaps with lambs.
“They haven’t had as much down time, they’ve had to keep going with the workforce they had,” Mr MacRury said.
“And the other thing you’ve got to take into consideration is that a lot of that old season lamb was delayed from last season, if they had had the workforce they would been killed before June/July in the last financial year,” he said.
“But because we were short of labour, all that older season lambs has gone into this season (July/August/September 2022).
“So even though our lamb exports are up, a good portion of that would have been old season lamb that would normally have been killed the season before.”
Mr MacRury said he was hearing that major plants had been able to hire more offshore-sourced labour. With the reports of good lambing results and paddock supplies nationally, this meant the conditions were potentially in place for a record year of lamb exports in 2023, he said.
“All things being equal, this year they are going to have a pretty strong Autumn kill, so we should see a very big lamb kill because there are still plenty of lambs out there and there were very good lambing rates.
“You’ve also got the handover of last season’s lambs that have come into this season’s (kill).”
Smallstock mix is the key – AMIC
The Australian Meat Industry Council’s general manager of industry affairs Tim Ryan said the key to the somewhat counter intuitive outcome in 2022 is the change in smallstock processing mix.
“Exports are only one piece of the puzzle.
“What has helped ease the shortage of labour when it comes to slaughtering lambs has been the surge in lamb carcase weights,” he said.
“We don’t yet know the full calendar year weights for 2022, but in the January-September period lamb carcase weights were 25.4kg on average – comfortably a record high and 9 percent higher than 2019, the previous big lamb export year.
“That has meant that fewer people on the slaughter floor can produce a greater tonnage of meat.
“Bigger lambs require more trimming and are less suitable for the carcase export trade; however, so efficiency gains on the slaughter floor have been partly offset by placing more pressure on the boning room workforce,” he said.
“The other major difference in 2022 was that the mutton kill was also relatively low, so slaughter floors were processing a higher share of lambs, which in turn drove that export mix.
“In January-September 2022 combined mutton and lamb slaughter was still 9pc below 2019, offsetting some of the workforce shortages,” Mr Ryan said.
“We’re yet to see where domestic consumption landed for last year, but a post-COVID export demand recovery for much of 2022 and a soft A$ likely drove the share of production towards exports too.
“In light of this, Australian plants are still understaffed and needing more people to operate at full capacity and to maximise carcase value,” he said.
“This workforce shortage will become more acute as livestock turnoff picks up after a period of herd and flock growth, particularly if we hit a dry spell.”
Global AgriTrends analyst Simon Quilty said his analysis indicates there is unlikely to be a heavy lamb carry-over into 2023.
He said lamb yardings have held steady since the heavy October rain, with yardings down just 11pc year-on-year for October and November and the yearly average down 12pc
“Lamb slaughterings year-on-year are 13pc higher than yearly average of 5.7pc – so it points to be current or ahead of last year.”
Mr Quilty said another supply and carcase weight factor will animal health, with anecdotal reports of lamb losses in the Riverina up to 20pc higher due to worms and wet weather. Light lambs have been more abundant due to the difficulty in put weight on them, he said.
“Sheep yardings and kill for October and November reflect yearly average – no carry-over here either. Business as usual.”
“More often than not 9 out of 12 years sees heavy lambs increase in value in the Q1 compared to Q4 of previous year. (Click here to see relevant graphs).
Australia’s main lamb markets in 2022 were the United States, China and Papua New Guinea and the key mutton destinations were China, Malaysia and the US.
The latest DAFF figures also indicated there were some recovery in lamb carcase and cut exports to the Middle East with 36,993 tonnes reported in 2022 versus 9430 in 2021. Meat & Livestock Australia said 2022 domestic lamb consumption figures will not be available until next week.