Lamb and mutton exports hit historic highs in May. Lamb exports achieved the third highest monthly export volumes since 1994 at 28,518 tonnes, while mutton exports were 81% higher than the five-year average, at 19,590 tonnes swt. Exports to China drove the result, with the Middle Kingdom accounting for 44% of mutton exports.
Key Points:
China remains the top destination for Australian lamb exports for the third month
Mutton exports continue to flow due to elevated slaughter levels
High production and low prices are the key drivers behind strong export volumes
Lamb slaughter numbers reached their highest level for over two years in the week ending 27th May at 439,690 head. Lower domestic prices are making Australian exports relatively more competitive against global competitors and has pushed year-to-date exports just above the five-year average for the same period.
Figure 1: Monthly lamb exports 2021 – May 2023. Source DAFF
Exports to the top four destination of the US, China, United Arab Emirates and Papua New Guinea all increased from April. China accounted for the largest rise in export volumes and year-to-date exports to the US remain 23% lower than the same period last year.
Figure 2: Monthly lamb exports by destination 2021 – May 2023. Source DAFF
Mutton exports continue to be shipped at volumes well above the five-year average, with year-to-date volumes currently 36% higher (Figure 3). Mutton exports are expected to be lower over winter due to the historical seasonality of supply. High slaughter numbers, however, will keep volumes elevated over and above recent years.
Figure 3: Monthly mutton exports 2021 – May 2023. Source DAFF
China is Australian largest destination for mutton exports by a country mile and year-to-date volumes are 84% higher than the five-year average.
Figure 4: Monthly mutton exports by destination 2021 – May 2023. Source DAFF
Australia is expected to continue exporting significant volumes of lamb and mutton to China as increased supply and lower prices improves the competitiveness of Australian product in the global market. Export volumes of lamb to the US are expected to be supported by higher production but remain lower than the previous year due to economic uncertainty reducing demand for the high-quality chilled lamb products.
As flagged in our May Cattle Outlook, China became the top export destination for beef in April though it has not been enough to support Australian cattle prices. China’s post lockdown economic revival will be important to watch in terms of whether it will increase domestic demand for protein. It is important to note, however that export demand does not have the power to turn prices around against the weight of significantly higher supply of mutton and lamb.
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