Aussie lamb industry sees growth opportunities

by Meat&Poultry Staff
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NORTH SYDNEY, Australia – Australia’s lamb industry has an opportunity to meet steadily growing global demand over the next five years if it can accelerate productivity, according to Meat & Livestock Australia (M.L.A.).

David Palmer, M.L.A.'s managing director, told delegates at LambEx 2010 – the inaugural national lamb industry event being held in Perth on Aug. 5 – recent forecasts and economic modeling provided a compelling platform for the prospects that lie ahead for the Australian lamb industry.

"Based on the international Food and Agricultural Organization [F.A.O.] demand forecasts, which indicate growing global consumer requirements for lamb and country-by-country production estimates, there will be a 300,000 tonne void in global supplies to meet demand over the next five years," Palmer said. "When we overlaid this information with modeling by the Centre for International Economics [C.I.E.], we found that Australia was the only country really in a position to capitalize on this opportunity."

C.I.E. simulations demonstrated most of the consumption-growth forecast (F.A.O. -- 1.6 million tonnes) would occur in China, but that local Chinese sheepmeat production would largely fill the demand growth. The remaining 300,000 tonnes in demand growth was a supply opportunity.

"In the past 14 years, lamb production growth has not been anywhere near fast enough to meet domestic demand growth, so retail lamb prices have risen 112% (70% in real terms)," Palmer said. "Instead of the 30kt rise in lamb production we have seen in those 14 years we would have needed well in excess of 100,000 tonnes growth in production to meet the domestic demand growth we have seen."

In the next six years, the C.I.E. models a 70kt to meet expected domestic demand growth (i.e. retail prices for lamb remaining at current levels and not becoming less affordable). Keeping these factors in mind, M.L.A. developed a range of production scenarios to understand what industry would need to achieve to make the most of the opportunity.

"Current rates of productivity change, which are viewed as conservative, will not enable the industry to meet demand," Palmer said.

Three key areas where producers can push for better performance include increasing marking rate improvements from the current 1% up to 2%, increasing carcass weight growth rates from 0.1kg per annum up to 0.6kg, and increasing the non-Merino proportion of the breeding flock.

M.L.A.'s 'It's ewe time!' forums under the Making More From Sheep program are currently underway throughout southern Australia delivering best-practice practical information and tools to help producers bolster the performance of their sheep enterprise. LAMBPLAN, which is a key production tool to ramp up genetic progress of flocks is delivering an additional $17.5 million (US$15.9 million) to industry every year.
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