Aussie Lamb Market Finds its Home in the U.S.

Article by: Hari Yellina

For the first time this season, overall lamb monthly flow volumes have surpassed the five-year norm in Australia’s lamb export market. In March, the United States surpassed China as Australia’s largest lamb market, increasing by nearly 29%, while lamb exports to all other locations increased by 22%. Over 6800 tonnes of lamb were sent to the United States, a 33 percent increase over the seasonal average. Lamb exports to all other countries, excluding the United States and China, have surpassed the five-year average patterns for the first time this year, with 14,079 tonnes delivered to other countries.

This was a 22 percent increase over February’s figures. Lamb volumes to China, on the other hand, have decreased by 10% in March to 3506 tonnes shipping weight (swt). But, according to Matt Dalgleish of Thomas Elder Markets (TEM), it could have merely been a case of an exchange, as China’s appetite for mutton remains consistent, accounting for 45 percent of the market. “Perhaps there was a little of a substitution effect in China in March, with Australian mutton export flows up nearly 6%,” Mr Dalgleish speculated. “Mutton demand from China is about 12 percent more than the five-year average trend for this time of year, with 4421 tonnes of mutton consigned in March.”

“However, Australian mutton shipments to the United States have been disappointing so far in 2022, presumably because US consumers prefer Australian lamb instead.” With only 781 tonnes swt exported in March 2022, mutton exports from Australia to the United States are 57 percent lower than the five-year average. Mr Dalgleish believes the new trade agreement with India for Australian sheep meat will provide a chance for the business to diversify. “Although we are expected to see tangible benefits pouring through to Australian sheep producers in years to come,” he said, “the free trade agreement (FTA) with India will spread market risk and potentially offset decreasing demand from areas like the US.”

Strong mutton shipments to Malaysia have cemented Malaysia’s position as the second most important market for Australian mutton, relegating the United States to third place. With 2206 tonnes sent to Malaysia in March, there was a 16 percent increase. They currently possess 15.6 percent of the entire mutton export market share in 2022, compared to 7.7 percent in the United States. In March, overall lamb export flows reached 24,450 tonnes swt, thanks to strong results from the United States and other destinations.