The recent high price for lambs and in particular the lack of quality heavyweights has had an adverse effect of lamb exports.
So far this year, sheepmeat exports to the US have continued to expand, up eight per cent year-on-year, with lamb and mutton exports climbing 5pc and 19pc respectively.
However, the limited availability of heavy categories since the end of June has seen lamb exports to the US in August ease 16pc year-on-year despite being offset by increased shipments of mutton.
In a recent Markets and Prices report, MLA said ever-increasing competition from China has also pressured shipments to the US; in the first seven months of 2018, to dislodged the US as Australia’s largest lamb export market by volume despite being our most valuable.
International demand for sheepmeat, aided by a softer Australian dollar, has also assisted to support prices, with China and the US leading the way as the largest recipients of Australian sheepmeat in 2018.
Assisting with the support of import prices, the slaughter of lamb and sheep within the US was seasonally lower during late July and August.
In the four weeks ending 25 August, US sheep and lamb slaughter averaged 37,600 head per week, 3.1pc higher than the same period the year prior but 2.4pc lower than the five-year average.
This lift in US domestic supply and the cheaper price of competing proteins (chicken and pork) resulted in a sizeable increase in sheepmeat cold store inventories in July (at 19,000 tonnes, up 55pc year-on-year and 26pc above the five-year average).
MLA says US farm gate lamb prices have declined in recent weeks; however, the price of imported product remains historically high, underpinned by the high cost of lambs in both Australia and New Zealand.
The lack export heavyweights in Australia’s current supply, combined with increased numbers of lighter lambs hitting the marketplace due to the dry season, has also reflected in overseas export volumes.
Whereas in the past, as mention above, the US was the largest destination for Australian lamb followed by China and combined Middle East countries.
However since July exports to China have outrun volumes exported the US increasing share by three basis points from 17.7pc to 21.7pc of total lamb exports compared to the full year results of 2016-17. Export share meanwhile to the US has declined over the same period from 22pc to 19.7pc while exports to combined Middle East destinations have also increased rising to 20.2pc of total lamb exports compared to 19.0pc two years ago.