Softening US import prices to see Australian export lamb prices ease

Kristen Frost
By Kristen Frost
May 14 2022 - 4:00am
TRENDING LOWER: The ESTLI, at the end of April was at 791c/kg cwt, 2pc below the same time in 202.

Rising costs in the United States and increasing inflationary pressures are tipped to see consumers drift away from purchasing Aussie lamb.

And softening US import prices may see Australian lamb export prices ease.

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This is according to the latest Rabobank agribusiness report which suggests given lamb's more premium positioning, the niche product may drop in desirability on consumers lists.

Rabobank senior analyst for animal protein Angus Gidley-Baird said despite a strong start to the year, it is very possible to see expect a softening of export prices.

"Australian lamb exports to the US have been strong in 2022, supported by the rising and then record prices through 2021 and into 2022," Mr Gidley-Baird said.

"But now that we have passed the peak lamb consumption period at Easter, US imported lamb prices have started to ease.

"While the average price for frozen imports is still 41pc higher than the same time last year, they are down 14pc from the peak in late January."

Yet the market is far from collapsing, he said.

The Eastern States Trade Lamb Indicator (ESTLI), at the end of April was at 791 cents per kilogram carcase weight (cwt), two per cent below the same time in 2021.

Mutton and restocker lambs saw a jump in prices of 6pc and 12pc respectively.

"This is an indication of ongoing favourable seasons and limited livestock, with producers looking to take on more sheep as we head into the winter months," Mr Gidley-Baird said.

"The favourable seasonal outlook could see good demand for sheep and restocker type lambs supporting their prices, however the softening US import prices may see a little bit of weakness in trade and export lamb prices over the coming months that may result in them drifting lower."

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He said trade and export lambs generally trend higher through May into June, but stressed there may be limited upside this year.

But on the upside, Australian lamb exports were up year-on-year, reflecting the stronger production, rising 8pc or 24,450 tonnes shipped weight (swt).

The Middle East market saw its first year-on-year increase in 26 months up 9pc.

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This was only its second rise in 35 months.

"Although there is a long way to go before recovering to previous levels, this is the first positive sign for exports to the Middle East in over two years," Mr Gidley-Baird said.

Volumes to the US were also strong, recording the fifth highest volume in history with 6866 tonnes swt sent offshore for the month of March.

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Kristen Frost

Kristen Frost

National Sheep and Wool Writer

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