THERE was a broad easing of agricultural commodity prices in May and lamb was no exception, but the outlook is still strong for lamb in 2011-12.
That is the forecast from the latest National Australia Bank (NAB) Rural Commodities Wrap released recently, featuring lamb as the ‘commodity in focus’.
NAB Agribusiness General Manager, Khan Horne said, supply and demand factors point to prices remaining well above their long term average.
“We expect the year average heavy lamb price to be 3.6 per cent lower in 2011-12 compared with 2010-11 levels, with a 6 per cent increase in production,” said Mr Horne.
“This is being driven by the high Australian dollar, a return to normal supply following the floods and general resistance by meat processors to paying higher prices.
“Despite this, lamb prices are historically high – around 45 per cent above the decade long average.
“Looking forward, the outlook for lamb remains strong with high domestic prices and growing export demand spurring a supply response and boosting restocker demand,” said Mr Horne.
NAB expects shipments overseas in 2011-12 to be around 7 per cent higher than last year.
“Australian exporters have made significant inroads into developing economic markets and volumes are likely to be buoyed by strong growth in key trading partners China, the Middle East and South East Asia, which now make up 47 per cent of total lamb exports,” said Mr Horne.
Booming prices at the retail level have led to a drop off in domestic consumption of lamb, down by more than 10 per cent over the past 12 months.
“Overall in the year to March 2011, lamb and mutton was by far the strongest meat component of the CPI, up 11.7 per cent on a year earlier. This compares with more modest increases in poultry and pork (up 2.7 and 2.6 per cent respectively),” Mr Horne said.