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Sheepmeat Council : Sheepmeat 2012
8 SHEEPMEAT COUNCIL OF AUSTRALIA ANNUAL MUSTER 2012 In 2012 we are experiencing greater supply of product, with around 4.7 million head being slaughtered during the first quarter, 12 percent higher than 2011. These figures relate more closely to the long term industry trends than those experienced last year. In May lamb prices were running at 20-30 percent below the record levels, and the increasing supply and the decline in skin prices were important factors causing the reduction in returns. Skins came back mainly due to Chinese and Eastern European buyers retreating from the market but also because of higher supply and quality issues. One of the other factors affecting prices of Australian lamb has been competition from an increased supply of NZ lamb and with economic conditions in Europe (NZ's largest lamb market) discouraging consumer demand, some NZ product has been sent to Lamb Prices After lamb prices reached record levels last year, the price of Australian lamb returned to trend levels in winter 2011, with a slight improvement again in spring and the 2011 year fnished relatively steady. Record exports for lamb Australian lamb exports were heading for potential record numbers in 2012 -- for example May totalled 17,182 tonnes SWT breaking the previous May record (set in 2007) of 14,999 tonnes. This volume makes May 2012 the second largest month on record, behind October 2007 (17,785 tonnes SWT) -- traditionally the larger months are October and November. May 2012 lamb exports were also 20 percent above last year's May figures, as greater production contributed to increased shipments. Shipments to the Middle East and China/South East Asia were greater than May last year, while exports to the US finished slightly lower. Exports for the first five months of 2012 were 19 percent higher year- on-year, at 72,591 tonnes SWT, due to much higher production, and led by significant growth to the Middle East and China. Australia's export markets. In addition, a later season in NZ has resulted in heavier lamb carcases, closer to Australian production specifications. The good news is that with Australian lamb exports reaching record high levels it would appear that the majority of the increased production is heading to overseas consumers, despite the high Australian dollar. Whilst MLA predicts that the overseas demand will limit the potential fall in prices, particularly with the ongoing purchasing strength of the Middle East and China and a forecast recovery in exports to the US, the situation remains uncertain, and further economic uncertainty in global markets will continue to dampen demand.