Sheepmeat

GVP $1.4 billion est. Down 5% year-on-year.
NSW mutton production increased significantly, up 35% on the previous year and 32% above the 10-year average production.
Unseasonal surges in supply put prices under heavy pressure in 2023.

NSW sheepmeat production continued to rise during 2022-23, with confidence in the strong seasonal conditions supporting excellent feeding and breeding conditions and high lambing rates. Consecutive years of flock rebuilding has resulted in flock numbers reaching levels not seen since the mid-2000s. The increase in supply and difficulties for processors in increasing processing capacity led to some sharp falls in price, especially for mutton.

Production

NSW Mutton and Lamb slaughter ('000 head)¹⁵¹

Lamb 10 year average (LHS)
Mutton 10 year average (RHS)
Lamb slaughter rolling 12 month vs 10 year average (LHS)
Mutton slaughter rolling 12 month vs 10 year average (RHS)

Download data (.XLSX)

Lamb supply continued to increase off the back of the increased number of breeding ewes and elevated marking rates for both the 2022 autumn and spring lambing seasons. Breeding ewe numbers in NSW were estimated at 16.4 million in April 2023 and average marking rates were well up across all breeds. ¹⁹¹ Reflective of the increase in supply, NSW lamb slaughter was up year-on-year, increasing by 3% to 5.4 million head.¹⁵¹ This was 7% above the 10 year average and the highest level of lamb slaughter since 1986. Average lamb carcase weights remained high at 25.4 kilograms per head, reflecting the abundance of feed and a genetically superior flock.¹⁵¹ As a result, total 2022-23 NSW lamb production reached a new record high of 138,045 tonnes, up 3% on the previous year and up 11% on the 10-year average production.¹⁵¹ With the flock rebuild complete, demand from restockers to expand breeding stocks also declined. Coupled with a greater offtake of non-performing and older ewes, adult sheep supply and mutton production significantly increased year-on-year. NSW sheep slaughter was up by 35% year-on-year to 2.9 million head the highest level since 2009 and 32% above the 10 year average.¹⁵¹ An annual total of 79,457 tonnes cwt of mutton was produced, up by 33%.¹⁵¹

Price

The increase in supply and a lack of demand from restockers resulted in significant falls in price. The average 2022-23 National Trade Lamb Indicator (NTLI) was 14% lower than last year and the average 2022-23 National Mutton Indicator (NMI) was down 31%.¹⁷⁸ By the end of the year the NTLI was down 28% to $5.67/kg cwt and the NMI was down 42% to $3.43/kg cwt, 9% and 16% below their 10 year averages respectively.¹⁷⁸

Warnings of drier conditions from the Bureau of Meteorology and a national flock size approaching levels not seen for decades meant there was waning demand from restockers and traders. As a result, heavy lambs materially outperformed light lambs. The heavy lamb premium to light lambs reached a record high at the end of the year only 18 months after achieving a record discount.¹⁷⁸

Eastern States Lamb Indicator and National Mutton Indicator¹⁷⁸

NMI (cents/kg cwt)
NMI 10 year average
ESTLI (cents/kg cwt)
ESTLI 10 year average

Download data (.XLSX)

Heavy lamb premium/(discount) to light lamb (cents/kg cwt)¹⁷⁸

Download data (.XLSX)

Trade

Total NSW sheepmeat export volume rose by 15% year-on-year to a record high of 146, 783 tonnes, 16% above the 5-year average.³⁵ Despite the record volume, the value of NSW sheepmeat exports declined slightly, down 2% to $1.24 billion, just below the record high of 2021-22 and reflecting a 15% fall in the average unit value of sheepmeat exports.³⁵ Unit price falls were biggest for mutton, falling by 22%.³⁵ Lamb unit prices fell 9%. Lamb exports were up 7% year-on-year by volume to a record 81,647 tonnes and valued at $872 million. Reflecting the significant increase in slaughter volumes, NSW mutton exports also reached a new record volume, up by 27% year-on-year to 65,136 tonnes valued at $452 million.³⁵ China retained its place as the largest export destination for NSW sheepmeat. Total exports were up 13% by value and 34% by volume. Mutton exports were the standout, up 54% on 2021-22 volumes and up 28% by value to a record $299 million.³⁵

Lamb exports to China were also up 18% on last year to just over 44 thousand tonnes however, for the first since 2016, did not show significant growth in value,³⁵ largely due to the impact of COVID lockdowns and restrictions which suppressed demand for higher value products. The US retained its spot as the top export destination for NSW lamb by value, despite falling 9% year-on-year to $309 million³⁵ as domestic economic pressures impacted consumer spending on foodservice and premium meats.

South Korea was the standout growth market for 2022-23, up by 40% in both volume and value year-on-year.³⁵ Whilst only 7% of exports by volume, it has been one of the fastest growing export markets for Australian lamb over the past decade, driven by increasing exposure to new cuisines and growing awareness of the nutritional benefits of red meat.¹⁸

Outlook

The onset of drier conditions and the declaration of El Nino weather conditions by the Bureau of Meteorology has resulted in a significant increase in supply as farmers reduce stock numbers. As more areas experience dry conditions, many producers have clearly decided to sell early rather than feed and maintain stock. After three years of excellent seasonal conditions the national flock has rapidly rebuilt and is at levels not experienced for decades. Although processors have responded with increased processing capacity and higher slaughter, challenges in accessing labour means available processing capacity is not sufficient to handle the increase in supply. Processors and exporters are also cautious given high red meat inventories in cold storage globally and economic uncertainty as global interest rates rise. Limited buying from restockers and traders is exacerbating the supply and demand imbalance. As a result, lamb and mutton prices have fallen significantly since the end of 2022-23, especially for lighter lambs and ewes or wethers in poor condition. At the time of writing, mutton prices are back to levels not seen since 2013-14, and even then, only briefly. Lamb prices are back to levels last seen in 2016. Prices are now lower than those experienced at any stage during the 2017-2020 drought despite a much smaller proportion of the state experiencing drought conditions.

Whilst current prices are creating some difficulties in the short term, the medium-term outlook remains positive. Export volumes are at record highs despite the global economic challenges. Although export prices have declined, they remain high by historical standards, supported by a low Australian dollar. Australian exporters are also well placed to take advantage of the new Free Trade Agreement with the United Kingdom (A-UKFTA). On entry into force, the A-UKFTA will almost triple the amount of Australian sheepmeat that can be exported to the UK tariff-free. Australia can immediately export an additional 35,000 tonnes of sheepmeat to the UK. Australia’s quota will increase each year before reaching 88,000 tonnes after 10 years.

Stronger Primary Industries Strategy

mRNA vaccines made in Australia to prevent animal diseases

Strategic Outcomes

Biosecure Industries and Environment

1.1 Lead the preparation for and prevention of future biosecurity threats
1.2 Coordinate timely and risk proportionate responses
1.3 Rapidly and efficiently contain biosecurity threats
1.4 Work in partnerships to minimise impacts to primary industries and the environment from endemic biosecurity threats

Response Capacity

4.1 Anticipate and prepare for adverse events
4.2 Timely and proportionate response
4.3 Minimise impact of events

An Australian RNA vaccine development pipeline for emergency animal diseases brings together a collaborative network including UNSW/NSW RNA Pilot facility, CFIA and international partners. The program utilises a licence agreement with Tiba Biotech providing access to next generation RNA vaccines with self-amplifying mRNA technology and RNABL® dendrimer formulation (US patent, 2020). Priority targets are Lumpy skin disease, Border disease and Foot and mouth disease (serotypes O and A).

A border disease (BD) vaccine directed against the viral surface glycoprotein is being evaluated in sheep after demonstrating protective immunity in mice. The vaccine was evaluated in sheep using different dendrimers. The preferred formulation given at 50µg/head twice with a 5-week inter-dose interval produced strong virus neutralising titres and 7 of 8 of these sheep were protected against infection with live virus. The pestivirus AGID test for antibodies to a non-structural viral protein was positive in infected sheep but not vaccinated sheep giving the capacity to distinguish infected from vaccinated sheep. UNSW will produce mRNA constructs and establish the scale up and production pathways for dendrimer formulation. The NSW Pilot facility will be able to make vaccine in an emergency.

For lumpy skin disease (LSD), six potentially protective antigens were used to generate six LSD mRNA vaccines. All six mRNA vaccines demonstrated the ability to produce their specific antigens in cell culture following transfection. These mRNA vaccines were administered to mice and antibody responses specific to their specific baculovirus expressed antigen were assessed by ELISA. Following vaccination, specific antibodies were detected by ELISA for each mRNA vaccine. Combinations of these will be assessed for efficacy in sheep and cattle (CFIA) and hopefully ACDP.

Tiba have previously produced a FMDV-O vaccine that gave protective antibody titres in pigs and this will be further evaluated using the current vaccine platform technology.

Regulatory requirements and expedited emergency registration of new mRNA vaccines for livestock are being explored with progress towards registration of the BD vaccine.