Is lamb the new Wagyu?
Lamb producers may see prices climb into the spring to hit a high of 1000¢/kg to 1050¢/kg thanks to demand from the United States — but domestically, labour shortages continue to be a problem.
Global AgriTrendsmarket analyst Simon Quilty said fresh lamb prices were up 10 per cent in the US, and in terms of sales, were up 1.5 per cent.
Fresh beef, chicken and pork prices are up 10 per cent but volumes are down from four to eight per cent, meaning customer push-back at the higher prices.
“It is unbelievable how lamb has taken off in America and it is the new Wagyu, meaning it is an elite product in that market,” Mr Quilty said.
“For the lamb sector we will see a trading range of 800¢/kg to 1066¢/kg over the next few years and lamb looks like it will be in great shape.
“American prices next year will go 16 per cent higher for beef and lamb, and with that global beef and lamb prices will move higher. When America lifts prices, it enables Australia to lift prices.”
In Australia’s domestic market, labour continues to be a challenge with visa applications down 39 per cent in the past two to three years.
“This has plateaued out in the last two quarters but we still have a serious shortage —effectively what we need is for them to be back working and travelling,” Mr Quilty said.
“Lamb prices are far lower than what they should be due to the lack of workers, especially in Victoria.
“But I am bullish about lamb prices at the back end of this year reaching 1000¢/kg to1050¢/kg, with the spread between heavy and light lambs widening dramatically.”
Speaking at the Pasture Agronomy Service conference in Wagga Wagga on May 25, Mr Quilty said beef producers could expect Jap ox/heavy steer prices to fall at gradual pace and the Eastern Young Cattle Indicator to have a soft landing and bottom out at 800¢/kg in 2024, followed by a gradual improvement.
The US has forecast 858,000 metric tonnes less beef in the domestic market next year due to drought, while the US export market is tipped to fall by 193,000 metric tonnes.
An indicator of herd liquidation, the average US weekly cow slaughter is tracking six per cent higher than last year, resulting in a 1.2 million head loss from the top 10 beef cow states.
“The clear message is things are tightening. Globally there is a 318,000 metric tonnes shortage this year and next year looks even tighter,” Mr Quilty said.
“Australian exports are on track this year to be five per cent lower, Brazil down by 90,000 tonnes, Uruguay down by 10 per cent and Argentina is down this year by 38,000 tonnes or 5. 2 per cent.”
Australia has announced a record number of cattle on feed for the last quarter, at 1.2 million head, to service the Wagyu and high-end grain-fed export markets.
Australian Wagyu striploin and ribeye cuts are returning AUS$120/kg in the US, while tenderloins are trading slightly higher.