Mecardo Analysis - Making lamb exports great again
- By: "Farm Tender" News
- Ag Tech News
- Mar 26, 2019
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By Matt Dalgleish | Source: DAWR, Mecardo.
This article is bought to you by Post Straightening Service.
This article is bought to you by Post Straightening Service.
He claims credit for most good news, so I’m surprised Trump hasn’t been seeking recognition from Aussie lamb producers for his role in improving trade flows from Australia to the USA since the start of 2019.
Regardless of what you think of the man and his politics, there is no denying the American economy has seen a dramatic turn around since the beginning of the Trump administration in November 2016. Gross domestic product (GDP), a key measure of a nation’s economic success, has grown and unemployment levels are at lows not seen since 2001.
The fact that American’s economic situation has improved has implications for their consumption of lamb as it is generally considered a luxury spend when on the menu in the USA. Indeed, analysis undertaken in 2017 by Datassential demonstrated that lamb featured on the menu of fine dining restaurants 61% of the time, compared to just 8% for cheaper quick service restaurants.
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Lamb export volumes from Australia to all destinations have started 2019 strongly, trending at the upper boundary of the normal range and 20% above the five-year trend (Figure 1). However, filtering the data to focus just on the consignment of Australian lamb to the USA shows a much stronger start to the season.
February 2019 saw the highest trade volumes of lamb exports on record to the USA at 7,023 tonnes swt. Since the start of the season, flows have been trending well outside the normal range, with average monthly flows sitting 40% above the five-year seasonal trend (Figure 2).
Lamb flows from Australia to the Middle East and Asia are also above trend so far this season, but not to the same magnitude as being shown in the USA, sitting 29% and 13% above the five-year average respectively.
Key points
* February 2019 saw the highest trade volumes of lamb exports on record to the USA at 7,023 tonnes.
* Since the beginning of 2019, average monthly lamb export flows to the USA have been trending 40% above the five-year seasonal pattern.
* The increased demand for Australian lamb in the USA has resulted in America displacing the Middle East as second highest export destination in terms of market share for lamb product this season.
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What does this mean?
The increased demand for Australian lamb to the USA during 2019 has resulted in America leapfrogging the Middle East to take out second highest destination in terms of market share for lamb exports at 27.1%. The last time the USA held second spot ahead of the Middle East was back in 2009 (Figure 3).
Exports of Australian lamb to the Middle East usually peaks during May/June, while flows to the USA often hit their seasonal lows in July/August so there is still time for the Middle East to regain second place as the season progresses.
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