September 2019 Prepared by: Steiner Consulting Group 800.526.4612 USA DomesƟc Lamb Market - Supply/Demand SituaƟon Sheep and lamb slaughter remains near year ago levels. In the last few months weekly lamb slaughter has been remarkably near year ago levels. While the overall volume may differ slightly in any given week both the seasonal trend and the actual volume of lambs and sheep coming to market has been similar to last year. In the four weeks ending September 14 US lamb and sheep slaughter averaged 35,875 head/wk, just 0.3% lower than a year ago. Since early June, weekly slaughter has averaged 36,883 head/wk, 0.1% lower than a year ago. We expect slaughter to hover around current levels through October but then seasonally increase in November and De- cember to support holiday demand. Lower on feed numbers could impact domesƟc supply during holi- day season. The survey of Colorado lamb feedlots suggests that the Ɵght supply situaƟon we noted earlier in the year is only geƫng worse. Seasonally the supply of lambs on feed increases in Q4 in order to support higher demand/slaughter for year-end holiday needs. The inventory of lambs on feed as of August 1 was esƟmat- ed at 83,389 head, 37.5% lower than a year ago and 17.6% lower than the five year average. It is important to keep in mind that this survey only covers a small porƟon of the overall supply of lambs coming to market. However, the decline in Colorado bears watching and we think it highlights the domesƟc supply risk later this year. Lamb prices mostly sideways in July and early August but slowly driŌing lower. From a seasonal perspecƟve this is the Ɵme of year when slaughter lamb prices move lower. The decline is largely a funcƟon of larger supplies available in the market. Producers recog- nize that year end holidays represent peak demand and they look to market a larger number of their inventory during this Ɵme, which invariably pressures prices lower. However, somewhat Ɵghter do- mesƟc supplies should help keep domesƟc lamb prices above year ago levels in the last three months of the year. At the end of Sep- tember the average lamb carcass price was pegged at $297.8/cwt, 5% higher than a year ago. Retail feature acƟvity was weaker for Labor Day but should start to improve in the final three months of the year. The USDA lamb retail feature index in the four weeks ending September 20 aver- aged a reading of 2,413/wk, 18% lower than a year ago and 21% lower than the five year average. Retail features both leading into Labor Day and post holiday were down in double digits from last year. TradiƟonally lamb features are quite low at this Ɵme as the start of the school year impacts consumer budgets and retailers respond by focusing on less expensive meat protein opƟons. Weekly USA Lamb & Sheep Slaughter '000 Head/Week. Source: USDA. Compiled and Analysis by Steiner Consulting 26.0 31.0 36.0 41.0 46.0 51.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5-Yr 2018 2019 Monthly US Lamb Market Update September 2019 Issue Prepared Exclusively for Meat & Livestock Australia - Sydney September 24, 2019 COLORADO LAMBS ON FEED. '000 head Monthly Data Reported by the Livestock Market Information Center 50 100 150 200 250 300 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Avg. 2013-17 2018 2019 Slaughter Lamb Prices. Formula Carcass Basis. Weekly Souce: USDA-AMS and LMIC 250 260 270 280 290 300 310 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5-Yr Avg. 2018 2019
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September 2019
Prepared by: Steiner Consulting Group 800.526.4612
USA Domes c Lamb Market - Supply/Demand Situa on
Sheep and lamb slaughter remains near year ago levels. In the last few months weekly lamb slaughter has been remarkably near year ago levels. While the overall volume may differ slightly in any given week both the seasonal trend and the actual volume of lambs and sheep coming to market has been similar to last year. In the four weeks ending September 14 US lamb and sheep slaughter averaged 35,875 head/wk, just 0.3% lower than a year ago. Since early June, weekly slaughter has averaged 36,883 head/wk, 0.1% lower than a year ago. We expect slaughter to hover around current levels through October but then seasonally increase in November and De-cember to support holiday demand.
Lower on feed numbers could impact domes c supply during holi-day season. The survey of Colorado lamb feedlots suggests that the ght supply situa on we noted earlier in the year is only ge ng worse. Seasonally the supply of lambs on feed increases in Q4 in order to support higher demand/slaughter for year-end holiday needs. The inventory of lambs on feed as of August 1 was es mat-ed at 83,389 head, 37.5% lower than a year ago and 17.6% lower than the five year average. It is important to keep in mind that this survey only covers a small por on of the overall supply of lambs coming to market. However, the decline in Colorado bears watching and we think it highlights the domes c supply risk later this year.
Lamb prices mostly sideways in July and early August but slowly dri ing lower. From a seasonal perspec ve this is the me of year when slaughter lamb prices move lower. The decline is largely a func on of larger supplies available in the market. Producers recog-nize that year end holidays represent peak demand and they look to market a larger number of their inventory during this me, which invariably pressures prices lower. However, somewhat ghter do-mes c supplies should help keep domes c lamb prices above year ago levels in the last three months of the year. At the end of Sep-tember the average lamb carcass price was pegged at $297.8/cwt, 5% higher than a year ago.
Retail feature ac vity was weaker for Labor Day but should start to improve in the final three months of the year. The USDA lamb retail feature index in the four weeks ending September 20 aver-aged a reading of 2,413/wk, 18% lower than a year ago and 21% lower than the five year average. Retail features both leading into Labor Day and post holiday were down in double digits from last year. Tradi onally lamb features are quite low at this me as the start of the school year impacts consumer budgets and retailers respond by focusing on less expensive meat protein op ons.
Weekly USA Lamb & Sheep Slaughter'000 Head/Week. Source: USDA. Compiled and Analysis by Steiner Consulting
26.0
31.0
36.0
41.0
46.0
51.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
5-Yr 2018 2019
Monthly US Lamb Market Update September 2019 Issue
Prepared Exclusively for Meat & Livestock Australia - Sydney
September 24, 2019
COLORADO LAMBS ON FEED. '000 headMonthly Data Reported by the Livestock Market Information Center
50
100
150
200
250
300
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Avg. 2013-17 2018 2019
Slaughter Lamb Prices. Formula Carcass Basis. WeeklySouce: USDA-AMS and LMIC
250
260
270
280
290
300
310
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
5-Yr Avg. 2018 2019
September 2019
Page 2
Prepared by: Steiner Consulting Group 800.526.4612
Imported Lamb Supply and Price Trends
Oceania imports were lower in August and early September. While overall lamb imports from the two main supplying coun-tries (Australia and New Zealand) remain above year ago levels for the year, volume of imports has been down recently. In the four weeks ending September 14 lamb imports from Australia averaged 773 MT/wk, 17% lower than a year ago. Imports from New Zealand during that period averaged 368 MT/wk, 4% higher than last year. Total lamb imports during this period averaged 1154 MT/wk, 14% lower than a year ago. Goat supply improves on higher Australia imports. Tight sup-plies earlier in the year and higher prices have resulted in a notable improvement in goat meat imports in recent weeks. In the four weeks ending September 14 imports of goat meat from all markets averaged 451 MT/wk, up 82% compared to a year ago. Australia accounted for about 87% of the overall supply imported and during the reference period Australian goat meat imports were up 74% from a year ago. Imports from New Zealand during this period averaged 71 MT/wk, 138% higher than last year. Imports from Mexico remain spo-radic but have increased significantly from a year ago. Year to date goat meat imports from Mexico were a total of 405 MT compared to 10,289 MT from Australia and 722 MT from New Zealand. New Zealand lamb slaughter hit the annual lows in late July and has been trending higher since then. However, we do not ex-pect a material improvement un l October. In the four weeks ending August 24 New Zealand slaughter averaged 164,936 head/wk, 6% higher than a year ago. Slaughter in the North Island during this period averaged 115,688 head/wk, 12% high-er than last year while slaughter in the South Island averaged 49,248 head/wk, 4% lower than a year ago. Prices for some imported lamb products have been mixed alt-hough high value cuts have found some support in recent weeks: Fresh Aus Shortloin, 1-Rib, 0x0: Prices have been dri ing low-er and they are currently as much as 14% lower than last year.
Fresh Aus cap-off racks, 28 oz and up: This is illustrated in the chart to the right. Prices con nue to hold firm and were mod-estly higher in the last two weeks and up 9% y/y.
Frozen Aus bnls leg: Last price quoted was $3.97/lb., 4.6% higher than a year ago.
Frozen NZ rack prices are near to slightly under year ago.
One word of cau on about the import sta s cs above. They are reported by USDA but they are not considered official US sta s-
cs. We o en look at them since they offer a much more imme-diate view of import trends. But the data is collected by Food Safety Inspectors, who are paid to inspect the meat rather than collect sta s cs. The official sta s cs for US meat imports are collected and reported by USDA-FAS. That data set is constantly reviewed and updated as more informa on becomes available. That data is updated regularly in this report and presented in page 7.
September 2019
Page 3
Prepared by: Steiner Consulting Group 800.526.4612
USA Monthly Lamb Market Update
US Domestic Lamb Cut and Primal ValuesWeekly Prices from USDA. Wt. Average
Please note that the prices, volume and sales value reported above represents only subset of total US lamb imports. It only reflects the data reported through the Mandatory Price Repor ng System. It is only for nego ated sales, no formula sales. Trade from smaller importers and traders is not included in the summary above. Data that does not meet the confiden ality guidelines also is not included in the above table.
September 2019
Page 7
Prepared by: Steiner Consulting Group 800.526.4612
USA Monthly Lamb Market Update
Source: This balance sheet was developed in large part on LMIC data and projec ons.
USA LAMB & MUTTONQUARTERLY SLAUGHTER, PRODUCTION, IMPORTS, EXPORTS AND DISAPPEARANCE. CARCASS WT. EQUIVALENT (CWE)
=A x BA B C D E F G =C+D-E+F+G
Year & Quarter Slaughter % ch.
Avg.Carc.Wt. % ch.
Comm.LambProd. % ch. Imports % ch. Exports % ch.
Farm Production
Adj. to End.
Stocks to Balance
Total Disapp. % ch.
000 Head Y/Y Lbs. Y/Y (Mil. Lbs.) Y/Y (Mil. Lbs.) Y/Y (Mil. Lbs.) Y/Y (Mil. Lbs.) (Mil. Lbs.) (Mil. Lbs.) Y/Y
Prepared by: Steiner Consulting Group 800.526.4612
USA Monthly Lamb Market Update
Quantity of US Imports of Fr/Frz Mutton, Goat, Lamb: World TotalSource: USDA/FAS. Units: Metric Ton. Analysis by: Steiner Consulting (800.526.4612)
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
5-Yr Avg 2017 2018 2019
Y/Y Ch. in Jul. 19 vs. Jul 18 US Mutton, Goat, Lamb ImportsSource: USDA/FAS Units: Metric Tons
-618
-529
-7
-3
0
63
88
-1,006
-1,200 -1,000 -800 -600 -400 -200 0 200
New Zealand(*)
Australia(*)
Other
Canada
Iceland
Chile
Mexico
World Total
-8%Change in total imports:
September 2019
Page 12
Prepared by: Steiner Consulting Group 800.526.4612
USA Monthly Lamb Market Update
Y/Y Ch. in Jul. 19 vs. Jul 18 US Mutton, Goat, Lamb Import Value ($)Source: USDA/FAS Units: US Dollars
-7,981,947
-4,365,844
-60,789
-55,919
0
239,565
643,503
-11,581,431
-15,000,000 -10,000,000 -5,000,000 0 5,000,000
New Zealand(*)
Australia(*)
Other
Canada
Iceland
Chile
Mexico
World Total
Change in total importvalue:-11%
$ Value of US Imports of Fr/Frz Mutton, Goat, Lamb: World TotalSource: USDA/FAS. Units: US Dollars. Analysis by: Steiner Consulting (800.526.4612)
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
2017 2018 2019 5-Yr Avg
September 2019
Page 13
Prepared by: Steiner Consulting Group 800.526.4612
USA Monthly Lamb Market Update
Quantity of US Imports of Fr/Frz Mutton, Goat, Lamb: New Zealand(*)Source: USDA/FAS. Units: Metric Ton. Analysis by: Steiner Consulting (800.526.4612)
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2017 2018 2019 5-Yr Avg
TOP US LAMB IMPORT MARKETS IN 2018 TOP US LAMB IMPORT MARKETS IN 2019Total Volume and Country Shares for Period Jan - Jul 2018, MT Total Volume and Country Shares for Period Jan - Jul 2019, MT
New Zealand
22%
Australia78%
New Zealand
21%
Australia79%
80K 79K
Quantity of US Imports of Fr/Frz Mutton, Goat, Lamb: Australia(*)Source: USDA/FAS. Units: Metric Ton. Analysis by: Steiner Consulting (800.526.4612)
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2017 2018 2019 5-Yr Avg
$ Value of US Imports of Fr/Frz Mutton, Goat, Lamb: Australia(*)Source: USDA/FAS. Units: US Dollars. Analysis by: Steiner Consulting (800.526.4612)
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
100,000,0002017 2018 2019 5-Yr Avg
$ Value of US Imports of Fr/Frz Mutton, Goat, Lamb: New Zealand(*)Source: USDA/FAS. Units: US Dollars. Analysis by: Steiner Consulting (800.526.4612)
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
2017 2018 2019 5-Yr Avg
September 2019
Page 14
Prepared by: Steiner Consulting Group 800.526.4612
USA Monthly Lamb Market Update
1942: 56,213
1960: 33,170
1990: 11,358
2012: 5,375
2019: 5,230 0
10,000
20,000
30,000
40,000
50,000
60,000
JANUARY 1 US SHEEP & LAMB INVENTORYSource: USDA 000 HEAD
Lamb and Sheep Inventory According to the 2017 Census of Agriculture Source: USDA-NASS
September 2019
Page 15
Prepared by: Steiner Consulting Group 800.526.4612
USA Monthly Lamb Market Update
September 2019
Page 16
Prepared by: Steiner Consulting Group 800.526.4612