Industry Structures

Executive Summary The lamb Market is a volatile market with many highs and lows, this is a mature market with a constant and promising future to come. A rise in global markets will usually generate an increase in return off livestock, this can increase the local prices. Local bodies or lobby groups like National Farmers Federation, Sheep Cooperative Research Centre, Department of Agriculture for Fisheries and Forestry and Meat and Livestock Australia help to maintain a reasonably simple trading system.

In this report it was shown that the future has potential and with the support of the producers and industries behind the live trade of lamb things will pick up and move on in favour of the market over time. Introduction The lamb Market is a volatile market with many highs and lows, this is a mature market with a constant and promising future to come. In the report it will cover; the main markets and end use applications for the product, monitoring the market and change of supply and demand patterns over the years.

It will identify the future trends and challenges in the lamb industry, including the competition and locally and overseas. The report will also cover how and what the industry agencies do to protect the lamb market for Australia. Main Markets and End Uses There is a growing export demand for both lamb and mutton, with China being the largest export destination for Australia followed by India, Kuwait and Italy (IBIS, 2013) Australia’s sheep flock is the second largest in the world although the flock has been shrinking and Australia is the largest exporter of lamb according to IBIS world report.

Producers sell prime lamb and mutton to meat processing markets or export markets. A rise in global markets will usually generate an increase in return off livestock due to more numbers being sold and cost increasing for them. In relation to sales of lamb and mutton, the average Australian consumes around 11kg of lamb and mutton every year (IBIS, 2013) ABARES estimates and annual increase of 3. 1% for lamb and 6. 1% increase for mutton over the four years through to 2016-17.

(IBIS, 2013) Figure 1. Lamb utilisation and retail price (MLA, 2013) Supply and Demand Patterns Whilst there are large countries Australia’s population is growing, therefore the demand for meat is on the rise and lamb being a popular meat and a substitute for others such as beef and chicken. In 2011-2012 Australia exported 49 percent of all lamb and 97. 5 percent of all mutton produced in Australia, the total value of these lamb exports was 1. 094 million.

Around 19,240 Australian broad acre farms are classified as lamb around 19,240 Australian broad acre farms are classified as lamb producers the majority of these farmers are mixed enterprise, a substantial proportion of their income coming from cropping, beef cattle, sheep and wool, as well as from the sale of lambs. Lamb producers generally sell their lambs to slaughter houses, feedlots or export. Around 9400 slaughter lamb producers earn more than 20 per cent of their total farm receipts from the sale of slaughter lambs and are classified as specialist slaughter lamb producers. With the numbers of lamb sitting steady we can see.

Key Competitors Competition for the Australian Lamb Market is continually increasing from overseas buyers and investors, despite remaining one of the largest and most valuable market for lamb. The reasons for this include a challenging domestic consumer market and strong growth in overseas markets, this is due to the decrease in the Australian dollar decreasing. (MLA, 2012) New Zealand is one of Australia’s closest competition in the trade market. The sheep flock in the United States has been declining in recent years, to the point that as at the beginning of 2012, it was the lowest in over a century, at 5. 35 million head.

With ongoing widespread drought in the US there is currently little prospect of this pattern reversing, although the majority of the US flock is in the less-affected north-western states. Industry Structures and Policy Frameworks There are a couple of barriers to entry this includes capital investment and securing finance as new producers need to purchase land, fencing materials and livestock. The government and the livestock export industry are working cooperatively with trading partners to address post-arrival welfare concerns and to improve the transportation, handling and slaughter practices of livestock in overseas markets.

Ongoing involvement in the livestock export trade provides an opportunity to influence animal welfare conditions in importing countries. The Department is jointly funding a number of projects with the live export industry to improve infrastructure and training to promote better animal handling and slaughter practices. Australia is the only country that requires specific animal welfare outcomes for livestock exports. Ongoing involvement in this trade provides an opportunity to influence animal welfare conditions in importing countries. This legislation was an important step by the Government to overhaul the livestock export trade.

Arrangements to ensure exported animals are well treated during road and sea transportation are an important part of the standards. Ships must comply with strict rules about ventilation, drainage and provision of water and food. Each animal must have access to food and water on demand and enough space to lie down, and there must be special pens for sick animals to receive veterinary care ‘Under the Australian Meat and Live-stock Industry Act 1997, a report on the carriage of livestock on any sea voyage to a port outside of Australia must be tabled in each House of Parliament every 6 months.

’ (MLA, 2013) Future Industry Challenges With the recent ban on live trade out of Australia this could be a potential future challenge for the livestock industry. The live trade of livestock is of great importance to both regional and rural Australia and is vital to the red meat industry. (Department of Agriculture Fisheries and Forestry, 2013) Since the mid 1970’s the livestock export trade has grown significantly to become a vital component of Australia’s agricultural export earnings. Live exports are a legitimate trade providing farmers with a valuable alternative to domestic slaughter.

Some people maintain that live trade of Australian livestock should be banned and a preference for frozen or chilled meat to be exported. Chicken being one of the most popular meats means that there is competition for the lamb market, beef also is a competitor for the local lamb markets and export markets as chicken is common in Asian countries. Industry Agencies and Bodies Meat and Livestock Australia – MLA delivers marketing and research and development services for Australia’s cattle, sheep and goat producers.

MLA creates opportunities for livestock supply chains from their combined investments to build demand and productivity. Department of Agriculture for Fisheries and Forestry – Supplying research and development in the agricultural sector, monitoring political and industrial sectors to keep the agricultural sector on top of the game.

State Agricultural sectors – supplying information related to research and development that is relevant to the state body and the farmers related National Farmers Federation – ‘The NFF is the peak body representing farmers, made up of state commodity councils and farm organisations, and is a powerful voice for agriculture politically’ (National Farmers Federation, 2013) Sheep Cooperative Research Centre (Sheep CRC).

– The role of the CRC is to facilitate transformation of the sheep industry through making sheep easier to manage, developing the production and processing of meat and wool to meet increasing consumer expectations and by increasing the uptake of new technologies by the industry. Conclusion

The lamb Market is a volatile market with many highs and lows. In this report it was shown that the future has potential and with the support of the producers and industries behind the live trade of lamb things will pick up and move on in favour of the market over time.? References http://www. mla. com. au/Prices-and-markets/Trends-and-analysis/Sheepmeat-and-lamb/Live-exports http://www. daff. gov. au/animal-plant-health/welfare/export-trade http://www. daff. gov. au/animal-plant-health/welfare/export-trade/live-vs-frozen http://www. nff. org. au/ http://www. sheepcrc. org. au/about/about-the-sheep-crc. php