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Australian sheep meat: the solution to growing worldwide demand for protein?

May 29, 2019

May 29, 2019

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Australian sheep meat: the solution to growing worldwide demand for protein?

Meat & Livestock Australia, in collaboration with the not-for-profit advisory company Agri Benchmark, released an article in January of this year providing a thorough analysis on the ebbs and flows of the sheepmeat market over the most recent decade in particular, as well as providing a prediction for the industry’s trajectory going into the next decade.

Meat & Livestock Australia, in collaboration with the not-for-profit advisory company Agri Benchmark, released an article in January of this year providing a thorough analysis on the ebbs and flows of the sheepmeat market over the most recent decade in particular, as well as providing a prediction for the industry’s trajectory going into the next decade.

The report can be distilled into various key elements all contributing to this burgeoning industry: the global food price increase and its implications on the growing demand for sheepmeat; the impressive performance of Australian farms & flocks, and the reasoning behind why sheepmeat is becoming such a sought after source of protein.

Over the past 2 years, global food prices have soared and are predicted to remain at a constant level going into the next decade. Such a sharp spike upwards is unsurprising however, considering that over the past 20 years, global food prices have increased an astounding 2.6% annually on average. This perpetual increase in costs has been catalysed by the growing demand for dairy and sheepmeat, particularly across the densely populated Asia and the Middle East. Sheepmeat in particular has distinguished itself from other proteins over the past few decades, being the only meat that increased in price in the 90s, and then experiencing an unfathomable 44% price increase in 2017 alone, which Agri Benchmark attributes to post-drought supply falls and flock rebuilding. Flock expansion is only predicted to continue, according to the report, as the world catches wind of the unprecedented profitability of sheepmeat as a rich source of protein.

Moreover, the MLA report stipulated the impressive performance of Australian flocks in comparison with global levels of weaning, costs, and death rate, establishing us as a pioneering force in this burgeoning global industry – “In 2017, all of the seven typical sheep flocks analysed in Australia covered short- and medium-term costs at the enterprise level. Three of the Australian farms also covering long-term costs, with the remainder contributing to, but not fully covering, opportunity costs – an extraordinary result.” 

In terms of meeting global demand, Australian sheep systems produce 5-10 times more sheepmeat per hour of labour input than the rest of the world. Australia, alongside NZ, has been involved in Free Trade Agreement negotiations with the EU since 2018, and has scope for potential FTA negotiations with the UK following Brexit (especially given recent falls in EU sheepmeat production). Together, Australia and New Zealand commanded 90% of world sheep meat exports in 2017, with Australia exporting 48% and New Zealand 41%. OECD-FAO projects a further 26% rise in Australian sheepmeat exports by 2027, taking its share to 54% of world trade. Thus on a global scale, it is evident that Australia has pivoted into a perfect position to establish an authoritative monopoly over the industry, leading various multilateral agreements in the process.

Upon sifting through the extensive yet vital report, the major takeaway is this: that Australia is an indisputable pioneer in the sheepmeat exportation market, with rare capabilities and a diversified approach that enables the nation to dominate an industry that is only predicted to continue growing into the future.

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