International Lamb Profile
Revised April 2012 by Gary Brester, professor, Department of Agricultural Economics, Montana State University, firstname.lastname@example.org
World sheep and lamb numbers are similar to those that existed in the 1960s. However, productivity increases have caused total world production to climb from 11 billion pounds in 1965 to 18 billion pounds in 2011. China is the largest producer with 4.4 billion pounds followed by the European Union (1.9 billion pounds), Australia (1.4 billion pounds), and New Zealand (1 billion pounds). Although world production has increased, demand has increased more than supply and resulted in record prices over the past 2 years.
Since 1990, Australian sheep inventories have declined from 170 million head to 70 million head. New Zealand’s inventory has also declined about 50% over that period to 32 million head. Inventories in the European Union declined from 140 million head in 1990 to 100 million head in 2011. China’s inventories are similar in 2011 to that experienced in 1965. Some growth in sheep numbers has occurred in India, Pakistan, and North Africa. Although world inventory numbers have declined, productivity increases have increased world lamb and mutton production levels. Productivity has increased almost 60% since 1965. Production of lamb meat has increased in both India and China over the past decade. However, production in Australia, New Zealand, and the European Union has been flat since 1965.
World per capita lamb, mutton, and goat consumption increased from 3.95 pounds in 1965 to 4.17 in 2007. Asia and Mexico experienced increases in per capita consumption primarily because of increasing personal incomes and urbanization. Total consumption in these regions was also influenced by population growth. South America, the United States, Oceania, and Europe experienced declines in per capita lamb consumption of 50% or more since 1965.
Although world per capita lamb consumption totals just over 4 pounds annually, U.S. per capita lamb consumption was only 0.88 pounds in 2011. In contrast, annual per capita consumption in Australia and New Zealand totaled 26 pounds and 25 pounds, respectively. Per capita consumption in Africa is about 5.5 pounds.
Lamb and mutton represent primary animal-sourced protein for regions of North Africa, the Middle East, India, and parts of Europe.
Australia and New Zealand are the world’s principal lamb and mutton exporters. Australia exports 44% of its lamb production and 80% of its mutton crop. In 2011, Australia exported 648 million pounds of lamb and mutton valued at AU$1.1 billion. New Zealand exports 80% of its lamb production annually and 84% of its mutton. In 2011, New Zealand exported 750 million pounds of lamb and mutton valued at NZ$2.9 billion.
The United States is the largest export market for Australian lamb and accounted for 32% of total Australian lamb export value in 2011 followed by the Middle East, European Union, and China. In terms of volume, exports to the United States, the Middle East, and China were similar in 2011. Australia exported 3.1 million live sheep in 2010 valued at AU$298 million. Key markets for live sheep exports include Jordan, Qatar, and Kuwait.
The European Union accounts for 57% of New Zealand’s lamb export value. Principal New Zealand export markets in terms of volume were the United Kingdom (19%), China (12%), and the United States (7%). In terms of value, the United Kingdom was New Zealand’s largest market followed by the United States and Germany. New Zealand’s primary export market for live sheep is Saudi Arabia.
The United States exports only minimal amounts of lamb (about 2% of domestic supplies). The U.S. sheep industry exports cull ewes and rams to Mexico where they are slaughtered to produce mutton. Total live sheep exports were 80,000 head in 2010 but only 13,000 head in 2011. The reduction in live animal exports was primarily the result of lower U.S. culling rates given current record domestic lamb prices.
Lamb and sheep inventories have declined about 18% in the 2 major lamb exporting countries of Australia and New Zealand during the past 5 years.
The European Union is the world’s largest lamb and mutton importer (490 million pounds annually). The United States and China each import about 140 million pounds. Income growth in many developing countries has increased lamb meat imports. For example, China’s per capita lamb consumption has increased about 4% since 1980. But, with a population that exceeds 1 billion, even small percentage increases in per capita consumption have required China to increase imports by 500% over the past 20 years.
U.S. lamb imports have increased over the past decade, while European Union imports have been relatively flat. Lamb imports account for nearly one-half of U.S. lamb consumption. About 65% of U.S. lamb imports originate in Australia and 35% in New Zealand.
Australia and New Zealand have a competitive advantage in sheep and lamb production relative to other countries. The advantage is generated by lower production costs, high quality, and aggressive trade programs. Nonetheless, both Australia and New Zealand have experienced drought conditions in recent years. Producers in both countries have also shifted production enterprises away from sheep towards dairy, crops, and other livestock.
The livestock sectors in many countries are facing environmental challenges. Soil salinity, woody and invasive weeds, and land-use issues pose substantial challenges to the sheep industries in Western Australia. In New Zealand, weather events and pressures on the country’s natural resource base provide substantial environmental challenges to the expansion of sheep production. Coupled with drought conditions in one of the major sheep producing regions in the United States, it may be several years before current high prices trigger herd expansions in major sheep producing countries.
New Zealand and Australia are the world’s leaders in lamb exports and account for nearly 90% of global export quantity. Thus, declining inventories in these two countries has tightened meat supplies and led to higher prices. While countries such as India, Pakistan, Algeria, and Sudan have increased sheep inventories, substantial population growth has caused demand to increase more than domestic supplies.
Given the size of the New Zealand and Australian production sectors and their importance in world exports, these two countries will continue to be the major players in world markets.
American Sheep Industry Association
Australian Sheepmeat Industry Facts
Global Agricultural Trade Systems, Foreign Agricultural Service, USDA.
Livestock, Dairy and Poultry Outlook, Economic Research Service, USDA.
Meat & Livestock Australia
Meat Industry Association (MIA) of New Zealand Annual Report.
New Zealand Exports, New Zealand Ministry of Agriculture and Forestry.
Principal Ag Commodities, Australian Bureau of Statistics, 2007-2008.
Sheep and Goats, National Agricultural Statistics Service, USDA.
Stock Number Survey, Meat & Wool New Zealand.
Links checked December 2013.