By Malinda Geisler, content specialist, AgMRC, Iowa State University, malindag@iastate.edu.

Profile revised February 2011.
 

Overview
As of July 1, 2010, U.S. farms had 6.9 million sheep and lambs, down 2 percent from July 2009. The U.S. sheep inventory peaked in 1942 with 56 million head. About 80 percent of the sheep produced in the United States are geared toward lamb production. The top five sheep and lamb producing states are Texas, California, Wyoming, Colorado and South Dakota.

China is the world’s largest producer of sheep followed by Australia.
 
Demand
Lamb consumption has remained steady over the past decade. According to a USDA report, most Americans do not consume any lamb. Per capita lamb consumption was 0.74 pound on a boneless equivalent in 2008. Overall U.S. consumer lamb preference is for high-value lamb legs, racks and loin cuts. In contrast, New Zealanders consume 26.5 pounds of lamb and 26.5 pounds of mutton per year. Australians consume about 23 pounds of lamb and 3.7 pounds of mutton annually.

Lamb and mutton are the principal meats in regions of North Africa, the Middle East, India and parts of Europe. The European Union claims to be the world’s largest consumer and the number one importer of lamb.
 
Exports
The United States exports just 2 percent of its lamb and mutton production. In 2009, the United States exported 6,975 metric tons of lamb valued at $21.5 million. Total live sheep exports during 2009 were 157,337 head, valued at $10.2 million. Live sheep exports went to Mexico and Canada. Figures for 2010 were not available at this writing.

The American Sheep Industry Association supports mandatory country-of-origin labeling or COOL. The labeling program, which was included in the Farm Security and Rural Investment Act of 2002 (2002 Farm Bill), is mandatory as of March 16, 2009. The Agricultural Marketing Service is responsible for enforcing and regulating the country-of-origin labeling.

Imports
The United States imported 70,146 metric tons of lamb into the United States valued at $432 million during 2009. Figures for 2010 were not available at this writing.

Lamb and mutton imports account for nearly half of U.S. lamb consumption. About 70 percent of lamb imports originate from Australia. About 29 percent are from New Zealand. The grass-fed lambs are marketed at smaller weights and have found consumer acceptance in the United States. Favorable currency exchange rates in recent years have also made the U.S. lamb market profitable for Australia and New Zealand.

The U.S. lamb market continues to be pressured by the removal of tariff-rate quota (TRQ) on imported lamb meat from Australia and New Zealand. The United States removed the tariff on lambs from Australia and New Zealand to comply with the World Trade Organization ruling.
 
Competitiveness
Sheep producers in Australia and New Zealand have a competitive edge over other producers. According to USDA, the comparative advantage these two countries have is due to the cost of production, trade, exchange rate, consumer preference and advertising.

Australia exports 44 percent of the lamb it raises and 80 percent of its mutton crop. The 2009-2010 lamb exports were valued at $932 million. Mutton exports for that same period were valued at $456 million. Australia's sheep flock as of June 30, 2009, was 72.7 million, the lowest inventory since 1920.   

The United States is the number one market for Australian lamb exports and accounted for 23 percent of Australia's total lamb exports in 2009-2010. The number two and three markets for Australian lamb are Japan and the United Kingdom. Australia exported 3.1 million live sheep in 2009-2010 valued at $298 million. Key markets for live sheep exports include Jordan, Qatar and Kuwait.

New Zealand exports 80 percent of its lamb crop annually and 84 percent of its mutton. New Zealand’s total sheep inventory was 32.4 million as of June 30, 2009, the lowest since 1950. Total lamb exports for New Zealand were $2.8 billion for the year ending June 2010. 

The European Union accounts for 57 percent of New Zealand’s value of lamb exports. Top European destinations include the United Kingdom, France and Germany. North America is New Zealand's number two export market with 14 percent of total exports. New Zealand focuses on Saudi Arabia for live sheep exports.

Australia and New Zealand have both experienced drought conditions in recent years. Producers in both countries have converted land use from sheep production to dairy and/or crop production.


Sources
American Sheep Industry Association

Australian Sheepmeat Industry Facts

Australian Trade Commission

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, 2009.

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.

Profile originally created February 2003 and revised February 2011.