Monthly US Lamb Market Update

Transcription

1 August 2018 Monthly US Lamb Market Update November 2018 Issue Prepared Exclusively for Meat & Livestock Australia - Sydney November 27, 2018 USA Domes c Lamb Market - Supply/Demand Situa on High prices, higher domes c produc on, more imports and compe on from other proteins have caused lamb to back up in freezers during the last few months. The total inventory of lamb and mu on at the end of October was es mated by USDA to be 39.3 million pounds, 24.5% higher than a year ago and 19.6% higher than the five year average. This is the largest supply of lamb in cold storage for this me of year since The supply/demand table on page 9 shows es mated US disappearance of lamb and mu on for 2018 at 409 million pounds. The current supply of lamb in cold storage is higher than 10% of disappearance when we consider that the supply/demand numbers are calculated on a carcass wt. basis while the cold storage numbers are product weight. It will take some me to work down the large inventory of lamb and mu on in cold storage. We think it is unlikely that we will see a notable reduc on in the inventory during November and December considering the recent increase in lamb imports from Australia and New Zealand and domes c slaughter trends. US domes c lamb slaughter seasonally increases in Q4 in order to support higher retail holiday features. Ample supplies of lamb in cold storage and slow sales have nega vely impacted slaughter in recent weeks. As a result we expect to see more downward price pressure on domes c lamb product. In the four weeks ending November 24 lamb slaughter in the US averaged 37,300 head/wk., 0.5% lower than a year ago. There were fewer lambs on feed in Colorado in October and November, which should limit the number of lambs coming to market later in the year and in Q1 of next year. According to a private survey of feedlots in the largest lamb feeding state, total inventory on November 1 was down 8% compared to a year ago but s ll above the five year average. Retail features increase in November, ahead of Thanksgiving holiday, and they are significantly higher into Christmas. The increase coincides with religious holidays but also because parts of the popula on like to serve lamb rather than turkey during this me. Retail features for the week ending November 16 were up 14% compared to the previous year but they remained below year ago levels. The retail price of lamb racks was 4.5% higher than the previous year while the price of loin chops was up 14%. On the other hand, semi-bnls legs were promoted widely at a 16% price reduc on from the same week last year. THOUSAND POUNDS 45,000 40,000 LAMB AND MUTTON, COLD STORAGE STOCKS, THOUSAND POUNDS, END OF MONTH INVENTORIES 35,000 30,000 25,000 20,000 15,000 Weekly USA Lamb & Sheep Slaughter '000 Head/Week. Source: USDA. Compiled and Analysis by Steiner Consulting LAMB AND MUTTON, COLD STORAGE STOCKS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Avg Yr Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2 Page 2 Imported Lamb Supply and Price Trends US lamb imports are now nega ve for the year. Ample freezer inventories and lower prices in the domes c market have made it more difficult to ship product into the US market. Demand from other markets has diverted more Australian and New Zealand product away from the US in recent months. Shipments from Australia con nued to trend lower in October and early November. According to USDA, imports of Australian lamb in the four weeks ending November 17 averaged 838 MT/wk, 21% lower than the same four week period a year ago. Imports of New Zealand lamb during this period averaged 334 MT per week, 3% lower than last year. Goat meat imports remain par cularly limited and they are down 26% for the year. Imports have improved modestly in recent weeks, however. In the four weeks ending November 17, US imports of Australian goat meat averaged 191 MT/week, 10% higher than a year ago. Australia so far this year accounts for over 96% of all US goat meat imports. The decline in supplies available from Australia and New Zealand, strong foodservice demand and the seasonal improvement in retail business con nues to drive prices higher. Those end users that were able to secure inventory earlier in the year now have a very strong compe ve edge as supplies in the spot market are par cularly ght. The price of Australian lamb racks has surged higher in recent weeks and fresh/chilled racks are now around US$12 per pound, 34% higher than a year ago. US YTD Lamb Imported Volume. Metric Ton Data updated through November 3, 2018 Northern Ireland Australian Lamb Racks, Fresh, Cap-off, 28 oz/up. 4-WK Moving Avg. Weekly Prices. Source: USDA 1,300 1,200 1,100 1, Total Australia New Zealand Canada Chile Iceland Uruguay Spain Mexico -2.9% -1.3% ,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 Mexico Northern New Spain Uruguay Iceland Chile Canada Ireland Zealand Australia Total ,233 48,654 71, ,888 49,283 73, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -1.9%

3 Page 3 US Domestic Lamb Cut and Primal Values Weekly Prices from USDA. Wt. Average 11/9/ /2/2018 w/w 11/10/2017 y/y US$/cwt US$/cwt % ch. US$/cwt % ch. Foresaddle 204 Rack, 8-Rib, Medium % % 209 Breast % % 207 Shoulders, Square Cut % % 210 Foreshank % % Neck % % Foresaddle Value % % Hindsaddle 232 Loin, Trimmed, 4x % % 232E Flank, Untrimmed % % 233A Leg, Trotter Off % % Hindsaddle Value % % Carcass Value % % Hindsaddle, Foresaddle and Total Lamb Cutout Value Source: USDA Mandatory Price Reporting System 500 Foresaddle Value Hindsaddle Value 450 Lamb Cutout

4 Page 4 Domestic Lamb Cutout Value, USA Source: Agricultural Marketin Service, USDA. $ per 100 lb. Dressed Carcass Yr Avg. % ch. vs. Yr Ago % ch. vs. 5-Yr Avg. Jan % 5.7% Feb % 8.3% Mar % 8.2% Apr % 8.1% May % 7.6% Jun % 8.2% Jul % 7.8% Aug % 5.7% Sep % 6.2% Oct % 6.0% Nov Dec Note: Monthly Cutout Value Calculated Using Weekly Data USA Domestic Lamb Cutout Value Monthly Avg. Price; Source: USDA Yr Avg Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5 Page 5 Slaughter Lamb Price, Sioux Falls, SD Basis Monthly Average Prices, lb., $ per 100 lb Yr. Avg. % ch. vs. Yr Ago. % ch. vs. 5-Yr Avg. Jan % 4.5% Feb % 9.6% Mar % 13.7% Apr % 7.2% May % 4.0% Jun % 1.2% Jul % -4.5% Aug % -10.7% Sep % -11.2% Oct % -11.6% Nov Dec Source: USDA Slaughter Lamb Price, Sioux Falls, SD Basis Monthly Average Prices, lb., $ per 100 lb Yr. Avg Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

6 Page 6 Imported Lamb Price Summary Source: USDA Agricultural Marketing Service, Mandatory Price Reporting 2018 YTD Volume 2018 YTD Wt. Avg. $ 2018 YTD Implied Value Nov 13, 2017 Nov 5, 2018 Nov 12, 2018 % ch. vs. Week Ago % ch. vs. Year Ago Fresh/Chilled Pounds $/lb. Total $ AUS Shortloin, 1-Rib, 0x0 5,761,568 $ 5.52 $ 31,787,613 $ 5.52 $ 5.74 $ % -5.6% AUS Shoulder, Square-cut 2,642,298 $ 3.03 $ 8,011,007 $ 3.01 $ 3.01 $ % 7.4% AUS Rack, FR, Cap-off, 28 oz/up 3,439,878 $ $ 35,971,287 $ 9.46 $ $ % 33.9% AUS Shortloin, 1-Rib, 1x1 77,951 $ 5.26 $ 409,914 $ 5.85 $ - $ - n/a n/a AUS Leg, semi bnls 512,429 $ 4.14 $ 2,118,952 $ 4.22 $ 4.25 $ % -9.6% AUS Rack, FR, Cap-off, oz 695,268 $ $ 8,133,379 $ $ $ % 20.1% AUS Rack, FR, Cap-off, oz 319,686 $ $ 3,745,768 $ $ $ % 15.5% AUS Foreshank, VP 275,679 $ 3.54 $ 976,464 $ 3.71 $ 3.55 $ % -7.9% Subtotal 13,724,757 $ 6.64 $ 91,154,386 $ 6.29 $ 6.95 $ % 12.8% Frozen AUS Leg, Long 6,795,996 $ 2.39 $ 16,254,213 $ 3.66 $ 3.67 $ % 3.5% AUS Leg, bnls 5,861,387 $ 2.39 $ 14,018,877 $ 3.85 $ 3.77 $ % 0.2% AUS Shoulder, Square-cut, bnls 2,268,199 $ 2.39 $ 5,424,928 $ 3.88 $ 3.77 $ % -5.3% AUS Shoulder, Square-cut 4,943,590 $ 2.39 $ 11,823,751 $ 2.57 $ 2.65 $ % 4.7% AUS Foreshank, LP 1,935,771 $ 2.39 $ 4,629,849 $ 2.46 $ 2.95 $ % 13.2% AUS Hindshank, VP 594,157 $ 2.39 $ 1,421,065 $ 2.43 $ 2.84 $ % 14.9% AUS Rack, FR, Cap-off, 28 oz/up 809,711 $ 2.39 $ 1,936,613 $ 9.77 $ $ % 33.2% AUS Hindshank, LP 373,722 $ 2.39 $ 893,844 $ 2.48 $ 2.77 $ % 43.6% AUS Rack, FR, Cap-off, oz 797,666 $ 2.39 $ 1,907,805 $ 9.64 $ $ % 23.1% AUS Rack, FR, Cap-off, oz 901,717 $ 2.39 $ 2,156,667 $ 9.44 $ $ % 26.3% NZ Rack, FR, Cap-off, oz 3,083,525 $ 2.39 $ 7,374,971 $ 9.94 $ $ % 23.0% NZ Rack, FR, Cap-off, oz 2,005,027 $ 2.39 $ 4,795,491 $ $ $ % 23.8% NZ Rack, FR, Cap-off, 20 oz/up 1,023,549 $ 2.39 $ 2,448,057 $ 9.87 $ $ % 21.6% NZ Rack, FR, Cap-off, 12 oz/dn 92,078 $ 2.39 $ 220,226 $ - $ $ % #DIV/0! Subtotal 31,486,095 $ 2.39 $ 75,306,355 $ 5.12 $ 5.81 $ % 14.3% 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.

7 Page 7 USA LAMB & MUTTON QUARTERLY SLAUGHTER, PRODUCTION, IMPORTS, EXPORTS AND DISAPPEARANCE. CARCASS WT. EQUIVALENT (CWE) =A x B A B C D E F G =C+D-E+F+G Year & Quarter Slaughter % ch. Avg. Carc. Wt. % ch. Comm. Lamb Prod. % 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 st Qtr % % % % % % 2nd Qtr % % % % % % 3rd Qtr % % % % % % 4th Qtr % % % % % % Year 2, % % % % % % st Qtr % % % % % % 2nd Qtr % % % % % % 3rd Qtr % % % % % % 4th Qtr % % % % % % Year 2, % % % % % % st Qtr % % % % % % 2nd Qtr % % % % % % 3rd Qtr % % % % % % 4th Qtr % % % % % % Year 2, % % % % % % st Qtr % % % % % % 2nd Qtr % % % % % % 3rd Qtr % % % % % % 4th Qtr % % % % % % Year 2, % % % % % % st Qtr % % % % % % 2nd Qtr % % % % % % 3rd Qtr % % % % % % 4th Qtr % % % % % % Year 2, % % % % % % st Qtr % % % % % % 2nd Qtr % % % % % % 3rd Qtr % % % % % % * 4th Qtr % % % % % % * Year 2, % % % % % % 2019 * 1st Qtr % % % % % % * 2nd Qtr % % % % % % * 3rd Qtr % % % % % % * 4th Qtr % % % % % % * Year 2, % % % % % % * Estimates Source: This balance sheet was developed and is maintained by the Livestock Market Informa on Center

8 Page 8 Lamb & Sheep Slaughter. Monthly. '000 Head Yr Avg. % ch Yr Ago % ch 5-Yr Avg. Jan % 1.8% Feb % -0.6% Mar % 1.1% Apr % -6.6% May % 4.0% Jun % -5.5% Jul % -4.8% Aug % 6.2% Sep % -6.8% Oct Nov Dec Source: USDA Lamb & Sheep Slaughter. Monthly. '000 Head Monthly Data. Source: USDA Yr Avg Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

9 Page 9 Lamb Yearling Dressed Weights. Monthly. Avg. Pounds per Carcass Yr Avg. % ch Yr Ago % ch 5-Yr Avg. Jan % 2.3% Feb % 2.5% Mar % 1.2% Apr % 1.2% May % -1.4% Jun % 1.2% Jul % 1.4% Aug % 1.2% Sep % 5.1% Oct Nov Dec Source: USDA Lamb Yearling Dressed Weights. Monthly. Avg. Pounds per Carcass Monthly Data. Source: USDA Yr Avg Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: USDA

10 Page 10 Lamb Yearling Production. Monthly. Carcass Wt. Basis. Million Lb Yr Avg. % ch Yr Ago % ch 5-Yr Avg. Jan % 2.5% Feb % -2.0% Mar % 1.0% Apr % -5.9% May % 2.2% Jun % -5.8% Jul % -6.0% Aug % 1.9% Sep % -5.5% Oct Nov Dec Source: USDA Lamb Yearling Production. Monthly. Carcass Wt. Basis. Million Lb. Monthly Data. Source: USDA Yr Avg Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

11 Page 11 Y/Y Ch. in Sep. 18 vs. Sep 17 US Mutton, Goat, Lamb Imports Source: USDA/FAS Units: Metric Tons World Total 281 Australia(*) 589 Mexico Iceland Other Canada -1 Chile New Zealand(*) Change in total imports: 3% -1,200-1, Quantity of US Imports of Fr/Frz Mutton, Goat, Lamb: World Total Source: USDA/FAS. Units: Metric Ton. Analysis by: Steiner Consulting ( ) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 5-Yr Avg

12 Page 12 Y/Y Ch. in Sep. 18 vs. Sep 17 US Mutton, Goat, Lamb Import Value ($) Source: USDA/FAS Units: US Dollars World Total Iceland Mexico -3,105,448 Change in total import value: -5% 551, ,531 New Zealand(*) 284,921 Other 121,564 Chile 43,833 Canada -16,108 Australia(*) -4,378,892-5,000,000-4,000,000-3,000,000-2,000,000-1,000, ,000,000 $ Value of US Imports of Fr/Frz Mutton, Goat, Lamb: World Total Source: USDA/FAS. Units: US Dollars. Analysis by: Steiner Consulting ( ) 120,000, ,000, ,000,000 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000, Yr Avg 20,000,000

13 Page 13 TOP US LAMB IMPORT MARKETS IN 2018 TOP US LAMB IMPORT MARKETS IN 2017 Total Volume and Country Shares for Period Jan - Sep 2018, MT Total Volume and Country Shares for Period Jan - Sep 2017, MT New Zealand 21% New Zealand 24% 99K 97K Australia 79% Australia 76% Quantity of US Imports of Fr/Frz Mutton, Goat, Lamb: Australia(*) Source: USDA/FAS. Units: Metric Ton. Analysis by: Steiner Consulting ( ) 14,000 12,000 10,000 8,000 6,000 4,000 2, Yr Avg Quantity of US Imports of Fr/Frz Mutton, Goat, Lamb: New Zealand(*) Source: USDA/FAS. Units: Metric Ton. Analysis by: Steiner Consulting ( ) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Yr Avg $ Value of US Imports of Fr/Frz Mutton, Goat, Lamb: Australia(*) Source: USDA/FAS. Units: US Dollars. Analysis by: Steiner Consulting ( ) 90,000,000 80,000,000 70,000,000 60,000,000 50,000, Yr Avg $ Value of US Imports of Fr/Frz Mutton, Goat, Lamb: New Zealand(*) Source: USDA/FAS. Units: US Dollars. Analysis by: Steiner Consulting ( ) 35,000,000 30,000,000 25,000,000 20,000,000 40,000,000 30,000,000 20,000,000 15,000,000 10,000,000 10,000,000-5,000, Yr Avg

14 Page 14 60, HEAD JANUARY 1 SHEEP & LAMB INVENTORY Source: USDA 1942: 56,213 50,000 40,000 30, : 33,170 20,000 10, : 11, : 5, , 5,230

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16 Page mil lb. Domestic Lamb Production + Imports Imports US domestic production