Sheep and Goats
World sheep and goat inventories are up slightly in 1998 due to growth in the European Union, India and China. Australia and New Zealand continue to dominate world exports of lamb and mutton.
Projected sheep and goat inventories in the selected countries covered in this report are forecast rise slightly in 1998. Herd populations in the European Union, India, and China are growing. Australia and New Zealand's herds shrank early this year due to severe drought caused by El Niņo.
Lamb, mutton, and goat meat production in selected countries is projected to rise about 5 percent in 1998. Production gains were largely concentrated in the European Union, India, China, and Oceania. In India and Saudi Arabia where lamb, mutton, and goat are the meats of choice, consumption is also forecast to increase in 1998. Australia and New Zealand continue to dominate world exports in lamb, mutton, and goat, supplying an estimated 93 percent of exports from countries covered in this report in 1998.
The U.S. sheep industry continues to decline in 1998, with inventory and production falling. Entering 1998, the sheep inventory stood at 7.6 million head, 4 percent lower than January 1, 1997. The industry has been in a long-term decline since the 1940's. The repeal of the National Wool Act in 1994 marked the beginning of a more rapid rate of decline for sheep.
Exports of live sheep were up sharply in 1997 and the first half of 1998. Exports jumped from 320,000 head in 1996 to 1.4 million head in 1997, and a projected 1.3 million head in 1998. Most of these animals went to Mexico for slaughter as low U.S. market prices meant keeping an animal on feed in the United States was not cost effective.
Production of lamb and mutton fell 29 percent between 1990 and 1997, to 118,000 tons. High prices for slaughter lambs in 1996 and early 1997 temporarily slowed the decline of U.S. lamb and mutton production. However, prices dropped in late 1997, due in part to large U.S. supply. Downward pressure on U.S. lamb prices was so strong in 1998 that prices dropped to a three-year low during the Easter season, which is traditionally the lamb industry's period of greatest demand.
Price San Angelo Slaughter Lambs
|QI 1997||QII 1997||QIII 1997||QIV 1997|
|QI 1998||QII 1998||QIII 1998||QIV 1998*|
* Estimated price
U.S. consumption has also declined since the 1940's, and is expected to reach 150,000 tons in 1998. Lamb and mutton imports have increased sharply in recent years, rising from almost 19 percent of total domestic consumption in 1995 to an estimated 29 percent in both 1998 and 1999.
Australia's combined sheep and goat herd has declined from a peak of 170 million head in 1990 to less than 120 million head in 1998. As Australia's herd is overwhelmingly composed of sheep for wool production, the drop in world wool prices over the past decade accounts for much of the decline. Australia's sheep herd suffered from an El Niņo induced drought in 1997 and early 1998, which further reduced herd numbers.
Australia's live export trade was hampered by trade disruptions with several Middle Eastern countries in 1997, causing a drop of 16 percent from the previous year. A new development for Australian live exports was the growth of shipments to Mexico. Exports to Mexico more than doubled in just a year, to 167,000 head in 1997. This market has dropped in 1998, but may still reach 100,000 if exports remain steady throughout the rest of the year. The depreciation of the Australian dollar and losses to Mexico's herd from drought are contributing to the strong market for Australian sheep in Mexico.
The drought in Australia caused an increase in slaughter in 1997. Australia's herd is entirely range fed, so the loss of pasture meant producers tried to decrease supplemental feeding costs by slaughtering more sheep. Slaughter increased 13 percent to 31.7 million head in 1997 but is expected to decrease to 30 million head in 1998. Lamb and mutton production rose 8 percent to 632,000 tons in 1997 and is expected to rise 3 percent to 650,000 in 1998. Production is rising even as slaughter is falling in 1998 because increased slaughter of adult sheep has increased average slaughter weight.
Australia is the world's second largest exporter of lamb and mutton after New Zealand, accounting for an expected 37 percent of world trade in lamb, mutton, and goat in 1998. New Zealand specializes in lamb production and export, while Australia primarily exports mutton as an outgrowth of its wool industry. An unusually high amount of Australia's exports were mutton instead of lamb in 1997 and 1998, because of increased slaughter of adult sheep during the drought. A combination of factors contributed to overall exports of mutton and lamb increasing 5 percent in 1997 and a projected 6 percent in 1998. These factors include greater market share in the Middle East, a jump in exports to Mexico, and the depreciation of the Australian dollar. The low price of Australian lamb and mutton is helping it stay very competitive in Asia.
A severe drought in 1997 and early 1998 caused by El Nino brought New Zealand's sheep herd to its lowest level since 1957. New Zealand's herd is entirely range-fed, and the drought destroyed the grass in their pastures. The herd had fallen to 47 million head at the beginning of 1998. While the herd has been in decline over the past decade, the drought forced the sale of breeding stock.
Live exports have declined sharply to an estimated 80,000 head in 1998, following a New Zealand government ban on shipments of lambs under ten months old that went into effect in 1997. All of New Zealand's live exports are shipped to Saudi Arabia to provide fresh meat for Saudi markets.
Meat production will reach an estimated record high of 567,000 tons in 1998, in part because of increased slaughter following the drought. Producers are expected to retain more lambs and not sell off breeding stock in 1999, so meat production is expected to fall 12 percent in 1999. There will be an even more pronounced drop in mutton production, reflecting the number of breeding stock animals slaughtered in 1998.
New Zealand is the largest exporter of lamb and mutton in the world, exporting an estimated 462,000 tons in 1998. By itself, it is forecast to account for about 56 percent of all lamb, mutton, and goat exports in selected countries of the world during 1998. The largest export markets are the United Kingdom, the Middle East, and Asia.
Contrary to normal market dynamics, low prices for slaughter lambs in 1997 has caused an expansion of the European Union herd in 1998, increasing 2 percent to 99 million head. The majority of these animals are sheep. The herd grew because of low slaughter in 1997, which was the lowest in ten years at only 70 million head. Low market prices caused producers to hold back lambs from slaughter, keeping them in pastures in hopes that prices would rise soon. Since sheep are range fed in the European Union and grass was good last year, it was relatively inexpensive for producers to hold over sheep. However, this strategy did not pay off as prices did not improve.
Destocking began in early 1998 as pasture was overgrazed and the cost of retention became too expensive. The slaughter of held-over 1997 lambs added to new 1998 lambs is expected to bring slaughter up 7 percent in 1998, to 75 million head. Increased slaughter in 1998 is expected to raise production levels to more than 1.1 million tons.
There is substantial trade in live animals within the European Union, since geographic distances are close and regulations are standardized. The three member states that engage in the most live animal trade are France, the United Kingdom, and Ireland. France is a net importer, and the United Kingdom and Ireland are net exporters.
Access to the EU market is restricted by quota, with most European trade in these meats occurring between member states. The United Kingdom and Ireland are the major exporters, and France the major importer within the EU. But the United Kingdom imports the most lamb and mutton from outside the EU, and is expected to import 101,000 tons under its quota in 1998. Most of the United Kingdom's imports come from New Zealand.
The EU's annual per capita consumption is roughly 5.9 kg, compared with U.S. per capita consumption of 0.6 kg per year. The Bovine Spongiform Ensephalopathy crisis has not appreciably changed the EU's overall consumption of lamb and mutton. Lamb and mutton consumption in the United Kingdom rose 4 percent in 1996, but dropped back down again in 1997.
Turkey's herd continues to decline steadily, as it has for the past ten years. Sheep and goat numbers are expected to decline to 37.4 million head by the end of 1998. For many years, the lamb crop has not been large enough to replace the number of animals exported and slaughtered each year.
Turkey was once an important supplier of live sheep as well as lamb and mutton to the Middle East. In 1994 Turkey exported 1.7 million head of sheep, almost exclusively to the Middle East. Exports declined year by year so that Turkey is expected to export a mere 300,000 head in 1998, a decrease of 82 percent. Lamb and mutton exports have declined by roughly the same amount, to a mere 1,000 tons a year. These drops in exports were caused by both inefficient production practices and increasing domestic demand from a rapidly growing population. High import duties on feeder and slaughter sheep, as well as meat, keep imports at very low levels.
Saudi Arabia's herd continues its strong growth in 1998. Estimates show that the herd has grown 54 percent since 1994. Saudi Arabia imports more live sheep and goats than any other nation in the world, importing an estimated 6 million head in both 1998 and 1999. Most of these animals are imported because Saudi Arabia has a marked preference for fresh, chilled meat, and does not have a large enough domestic herd to fulfill domestic consumption. Of the 6 million animals imported, 1 to 2 million will be sacrificed during the annual Haj, a religious pilgrimage when Muslims travel to Mecca in Saudi Arabia.
Consumption has continued to rise in recent years, as has meat production. Estimated consumption for 1998 is up 7 percent from 1997. Imports of meat and live animals for slaughter account for roughly 70 percent of consumption. Saudi Arabia is the second largest importer of lamb, mutton, and goat in the world, after the United Kingdom. Forecasts indicate that Saudi Arabia will account for about 14 percent of total world imports of lamb, mutton, and goat in 1998. Saudi Arabia demands Halal meat that has been slaughtered according to Muslim religious requirements.
India's sheep and goat herd is the second largest in the world, with 178.5 million head at the start of 1998. The herd has grown steadily at roughly 1 percent a year for the past decade, with 70 percent of the herd composed of goats.
Sheep and goats are raised primarily for their meat in India, as it is considered the most acceptable meat for Hindus who eat meat occasionally. India also has a considerable Muslim population that eats lamb, mutton, and goat. Slaughter frequently occurs at the household level, but some animals are purchased and brought to urban areas for slaughter.
Chinese officials have acknowledged that their national animal inventory and slaughter data in recent years have been inflated. However, new official statistics have only been released for 1996 and 1997. This publication does not include a 1999 forecast, or the revised statistics for the previous years (please refer to the feature article on China for more information).
China has the largest sheep and goat herd in the world, and the herd is growing rapidly. Approximately half of China's animals are sheep and half are goats. This still leaves China with more sheep than any other country, including Australia. Expansion of China's herd started its period of rapid growth as a result of a government ruminant animal promotion program. Sheep and goats were traditionally found in the semi-desert Northwestern region of China, where the Muslim population is concentrated. The government promotion program is now providing assistance to small local farmers in crop production areas to start raising sheep and goats, so that the animals can eat crop residues such as corn stalks.
Current domestic consumption is roughly double what it was ten years ago. The government's plan to expand sheep and goat production brought the meat to areas of the country that had not previously consumed much lamb, mutton, and goat. More Chinese now eat lamb, mutton, and goat at home and in restaurants.
Box on Halal Slaughter
For further information, contact Suzanne Miller, (202) 690-3129.