Sheep and goat inventories are expected to remain relatively stable in 2000, as are lamb meat production and exports. Despite the tariff-rate quota, imports of lamb meat by the United States increased in 1999, and are projected at 52,000 tons in 2000. A WTO panel was formed to hear Australia and New Zealands dispute on the U.S. TRQ.
Sheep and goat inventories for the countries tracked by USDA were expected to total 853 million head at the beginning of 2000, a slight decrease from the beginning inventory level in 1999. Lamb, mutton, and goat meat production is expected to increase only slightly in 2000 as production increases in China and Australia are offset by declines in most other producers. Meat exports in 2000 are virtually unchanged from the previous year as a projected 5,000 ton increase in Australian exports is offset by an anticipated 8,000 ton decline in exports from New Zealand.
In 1999, U.S. lamb and mutton imports increased marginally to 51,036 tons and are expected to reach 52,000 tons in 2000. Despite the tariff-rate quota (TRQ) that the United States imposed on imported lamb meat in July 1999, lamb meat imports rose 7 percent to 37,672 tons in 1999. One reason was the increase in shipments in the months preceding the implementation of the lamb TRQ. While imports of lamb were on the increase, U.S. mutton imports declined 15 percent to 13,364 tons.
Adoption of new preservation technologies by Australia and New Zealand has increased shelf-life of packaged lamb products dramatically. This has allowed these two suppliers to ship increasing amounts of fresh/chilled lamb meat to the United States. In 1994, U.S. total fresh/chilled lamb meat imports on a product weight basis totaled 3,284 tons and increased to 18,270 tons in 1999. Over the same time period, frozen lamb meat imports on a product weight basis rose from 13,214 tons to 15,582 tons. As traders attempted to maximize profits under the constraints of the TRQ, fresh/chilled lamb meat imports surpassed frozen lamb meat imports for the first time in 1999.
On March 22, a WTO panel was formed to hear Australia and New Zealands dispute with the United States on the lamb meat TRQ. Presentations before the panel are scheduled for late May and early July with a final outcome expected early next year.
Australian lamb production is expected to increase nearly 2 percent in 2000. This follows the increase in saleyard prices for lamb in the September quarter of 1999 which averaged 15 percent above the previous year on strong domestic and export demand. Australia has also mounted a strong domestic promotion program for lamb. With 70 percent of lamb production consumed domestically, the increase in domestic consumption has been a major factor in the price increase. Australia is expected to fill its quota allotment to the United States in 2000 and overall exports will increase 5,000 tons to 380,000 tons.
New Zealand sheep numbers eased slightly to 45.8 million head on January 1, 2000. Prolonged high temperatures due to La Niņa caused a bad outbreak of facial eczema, but the impact of this was mitigated by a mild winter and good spring. Meat production in 2000 will remain relatively steady at 497,000 tons.
Although lamb meat exports are projected to decline 2 percent in 2000 to 392,000 tons, sales to the United States are expected to be similar to 1999 levels of around 14,000 tons. Moreover, New Zealand is meeting strong demand for lamb in Europe, and filled its allowable quota of 225,000 tonnes in the past year. Of this, 23,500 tonnes consisted of the high value chilled product, an increase of 3,000 tonnes on the quantity sold the previous year. Prices for New Zealand lamb exports have improved remarkably in the European Union, particularly the UK, Belgium, the Netherlands, France, and Germany.
Note: Beginning with publication of the October 2000 "Livestock and Poultry: World Markets and Trade", commodity and country analysis and tables for tallow and grease, hides and skins, and sheep will be discontinued. This decision was made in response to discussions with the relevant U.S. industries, surveys of FAS overseas offices, and other feedback. The Dairy, Livestock and Poultry Division will continue to monitor and analyze market developments relating to these commodities and will continue to publish the results of our analysis through International Agricultural Trade Reports and other means. The latest information will be posted on the DLP Home Page: www.fas.usda.gov/dlp/dlp.html
For further information, contact Jose Rivera, (202) 720-1349.