Sheep Industry News January 2022

for lamb is expected to surge. Further, demand will continue to expand as restaurants and hotels fully reopen. According to the re port, “lamb is still an unfamiliar protein to a large proportion of U.S. consumers, however, their willingness to try it has been increasing over time.” Total lamb and mutton imports January to October were 295 million lbs., up 18 percent year-on-year. In January to October lamb imports totaled 221.1 million lbs., up 28 percent year-on-year. Austra lian imports saw 165.6 million lbs., up 26 percent, and New Zealand imports totaled 52.2 million lbs., up 38 percent. Mutton imports were 73.9 million lbs. in January to October, down 6 percent year-on-year. Australian mutton imports saw 65.3 million lbs., down 11 percent, and New Zealand mutton totaled 7.2 million lbs., up 36 percent. Total lamb exports were 363,000 lbs. in January to October, down 16 percent year-on-year. About 60 percent of American lamb exports are shipped to Mexico, with the remaining exports to Caribbean Island nations. Mutton exports saw 2.5 million lbs. in January to October, down 86 percent year-on-year. MEAT MARKET SOFTENED Last November, the wholesale lamb market had backed off its $7 per lb. record highs observed in August and again in October, but remained historically high. The lamb cutout value averaged $676.35 per cwt. in November, down 2 percent monthly and up 47 percent year-on-year. All primals saw lower values in November. The 8-rib rack, medium, averaged $1,410.42 per cwt., the shoulder, square-cut, averaged $97.20 per cwt., the loin, trimmed, 4x4, averaged $1,036.68 per cwt., the leg, trotter-off, saw $608.44 per cwt. The softening in prices might be a result of an overheated market. Year-to-year, the primals remain sharply higher than November 2021. The rack was up 56 percent year-on-year, the leg was up

monthly, and 14 percent higher year-on-year. According to the Meat & Livestock Australia Sheep October Update , the 2022 EMI price will remain dependent on demand from the major wool manufacturing countries of China, India, Czechia and Italy. From Oct. 1 to Sept. 30, 2021, the American total wool export value was up 64 percent year-on-year and up 75 percent by value. In early December, ASI Wool Consultant Barry Savage commented that while increased wool exports is significant, perhaps more important is “spreading the export risk.” Last season, wool exports were shipped to a broader number of countries with China remaining important, but Mexico, Italy and Bulgaria picking up export shares. This year, the U.S.-Australian exchange rate will continue to be a barometer of international wool prices and trade. In January to early December 2021, the Australian dollar lost 7 percent in value from 0.77 to 0.72 Australia dollar/U.S. dollar, a depreciation which will make Australian sheep, lamb and wool exports more competitive on the international market. During the last two years, the price of coarser wools has continued to weaken while generally finer wools rebounded from the mid-2020 low of the pandemic. An estimated 66 percent of American wools are 18.6 to 24.5 um (micron) and another 31 percent are 24.6 to 32.5 um (micron). About 1 percent of American wools fall into the finer end, 18.5 micron and finer, and about 2 percent of wools are 32.6 um and broader. In November, the finer wools collectively gained 15 percent year-on-year, but coarser wools lost 8 percent in Australia. It is believed that a considerable amount of wool remains stored on farm, and that this wool is predominately coarser wools. Savage commented that marketing this wool – particularly if looking to export – will be challenging given high overseas freight rates. Overall, this year should see improved marketing conditions for American wool with confidence in 2022 economic growth already priced into the stronger Australian wool market in December.

53 percent, the loin was up 46 percent, and the shoulder was up 36 percent.

AUSTRALIAN WOOL MARKET MAKES A COMEBACK

The Australian Eastern Market Indi cator in U.S. Dollars was 4 percent shy of its pre-pandemic levels, according to the Australian Wool Innovation Market Intelligence Briefing in November. AWI wrote, “the price discrepancy between the finer wools and broader wools has grown as a result of the pandemic.” This year, finer wools might continue to strengthen while coarser wools struggle. In November, the EMI averaged U.S. $4.42 per lb., down 1 percent

8 • Sheep Industry News • sheepusa.org