Sheep Industry News September 2023

and New Zealand are the primary suppli ers of lamb to the United States, accounting for 71 percent and 27 percent, respectively, of total imports through the first half of the year. The remaining 2 percent of total lamb and mutton imports came from Chile, Canada, Uruguay, Ireland, Iceland, Mexico and the United Kingdom. Through the first half of the year, lamb imports from Australia and New Zea land are down 18 percent and 25 percent, respectively. LMIC is forecasting total lamb imports for 2023 to decline 22 percent from last year. Projections released from Meat and Live stock Australia in July place the 2023 flock size at 78.751 million head, up 3.6 percent. MLA is forecasting the flock size to rise another 0.6 percent in 2024 to 79.222 mil lion head followed by a 1.9-percent decline to 77.741 million head in 2025. The higher flock size is expected to raise lamb and mut ton production by 4 percent, 3.7 percent and 2 percent in 2023, 2024 and 2025, respec tively. MLA is forecasting continued growth in

exports based on higher exportable supplies due to rising production, growing global demand for sheep meat, and a continued de cline in New Zealand’s sheep flock. MLA did note that the Australian dollar has strength ened relative to the U.S. dollar, which could be a headwind to competitiveness of their exports as it makes their product more expensive for importing countries. WOOL The Australian wool market went on its mid-year recess the third week of July and auctions started back up the second week of August. At the end of the previous season, sales data showed 43,697 bales offered the final week, which was the highest in nearly two months. Through most of June, prices across most microns had been under pres sure. During the first two weeks of July, prices generally recovered those losses leading up to the mid-year recess. Prices for 17 to 22 micron wool gained 4 to 13 percent, while 25 to 28 micron wool prices rose 6 to 9 percent. The Eastern Market Indicator was

1,179 ($AUS/kg) at the end of the prior sea son, which finished on a stronger note rising almost 5 percent in just two weeks. As sales resume in early August, a larger number of bales are expected to be offered as supplies accumulated during the break. Prices for the fine wools (17 to 19 micron) and medium wools (20 to 24 micron) opened on a muted tone while the crossbred wools (25 to 32 micron) held steady with prices that were reported at the close of the season in July. The EMI fell slightly to 1,176 ($AUS/kg) at the start of the season. Looking ahead, there are a few driv ing forces that could pressure wool prices during the remainder of 2023. Most of the factors are centered around global economic conditions as looming concerns surround global consumer spending, which has shown indications of weakness. In the United States, interest rates have proven to be a headwind and will likely re main so until rates are lowered. The Federal Reserve Bank of New York recently reported that consumer credit card balances jumped during the second quarter of this year to a record high level of $1 trillion. China’s economy will be of interest as it is a large purchaser of wool, which could influ ence prices. Indications are showing that China’s economy might be slowing, which could limit its demand for wool for domestic use as well as for manufacturing purposes for export markets, potentially impacting wool prices. Exchange rates will likely continue to be a factor influencing wool prices in the near term.

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