Lamb export demand expected to strengthen in 2022

And the United States has cemented its position as top export destination for Australian lamb export volumes with its market share of the trade moving up from 23 per cent in 2020 to 26.7pc in 2021.

This is according to the latest data from the Department of Agriculture, Water and Environment (DAWE) which also reveals China have retained second place with a marginal adjustment to their market share, from 23.9pc in 2020 to 23.7pc in 2021.

Head of Agribusiness Insights for ANZ Michael Whitehead said given the industry is now at a time of high supply, the market is really holding strong.

"Australia lost a bit of ground to NZ into the US for a small period last year, however it has hardly been noticed in the markets and in terms of that lose of demand to NZ, there was a silver lining to that cloud," Mr Whitehead said.

"If you put a classic economic analysis over it, effectively we only have one competitor in sheep markets in terms of global volume, and that is NZ."

But he said it hasn't just been a flash in the pan with the US having a consistent desire for sheepmeat for at least five years.

"Five or 10 years ago we looked at our lamb competition going into Europe and the UK and grizzled about how much better NZ were doing," he said.

"If we had to put a bet on one of the things that is going to go forward in 2022, sheepmeat global demand would be it."

Thomas Elder Markets analyst Matt Dalgleish said compared to the five-year average annual volumes of 57,141 tonnes, lamb export flows to the US were 23.5pc higher in 2021, highlighting the solid growth seen in this export destination in recent years.

"Australian lamb export flows to the USA saw some solid results during the middle of the year in 2021 and finished the year well with a near 18pc gain noted in flows during December," Mr Dalgleish said.

"There was 5861 tonnes shipped weight (swt) of Aussie lamb exported to the US in December 2021, bringing the total annual lamb exports to 70,606 tonnes, the highest annual figure for Aussie lamb exports to the US on record and 16.4pc higher than the levels seen in 2020."

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Mr Dalgleish said total Australian annual lamb exports to China in 2021 came in just 216 tonnes lower than the 2020 tally with 62,882 tonnes reported shipped last year.

"Lamb export volumes from Australia to China eased 20pc over December, registering just 3706 tonnes for the final month in the season," he said.

"Despite the softer finish to 2021, annual total volumes for Aussie lamb exports to China sit 14.5pc above the five-year average annual volumes of 54,909 tonnes swt."

He said in a positive sign for 2022, other lamb export markets (excluding the US and China) finished the 2021 season in an upbeat fashion.

"In December 2021 Australian lamb exports to "other destinations" increased 16.1pc to 12,401 tonnes swt," he said.

But Mr Dalgleish admitted much of the 2021 season was spent below the average seasonal trend and the total annual flows for lamb exports came in at 131,336 tonnes, representing volumes that are nearly 12pc below the five-year average annual tally of 149,095 tonnes.