China’s expanding middle class is dishing up export opportunities for Victorian lamb producers.
While sitting down to a Sunday lamb roast is a well-established tradition for many Australians, what’s less known is that demand for this much-loved meat is on the rise in China.
Australian lamb is tipped to be served in greater numbers in China in the coming years, thanks to growing demand for Western proteins being driven by an expanding middle class, whose ranks are expected to top 850 million by 2030. *
“Lamb has positioned itself well in Australia as a more premium meat, and such a strategy has the potential to grow the volume and value of lamb sent to China,” notes Angus Gidley-Baird, a senior analyst with RaboResearch Food & Agribusiness, Rabobank. “Growing incomes and the westernisation of diets and eating habits in China lends itself to increased consumption of proteins and higher value cuts.”
Victorian lamb producers stand to gain from increased consumption potential from our Asian neighbour, according to Gidley-Baird, as they generally have a lower cost of production than in other states.
The China-Australia Free Trade Agreement (ChAFTA), which came into force in December 2015, has also generated greater competitiveness of Australian lamb in China. “It will see sheep meat tariffs reduced from 12 to 23 per cent (depending on cut) to zero per cent over eight years and this will give us a level playing field with New Zealand, who established their FTA with China in 2008 and were able to export sheep meat tariff free from 2016,” says Gidley-Baird, who notes that Australia’s reputation of producing a very safe product has a very high standing in China, which is also driving exports.
So, what’s the 2018 forecast for Australian lamb production?
Rabobank anticipates a slight increase in production following a recovery in ewe numbers, and lamb prices are expected to remain strong given the current demand from China, lower production from New Zealand and restricted domestic supplies.
Victoria’s strong biosecurity stance, evidenced in our Australia-first rollout of an electronic sheep tagging system, is also positioning us well with trade partners such as China.
And while China buys more of Australia’s agricultural produce than any other country – in 2016, it contributed around $10 billion to Australian farmers and the broader agricultural sector – lamb exports to the Middle East and the US are also still driving export earnings. The top three markets for Victorian lamb in 2017, for instance, were the Middle East (32,693 tonne), other Asia (not including Japan, Korea or Taiwan) (26,971 tonne) and the US (20,534 tonne).
Discover more: lamb data insights
Read up on the export news for Victoria’s $4.3 billion livestock industry and watch videos showcasing latest industry developments and research from the annual Bestwool/Bestlamb conferences, supported by Agriculture Victoria.
*Source:  Credit Suisse, 2015, ‘Global Wealth Report 2015′