The Australian drought has taken a toll on the sheep and lamb population in the country; thus, the Australian sheep flock are at a 100-year low. As a result, Mintec prices are up 32% y-o-y in the first week of December 2019.
Prolonged drought in Australia has been detrimental for the pastures, which are the primary feeding source for the sheep and lambs. Along with the prolonged drought, the recent bush fires have worsened the situation. Fires have also impacted grain feeds, and Australia is already dependant on imports to arrange these feeds. Early estimates for sheep suggest that 13% of the national flock live in regions that have been significantly impacted and a further 17% in areas that are partially affected.
Australia is the largest exporter of sheep and lamb, with New Zealand being the second largest. As a result, any further drop in the sheep flock in Australia is anticipated to tighten the global supplies and add upward pressure to New Zealand sheep prices. New Zealand ships significant volumes into the EU and also, due to African Swine Fever, the demand for New Zealand sheepmeat from China is high. Thus, all the above factors are likely to result in high sheep and lamb prices in 2020.