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Strong returns for lamb exporters

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Australian lamb prices have risen to record levels, according to a report released by Meat & Livestock Australia last week. MLA's 2011 Sheep Industry Projections reports the drought in Western Australia has reduced lamb numbers, causing prices inflated by demand to remain steady for the first few months of this year. Sylvia Athas, senior economist of Meat and Livestock Australia, predicts prices will ease mid-year as supplies increase. "The Australian flock is expected to grow by 2 percent as the favourable seasonal conditions in the Eastern states produce exceptional lambing rates and continue to stimulate strong restocker demand and ewe retention." Domestic and international sales are projected to increase by 7 percent in 2011. Demand is rising in the Middle East as well as in South East Asia as lamb consumption increases in popularity. Athas is concerned local supplies may not be adequate to meet growing demand for live sheep, potentially causing the export market to drop. "The drought depleted supplies in WA and the lack of suitable cull wethers as a result of the reduced merino flock could see exports fall 6 percent to 2.8 million," she said. "Mutton exports are forecast to recover slightly, increasing 12 percent." Lamb farmers must balance cashing in on current high prices against maintaining stock levels to rebuild depleted flocks.

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