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Lamb/Sheep Market Update
Ontario Sheep Convention
October 27, 2017
Jason WoodProvincial Livestock Market Analyst
Alberta Agriculture and Forestry
Outline for Today• Global Market • Inventory and production
• Trade
• Consumption
• Prices
• Canada• Inventory and production
• Price & seasonality
• Supply & Demand
• Consumers
• Market comments 2
Global Market Overview
3
World Sheep Flock
Up 15% since 2002Asia and Africa
Wool prices dropSwitch to cattle
4
Top Five Sheepmeat Producers
• Annual average 1.2% over 54 years• Production + 82% • Beef +148%• Pork +457%• Chicken +3700%
5
Top 10 Global Exporters (2013)
6
Top 10 Global Importers (2013)
7
Per Capita Consumption kg (2016)
3.06
1.41.03
8.55
8
Global Meat Indices
Source: agri-benchmark; FAO
2014-16Pork and sheepmeat -28%Poultry -23%Beef -18%
9
Global Sheep Prices
10
Canada
11
Flock Size Declines:US 27 million (1961)NZ 43 million (1982)AU 109 million (1970)Canada 180 thousand (2004)
12
Change in Provincial Inventories
• 2011 versus 2016 Census of Agriculture 13
Slaughter
14
Lamb Supply & Demand
15
Consumption & Market Price
16
Montreal Wholesale Price
• A1 Fresh Choice Lambs 15-25 kg Hide Off
2017 wholesale price up Quebec +7.2%West +13.7%
17
Strong Domestic Demand
2011 to 2016Price index increased 9%Demand index decreased 2.8%
18
Lamb incidence has risen 17% on Canadian restaurant menus since 2015
Lamb Incidence across Canadian Commercial Operators
1,012
266
1,180
270
Item Incidence Operators Menuing
2015 2016
Traditional CDR, 27.5%
Fast Casual, 23.6%
Upscale CDR, 19.7%
Fine Dining, 12.9%
Midscale, 5.8%
Contemporary CDR, 5.3%
Quick Service, 4.4%
Food Trucks, 0.8%
Lamb Item Distribution
CDR= Casual Dining RestaurantsCDR Segments into Upscale CDR, Traditional CDR and Contemporary CDR
MDR: Midscale Dining Restaurants
19
Lamb is often featured centre-of-the-plate on Canadian foodservice menus; Asian-themed lamb entrees are trending
670
107
34
28
22
21
21
17
16
15
14
14
586
98
34
25
20
12
24
3
17
14
5
5
Lamb Entree
Curry Bowl
Lamb Sandwich
Asian Noodles
Satay/Kabob
Mixed Grill
Stir Fry
Asian Combo Meal
Specialty Burgers
Non-Breaded Protein App
Choice of Protein AsianBowl
Gyro
2016 2015
Leading Lamb Formats on Top Canadian Foodservice Menus
FASTEST-GROWING LAMB FORMATS % GROWTH
Asian Combo Meal 466.7%
Choice of Protein Asian Bowl 180.0%
Gyro 180.0%
Protein Side 100.0%
Soup/Salad & Sandwich 100.0%
Mixed Grill 75.0%
Lamb Wrap 20.0%
Lamb Entree 14.3%
Asian Noodles 12.0%
Biryani 10.0%
20
The Lamb Consumer
Gender
59%Of Men
40%
59%
Female
Male
46%
49%
44%
53%
52%
Matures
Boomers
Gen X
Millennials
Gen Z
53%Of Millennials
53%Of Ontarians
49%
53%
38%
48%
49%
Quebec
Ontario
AtlanticCanada
BritishColumbia
The Prairies
49%
58%
51%
50%
50%
46%
48%
$150K +
$100K - $150K
$75K - $99.9K
$50K - $74.9K
$35K - $49.9K
$25K - $34.9K
Under $25K
Generation Region HH Income
58%Of $100K-$150K
The lamb consumer skews male, Millennial/Gen Z, slightly higher Ontarian and higher-income
21
Consumers would consider ordering lamb over any other alternative protein
49%
39%
30%
29%
26%
24%
21%
14%
12%
12%
11%
10%
9%
6%
6%
5%
Lamb
Bison
Rabbit
Venison
Elk
Goat
Wild Boar
Guinea fowl
Ostrich
Crocodile
Emu
Musk Ox
Horse
Seal
Rattlesnake
Camel
Interest in Alternative Proteins% of consumers who would consider ordering the following
22
Market Factors/Comments
23
Market Influences
• Estimated Alberta Price – 120 lb. Slaughter Lamb
BSE
Economic meltdown
High Feed Costs (RFS)
PEDv
Avian flu
US drought
Increasing imports from AU
Australian drought
Increasing global meat supplies
Beef, pork and poultry prod’n up
Low beef numbers
Strong domestic demand/limited prod’n
By-product values flat
Flat growth in major exporting countries
CDN over supply
24
Lamb vs. Steer vs. Hog
• Slaughter lamb prices have held up better than cattle and hogs• Cattle fell 31%, hogs fell 42% and lambs fell 6%• Since the low in 2016 lamb price have rebounded and found stability while
cattle have remained more volatile
25
Comparison of Lamb Prices
Ontario lamb prices average: 29% higher than Alberta37% higher than Quebec
26
Ontario Market Lamb Price
27
Ontario Lamb Price Seasonality
• Seasonal price index for average Ontario market lamb (95-109 lbs.)
28
Eastern Canada Slaughter Seasonality
29
Dollar Support Weakening
30
Market Factors• Volatility in commodity markets
• Co-product (drop credit) values improving
• Flat consumption (CAN/US)
• Increased production of beef/pork/poultry
• Domestic production declining
• Domestic demand is changing (ethnic/foodservice/healthy lifestyle)
• Stronger dollar
• Trade agreements 31
Trends• Globally:
• Consumption increases – developing countries
• Trade increase 15% by 2025
• Supply increasing
• Changing demographics
• Changing diets
• Environmental concerns
32
Trends• Canada:
• Decreasing flock
• Increased reliance on imports
• Protein: Plant vs. Animal
• Stable consumption at rising prices
• Increased foodservice offerings
33
Market Comments
• Price support remains
• Domestic demand
• Imports may tighten
• Australian processing capacity
• Reduced mutton supply (AU & NZ)
34
