Launching Meat and Livestock Australia’s (MLA) 2010 Sheep Projections, MLA’s sheepmeat analyst Kara Tighe said Australian lamb production was on track to post a record high this year, up two per cent on last year’s levels, despite the sheep flock likely to reach its lowest level since 1905.

“The key factor underpinning this production growth is improved pasture conditions in southern Australia combined with the positive price signals for lamb that continue to drive the shift in flock composition towards prime lamb production,” Mrs Tighe said.

The sheep flock is expected to post further falls this year, however the rate of liquidation is forecast to slow to around two per cent this year, to 69.9 million head.

“Healthy profits for most prime lamb producers are predicted as near insatiable demand in some markets, matched with tight global supplies, should see the maintenance of high saleyard and over-the-hooks prices, Mrs Tighe said.

However, Australian exporters may endure amore difficult year, due to the strong Australian dollar and high lamb prices.

“The global financial and economic crises and runaway Australian dollar failed to contain the momentum of Australian lamb in 2009, with record high prices and export volumes and strong domestic demand.”

“Australia’s lamb consumption is set to rise again in 2010, increasing just over one per cent to reach 241,000 tonnes, despite the recent sharp rise in retail prices,” Mrs Tighe said.

As in 2009, the high Australian dollar is expected to be offset by strong export demand and lower global lamb supplies, with exports forecast to rise two per cent to 168,000 tonnes shipped weight (swt).

“The Middle East is projected to remain a standout market for Australian lamb with shipments forecast to rise eight per cent year-on-year to 38,900 tonnes,” Mrs Tighe said.

On the sheep front, saleyard, live export and over-the-hooks prices are expected to post new highs as sheep turn-off declines and Middle Eastern demand remains strong.

Mutton production is forecast to fall 13 per cent in 2010 year-on-year to 188,000 tonnes carcase weight (cwt) while live sheep exports are also expected to fall 13 per cent to 3.1 million head.

Mutton exports are predicted to decline by 12 per cent to 119,000 tonnes swt.