Foreign Policy magazine ran a column on the lamb industry and stated that the U.N. Food and Agriculture Organization is forecasting a 300,000-ton shortage in the global lamb supply over the next five years. This is good news for long-struggling farmers in Australia and New Zealand, the world’s two largest sheep producers. Below is an explanation of the supply and demand pressures.
Several factors account for the global sheep shortage. Farmers in the United States have largely gotten out of the ovine game, and the country’s stock has fallen from 64 million sheep to just 6 million since the end of World War II. British farmers have also cut back on sheep production since the 2001 hoof-and-mouth scare. In Australia, falling wool prices in the 1990s and crippling droughts hit the industry hard.
At the same time, global demand for sheep meat has grown with the increase in the standard of living in Asian economies – especially India and China. However, Saudi Arabia and Kuwait alone now account for more than half of Australia’s sheep exports.
Australia and New Zealand still dominate the world sheep trade, though China is gaining quickly. But because sheep can take years to raise and are expensive to maintain, the global market is unlikely to respond to the increased demand anytime soon. The future, for these countries, is looking mighty woolly.