There are challenges ahead for Australia's mutton exports, as key markets struggle to manufacture pre-COVID-19 inventory with mutton consumption down.
That's according to Thomas Foods International general manager of sales Jonathan Bayes, who said global mutton markets were in "unprecedented times".
"It's certainly challenging to sell mutton at the moment, it doesn't matter which market," Mr Bayes said.
"You can forget seasonal trends, statistics and historical data, like many other industries dealing with coronavirus, we are in somewhat unchartered waters."
He said there were only a handful of markets buying Australian mutton - the US, China, Malaysia with small pockets of light sheep scheduled for upcoming Eid to be scattered across South East Asia and the Middle East.
And then there were premium buying markets sprinkled across Europe, Japan and the Caribbeans, whose buying activity had become "basically dormant" as coronavirus dampened travellers' plans to visit the holiday destinations.
"There are a lot of cheaper proteins out there at the moment and with the tough times, manufacturers are looking at these alternatives to bring down their costs," he said.
In Meat & Livestock Australia's 2020 Sheep Industry Projections June update, it indicated that lamb production was expected to fall 2 per cent from 504,000 tonnes carcase weight in 2019 to 492,000 tonnes cwt in 2020.
Mutton production was forecast to see an even sharper decline, contracting by 29pc from 227,000 tonnes cwt in 2019 to 161,000 tonnes cwt in 2020.
MLA said this meant lamb production would be at its lowest level since 2014 and mutton at its lowest level since 2011.
Mr Bayes said despite the current market conditions, things can change quickly, however for the immediate to short-term outlook he didn't see mutton exports improving irrespective of brand reputation.
"The Australian sheep numbers have been declining for some time and flock restocking had been stronger after some much needed rain in areas," he said.
"This will hopefully put us in good stead with consistent numbers for future lamb production and processing."
As a result of the reduced slaughter forecast, and with COVID-19 causing a softening of the global environment, export forecasts for the year have also been revised lower.
For the year to April, exports of mutton had already been impacted by lower slaughter levels, down 10pc on 2019 volumes of the same period.
Lamb exports in 2020 are forecast to reach 282,000 tonnes shipping weight, down 1pc on 2019 volumes, while mutton exports are forecast to decline a significant 31pc to 129,000 tonnes swt.
To put these falls into context, Meat & Livestock Australia senior market analyst Adam Cheetham said it was important to remember that we were coming off two years of extremely high sheep turn off.
"The fall is somewhat exaggerated by the fact we had such high kills in 2018 and 2019," he said.
"When we look at this year, the improving conditions has helped, and it's great we've had that, but that's going to see a greater retention of stock on farm.
"And there's a much smaller pool of livestock out there anyway as the flock is significantly smaller as a result of two years of drought and destocking."
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To understand the impact our reduced slaughter levels would have on international supply, he said you had to look at where Australia was situated in a global context.
"Of all of the mutton we produce domestically, we export 90pc of it," he said.
"Our largest market for mutton is China, that's where most of the product is destined, and last year China purchased 45pc of all the mutton we exported.
"But when we look at our sheepmeat exports, Australia only accounts for 7pc of global supply, so we supply a relatively small amount in the global market."
He said there had been an increase in mutton intake in the United States this year.
And contrastingly, there had been a contraction in China's own supply this year.
"Some of that's to do with them increasing their own flocks," he said.
Knowing our contribution on a global scale was relatively low, Mr Cheetham said our lessened supply wouldn't cause major impacts.
And it wasn't the first time Australia had experienced a contraction in supply.
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