Australian sheep herd could reach 15-year high - but not until late 2023

Australian sheep stocks should reach 70 million head this year, higher than previously expected, as weather conditions improve on the continent, Meat and Livestock Australia said in its latest outlook for the sector.

The herd is expected to grow in the coming years and reach 76 million by 2023, the highest number since 2007. MLA market intelligence manager Stephen Bignell said the eastern states were key drivers of this growth, underpinned by strong seasons.

“The pace of the national recovery has been even faster than originally anticipated as producers are using the good season to increase stock numbers. We expect the season to have a positive impact on carcass weight, which has been revised to 24.8 kg for lambs. Lamb slaughter should also rise by 3% this year, although sheep slaughter is forecast to be at its lowest level since 2011 due to additional stock retention,” Mr. Bignell said.

He said the combination of increased slaughter levels and lamb carcass weights was a good sign for mutton production, which will be the third-highest on record in 2021 before a new record is reached in 2022.

“We expect lamb production to pick up well later this year, supported by new spring season lambs and old season lambs kept by producers for additional weight gain. There are currently processing restrictions in place in Victoria due to the recent COVID-19 outbreak which could affect these numbers given that the state handles 50% of the nation's lambs slaughter, however we expect NSW to take on additional production if needed. as it was in a similar situation last year,” Mr. Bignell said.

Despite strengths in production, slaughter and stock growth, Bignell believes the sheep industry still faces some challenges that need to be addressed.

“Live sheep exports may fall this year as a strong season and high domestic livestock prices put downward pressure on live meat exports. There are also the lingering effects of COVID-19 causing disruptions in some of our key overseas markets, including the Middle East, but we expect a recovery as the economy returns to pre-pandemic levels,” Mr. Bignell said.

Domestic mutton prices are expected to remain high through the end of the year and beyond, supported by rising demand, including from export markets where mutton is growing in popularity as a niche product.