MLA has revealed its price and production estimates for 2025

MLA is tipping a herd and flock reduction and have revealed the price estimates on young cattle and feeders as well as trade and restocker lambs. See the industry’s reaction.

Cattle prices are being tipped to plateau and heavy and trade lamb prices may rise slightly by this winter.

It comes as the nation is poised to continue breaking production records at a time when both the Australian cattle herd and sheep flock decline.

The cattle herd is expected to decline to 30.1 million by June this year, and to continue to decline into 2027, due to increased turn-off of older breeding cows and dry conditions in the south.

The sheep flock is estimated to decline by 5.9 million, or 7.4 per cent, to sit at 73.2 million by mid year, and then stabilise in the next two years, also due to drought in the south as older breeding ewes are sold off.

This is according to key insights revealed on Monday by Meat and Livestock Australia in its 2025 projections.

The prices forecast – an aggregated analyst price estimate using experts outside of MLA – points to an upwards trend on heavy and trade lamb but softening trend on restocker lamb into June this year:

THE National Heavy Lamb Indicator is tipped to hit 842c//kg carcass weight, an increase from the current level of 806c/kg.

THE National Restocker Lamb Indicator is expected to decline to 696c/kg by June 2025, though MLA notes “seasonal price weakness in winter may limit growth”. It is now at 738c/kg.

THE National Trade Lamb Indicator is forecast to increase to 821c/kg as lamb and mutton supply tightens and processing capacity expands. It is currently at 782c/kg.

On cattle, the outlook is subdued:

THE National Young Cattle Indicator is forecast to trend sideways, declining 1 per cent to 358c/kg liveweight by June 30. It is now at 342c/kg.

THE National Feeder Steer Indicator is tipped to lift a modest 1 per cent to reach 364c/kg.

THE National Heavy Steer Indicator is forecast to ease 1 per cent to 351c/kg.

MLA is also forecasting production records will continue to be broken as carcass weights remain high.

Lamb slaughter is expected to remain high throughout 2025 as the second largest annual number on record at 26.2 million head.

MLA is also pointing to tight global supplies as the US begins the long-overdue herd rebuild and drought conditions in Brazil ease.

MLA also reports tight financial conditions are impacting many producers around the nation.

It’s March 2025 Australian Cattle Industry Projection reports production costs remain a significant concern for producers, with interest rates, exchange rates and other market forces affecting profit margins.

Producers have also moved to draw down on Farm Management Deposits, with 2023 representing, for the first time since the scheme’s inception, the total value of

accounts fell, according to MLA.

“As of late 2024, $994 million was held in 7209 beef Farm Management Deposit accounts,” the report states.

“Additionally, $1.4 billion and $353m were held in grain-sheep/beef and sheep-beef respectively.

“Beef accounts have declined significantly. Over the 12 months since, producers have continued to withdraw money out of FMD accounts, resulting in a $164 million (14 per cent) reduction.”

Industry responds on forecasts

Following MLA’s forecasts, Rabobank has also tipped a stable outlook for prices.

RaboResearch analyst Angus Gidley-Baird said “with favourable seasonal conditions and improving US demand for imports, we believe Australian cattle prices will remain steady with some upside through the first half of 2025, although US tariff activity does create some uncertainty”.

Tarcombe Hereford’s Tim Hayes, Ruffy, said the mood around cattle prices was “generally positive”.

“On the demand side, as soon as the south gets a decent rain you will see store cattle prices shoot up,” Mr Hayes said.

“Here, we do need a good break before April.”

In South Australia, Will Watson, Binnowie Angus at Coonalpyn said he had been feeding his 400 breeders since Christmas andwhile it was “tough going at the moment, we keep pushing forward as I think the outlook for the cattle job is good”.

“Some clients have sold off cattle, others cut back on costs by not buying bulls, but in general I think the job will be steadyuntil we get decent rain and we grow some feed in southern Australia.”

Sheep and wool producer Roger Polkinghorne, Charinga Poll Merino stud, Berrimal said he was “very concerned about profitability, I don’t think there has been enough sheep and wool producer profitability in recent years”.

Mr Polkinghorne said he felt the flock would decrease in size faster than MLA predicts, due to the “subdued profits” withthe reduction in the “maternal side” likely to lead to a “serious decline”.

He said there was likely to be a big shortage of breeding ewes and wool in coming years, which would produce a “big spike in values”, but he urged producers to take a “medium term view, rather than a short-term view on sheep.|

“They will be profitable soon, but in the meantime we are dealing with this terrible drought.

“Wool prices really need to be back to pre Covid levels, and while it is good to chase early maturing Merinos that grow, theystill need to have a good wool cut to be profitable.”