National flock: ‘The next month or two are critical’

Australia's national sheep flock has dropped to 74.2 million amid poor conditions, but industry experts are predicting a flock rebound in the next two years.

The lamb industry is facing growth in feedlot use and heavier carcass averages, experts say, while new projections show the effects of a dropping national flock.

Meat and Livestock Australia released its sheep industry projections on Wednesday, which showed a “significantly” affected sheep flock, dropping 6.2 per cent to 74.2 million.

But the report predicted a flock rebound in two years, with 2.1 per cent growth expected in 2026 and 4.3 per cent in 2027 to 78.9 million sheep.

MLA attributed the currently-reducing flock to poor seasonal conditions, while lamb slaughter was expected to drop to 24.9 million head, sheep slaughter to 9.97 million head, mutton production down to 265,000 and lamb production also falling to 610,000.

A new MLA outlook is attributing flock figures to dry weather, rising input costs, producer sentiment and the 2028 live sheep export phase out. Picture: Zoe Phillips

The report said supply outlook continued to evolve with several influences including dry weather, input costs, labour availability, producer sentiment, and a looming live export ban.

For wool, it said the eastern market indicator had risen to 1291c/kg in September, up 18 per cent from the same time last year.

Elders state wool manager Lachie Brown said the market outlook would be wholly dependent on the seasonal conditions.

“(The report) was more or less something in the realm of what most would’ve been predicting on the back of the seasonal conditions across large swathes of Australia and for up to two years in many areas,” he said.

“We are having a better year, but keeping in mind the next month or two are critical in a lot of areas and to be able to have a good spring and build up some supplementary feed stocks and be able to carry more numbers through will be vital.”

The MLA report also said the Australian Government’s 2028 live sheep export by sea ban prompted producers to reassess business models.

Australian sheepmeat exports made 54 per cent of the global total in the 2024-25 financial year, while New Zealand is expected to fall with lower slaughter numbers and a “historically small” sheep flock.

MLA market information manager Erin Lukey said Australia’s sheepmeat production had been “robust”, and there had been a rise in feedlot use.

“While we’re seeing this climate really influence the sheep flock, the turn-off capability of that flock has shifted so we’re able to get more meat produced from less,” she said.

The report said there had been strong live sheep export demand in the Middle East, but figures had fallen three per cent since last year.

It said alternative Middle East suppliers, including Romania and Spain, had reduced competitiveness with ongoing challenges with higher prices and biosecurity concerns, while the Horn of Africa had political instability, drought and changing import policies affecting trade.

Meanwhile, the report said the national restocker lamb indicator is forecast to fall 24 per cent to 873c/kg cwt by the end of this year, but national trade lamb would likely stabilise and drop by 14 per cent to 997c/kg cwt.

“With where they are currently, it looks dramatic but from what the analysts we go to have said it’s still higher than the past few years in most cases,” Ms Lukey said.