Key points:
- Nation's sheep flock will reach its highest level since 2007 at 78.75 million head.
- Production and slaughter volumes are forecast to lift sharply.
- Changing global supply dynamics ensures that Australia will continue to strengthen its grasp as the world's largest sheepmeat exporter.
This year, Australia's sheep flock and its breeding ewe numbers reached their highest levels since 2007 at 78.75 million and 46.14 million head respectively, according to the latest Sheep Projections update from Meat & Livestock Australia (MLA).
It comes following three consecutive years of above-average rainfall in Australia's sheep regions, which has driven an exceptional recovery post-drought and translating into the growth of the flock.
MLA's Senior Market Information Analyst, Ripley Atkinson, says that the outcomes of this strong improvement in sheep numbers will deliver strong volumes of finished-weight stock to market.
"With improved genetics and on-farm management driving historically elevated carcase weights, we will see record lamb production and export volumes, as well as high mutton production," Mr Atkinson said.
"This will ensure that Australia can continue to meet its domestic and ever-increasing global demand for high quality sheepmeat."
Carcase weights in 2023 will remain 7% above the 10-year average. Lamb carcase weights are projected to ease to 24.7kg in 2023 and continue to decline to 24.2kg in 2025, while sheep carcase weights are expected to ease to 25.2kg in 2023, 3% higher than the 10-year average.
With carcase weights forecast to remain stable over the next three years, this will support high lamb and mutton production forecasts out to 2025. A move towards meat breeds and improvements in management and genetics are also behind the long-term trend of higher carcase weights.
Lamb production is expected to reach 540,000 tonnes in 2023, still beating 2022's record production of 534,500 tonnes.
Production will continue to increase in 2024 to 548,000 tonnes and then ease in 2025 to 537,000 tonnes after successive years of high mutton slaughter reducing lamb supply.
Mr Atkinson said that the supply of lambs entering the market will continue to flow through the system with another good lamb drop expected this season.
"This will allow for continued high slaughter numbers, flowing through to increased production in 2023 and 2024," he said.
Mutton production has been revised upwards on MLA's February projections to 197,000 tonnes in 2023. This follows strong weekly kill numbers in the first half of 2023 as processors prioritise mutton slaughter over lamb slaughter.
In a further expansion of price forecasts by six industry analysts, MLA has included a three-month price forecast to 30 September for both the National Trade Lamb Indicator and National Heavy Lamb Indicator in its latest Sheep projections.
Based on current prices, analysts are forecasting an improvement in prices for both indicators between now and the end of September.
- For the National Trade Lamb Indicator, analysts are forecasting the price to lift by 4.5% or 24¢ to reach 553¢/ kg carcase weight (cwt) by 30 September (based on the current price of 529¢).
- For the National Heavy Lamb Indicator, analysts are forecasting a price of 569¢ by 30 September. This would be an improvement of 7.4% or 39¢/kg cwt on its current price at 530¢.
Increased production and slaughter volumes within Australia, coupled with changing dynamics in key rival markets, will cement Australia's place as the number one exporter of the world's sheepmeat.
Lamb and mutton from Australia and New Zealand represented over 70% of internationally traded sheepmeat in 2022.
However, according to Mr Atkinson, while the Australian outlook is positive, exports from New Zealand are likely to decline in the medium-to long term.
"This is due to a number of factors, but key among them are the changes in land use patterns within New Zealand, which are having a detrimental impact on the New Zealand flock size and have subsequently affected production," Mr Atkinson said.
"Lower sheep production results in declining exports from New Zealand. This means Australia has a prime opportunity to further increase our grasp as the world's largest sheepmeat exporter.
"Strong volumes are expected to continue and interest in Australian lamb across domestic and international markets remain extremely solid.
"Ultimately the latest industry projections promote a positive outlook for the sheepmeat industry over the next few years."
View a full copy of MLA's July 2023 Sheep Industry Projections here.
To access radio grabs of Ripley Atkinson discussing the MLA sheep projections, click here.
