Lamb
1 November, 2025
Flock declines as farmers prepare to rebuild
POOR seasonal conditions and elevated turn-off has seen the national sheep flock decline 6.2 per cent to 74.2 million head.
According to Meat and Livestock Australia (MLA), lamb production remains strong at 610,000 tonnes, supported by heavier carcase weights and grain feeding.
Australia’s sheep industry is navigating a challenging period according to MLA’s industry projections (September update).
The decline follows two years of below-average seasonal conditions across key producing regions, particularly in Victoria, South Australia and southern New South Wales which have driven elevated lamb slaughter and mutton turn-off.
Despite seasonal pressures, lamb slaughter is expected to reach 24.9 million head in 2025, a 5.8 per cent decline from last year’s record, while mutton slaughter is forecast to fall 15.4 per cent to 9.97 million head as producers being retaining breeding ewes.
According to MLA market information manager, Erin Lukey, while slaughter volumes are easing, production remains robust thanks to improved finishing systems.
“We are seeing producers respond to seasonal volatility by adopting supplementary feeding practices for heaving carcase weights and more strategic turn-off decisions,” Ms Lukey said.
“This approach helps offset the impact of reduced lamb supply and inconsistent pasture availability typically seen in areas experiencing below average seasonal conditions.”
Australia remains a dominant player in global sheep market exports.
The country accounts for 54 per cent of total global volumes in FY25.
While exports from New Zealand are forecast to decline due to structural changes in land use and flock size, Australia is well-positioned to maintain strong export volumes despite a temporary dip in production.
“Global supply is tightening and Australia is in a good position to meet demand,” Ms Lukey said.
“Our reputation for quality and consistency continues to underpin export growth, particularly in premium markets.”
In early 2025, export volumes were temporarily impacted by vessel availability issues but demand from the Middle East remains strong.
From January to August, exports tracked three per cent below the same period last year, with competition between processors and restockers helping to support market conditions.
Recent changes in the regulatory landscape have prompted some producers to reassess their business models and explore alternative market pathways.
Despite evolving conditions and structural changes, trade continues, reflecting the strength of underlying demand.
However, looking ahead, tighter flock numbers and a forecast 30 per cent decline in live export volumes by 2027 may challenge sourcing for the traditionally price-sensitive live export market.
As supply contracts, competition for suitable animals is expected to intensify, particularly in Western Australia where lie export plays a key role in production systems.
Assuming average seasons ahead, Australia’s sheep industry is expected to enter a period of gradual recovery.
According to MLA, the national flock is forecast to grown by 2.1 per cent in 2026 and a further 4.3 per cent by 2027, reaching 78.9 million head.
This rebuild will be driven primarily by natural increase, with producers focusing on ewe retention to strengthen the breeding base following two years of drought-induced destocking.
Lamb production is projected to rebound in 2027, reaching a record 651,000 tonnes, supported by both increased slaughter and heavier carcase weights.
Grain feeding and lot-finishing systems are expected to play a growing role in maintaining supply consistency and lifting yield per head.
On the global front, tight supply from New Zealand and steady international demand are expected to support export opportunities for Australian sheepmeat.
While domestic consumption may come under pressure from elevated prices, Australia’s position as a reliable, high-quality supplier remains strong.