AUSTRALIA’S sheep flock is predicted to increase by 5 percent to 67.3 million this year as producers retain ewes and ewe lambs, Meat & Livestock Australia has predicted.

MLA’s 2021 Sheep Industry Projections have said the national sheep flock is set to enter a significant rebuilding phase on the back of improved seasonal conditions in key sheep production regions of eastern Australia.

Following two years of decline that saw the national flock reach historically low levels last year, the flock is now projected to increase 5pc to reach 67.3 million head by 30 June 2021.

However, in contrast to the eastern states, Western Australia is in a de-stocking phase due to drier conditions throughout 2020, with limited available pasture and surface water. As a result, it is estimated that two million sheep were transported from Western Australia to eastern Australia last year, MLA said.

MLA market information manager, Stephen Bignell, said this year’s flock rebuild would not be as pronounced as previous La Niña-induced flock rebuilds in 2010 and 2016.

“Factors contributing to the slower predicted pace of the 2021 rebuild include starting from the lowest flock size in over 100 years, and the impact of the 2019 drought, which was the worst on record for some regions and prompted many producers to completely de-stock,” he said.

Mr Bignell said provided favourable seasonal conditions continue this year, strong sheep and lamb prices are expected to remain, with smaller yardings also expected to persist.

“Supply is expected to remain tight as producers retain their core breeding stock and ewe lambs, consistent with a significant flock rebuild.

“The rebuild will also see producers retain more older ewes than usual and many enter the market to purchase additional ewes,” Mr Bignell said.

“Lamb numbers are forecast to grow due to increased marking rates, with Merino marking rates expected to reach 92pc nationally.

“The improved nutrition of pregnant ewes, stemming from the abundance of quality pasture, will drive this forecast rise in marking rates,” he said.

“The bigger lamb crop predicted in 2021 will lead to a slight increase in lamb slaughter for the year, up 4pc to 20.8 million head, as producers intend to retain a greater percentage of ewe lambs.

“On the back of improved eastern conditions, national lamb carcase weights are expected to rise 2pc to average 24.4kg/head in 2021, up from 24kg in 2020,” Mr Bignell said.

“Continued growth in lamb carcase weights and the forecast rise in slaughter numbers underpin a 6pc increase in lamb production to 508,000 tonnes carcase weight (cwt) in 2021.

“Sheep slaughter is expected to rise slightly in 2021, up 2pc to 6.6 million head.”

COVID-19 has hit foodservice

Looking at the impacts of COVID-19 on Australian sheep meat, Mr Bignell said the greatest impact was the fall in foodservice demand, both domestically and globally, due to COVID-19 related restrictions.

“As consumers were forced to eat more in the home, retail sales of sheep meat rose, making up for much of the decline in foodservice demand,” Mr Bignell said.

“The global impact on demand varied greatly between markets, reflecting the length and strength of movement restrictions and the sheepmeat consumption patterns in individual countries.

“While the majority of Australian export destinations entered recessions in 2020, forecasts made by the International Monetary Fund (IMF) in October 2020 indicate that 2021 could be a year of recovery, with global GDP growth expected to bounce back by 5.2pc,” he said.

“However, consumers will certainly be impacted by ongoing repercussions from recessions, which could include tighter disposable incomes and reduced discretionary spending.

“MLA’s projections have been prepared on the basis that the world enters a COVID-19 recovery phase in 2021 due to the development and deployment of various vaccine programs.”

Lamb exports forecast to lift

“Australian lamb exports are forecast to lift in 2021, up 10pc to 290,000 tonnes shipped weight (swt), supported by a rise in both average carcase weight and slaughter levels.

“Mutton exports are forecast to remain steady in 2021 at 140,000 tonnes swt,” Mr Bignell said.

“Current forecasts indicate Australian live sheep exports may see a modest increase in 2021 on 2020 levels of around 2pc.”

Click here to read MLA’s Sheep Industry Projections 2021 or visit the Prices & Markets section of MLA’s website.