AUSTRALIA’S sheep flock is forecast to reach 78.75 million this year, yielding record lamb production and exports.
Meat and Livestock Australia’s prediction in its latest Sheep Industry Projections update today puts the national flock at its highest level in 15 years in 2023, rising to 79.5m in 2024 before falling in 2025.
MLA has not made any price predictions in the update, stating that: “Price forecasts of the National Trade Lamb Indicator were not requested of industry analysts by MLA while it undertakes its indicator review.
“Impending changes are to be made as a result.
“The MLA Market Information team expects to request price forecasts for the July 2023 sheep projections.”
MLA said over the next 12 months, the continuation of Australia’s flock growth will translate into higher slaughter volumes across both lambs and mutton, resulting in solid increases in exports.
“With ample availability of grass and water, and a genetically superior flock to that of three years ago, supply of sheep and sheep meat will be strong throughout the year.
“Internationally, the demise of the New Zealand flock due to enterprise competition with dairy presents Australia a unique long-term opportunity to capitalise and increase its market position as the world’s largest exporter of sheep meat,” MLA said.
“In a global space, the opportunity for the Australian sheep meat industry to continue to capture market share, relative to its competitors, also offers long-term optimism.
“The Australian sheep industry has placed itself in an exceptionally exciting position for 2023 and beyond,” MLA said.
“On-farm conditions and confidence at the producer level are extremely strong, prices remain on-par with longer term averages and global demand for Australian sheep meat is as solid as it has ever been.”
MLA said driving the flock increase are optimal breeding conditions nationwide, a genetically superior flock, improved lambing percentages and medium-term industry confidence at the farm gate level.
Growth is forecast across all states, with larger improvements in flock numbers expected from South Australia, Western Australia, Queensland and Tasmania. The key sheep producing states of New South Wales and Victoria are also forecast to lift numbers, although not as significantly as other states.
In 2024 the national flock’s growth is projected to moderate and plateau, reaching 79.5 million head, a rise of 1pc, or 750,000 head year-on-year. While in 2025, the national flock is estimated to fall to 2023 levels, although it will remain above the 10-year average.
Lamb slaughter forecast to reach 22.6 million this year
MLA’s senior market information analyst, Ripley Atkinson, said lamb slaughter is forecast to reach 22.6m in 2023 as a result of large numbers of breeding ewes and strong marking rates. This is a rise of 595,000 head or 2.7pc year-on-year.
“2022’s slaughter performance showed that small stock processors had a greater ability to increase their throughput in line with higher supply, a trend MLA expects will continue in 2023.”
“Looking further ahead to 2024, we forecast it to be a record year for lamb slaughter, reaching 23.2m head,” he said.
“This would be a rise of 3pc, or 560,000 year-on-year and higher by 1.1m head or 5pc on the 10-year average.”
Carcase weights are also forecast to increase in 2023
In 2023, lamb carcase weights are forecast to remain high at 25.1kg, primarily due to structural genetic investment and productive improvement in the national flock over the past two years. This would be 11pc, or 2.5kg/head, above the 10-year average, despite weather forecasts suggesting drier conditions will occur in the second half of 2023, MLA said.
The Bureau of Meteorology (BOM) has forecast that the Indian Ocean Dipole (IOD) will enter a positive phase in 2023. A positive IOD results in less rain across southern Australia, where most of Australia’s sheep population is located.
Declining New Zealand flock is an opportunity
Although New Zealand is the second largest sheep meat exporter in the world, its declining flock represented an opportunity for Australia, according to Mr Atkinson.
“New Zealand, like Australia, has good market access, quality assurance schemes and a strong reputation internationally meaning that they are an international competitor to Australian lamb and mutton.
“However, new opportunities may be made available to Australian producers and exporters as New Zealand flock size decreases, wool and lamb production become less profitable compared to dairy production, and land availability decreases,” he said.
“In recent years, successive Australian Governments have made considerable strides in gaining European market access, with talks ongoing for an Australia (AU)-European Union (EU) Free Trade Agreement (FTA) and the AU-UK FTA signed in December 2021.
“As New Zealand sheep meat exports have increasingly shifted away from Europe, and towards China, improved opportunities for Australian sheep meat in European markets may continue,” Mr Atkinson said.
MLA said Australia’s sheep industry is in an exciting position of continued growth and development, with local production and the flock forecast set to rise, while global demand for high quality sheep meat in established and emerging markets continues.
The industry’s ability to continue to deliver high quality protein and be a world-leading producer will define 2023 as a positive and optimistic year, MLA said.
View a full copy of MLA’s 2023 Sheep Industry Projections here.
On Thursday 16 February at 11am AEDT, the MLA market information team will be conducting its annual live webinar, presenting on the forecasts for the Australian sheep flock and market in 2023. To register for the webinar click here.
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