Australia’s national sheep flock has experienced a significant decline, according to the latest Agri InFocus report from ANZ. The report points to record slaughter numbers, poor marking rates in eastern regions, and industry contraction in Western Australia as key factors behind the reduction. Elevated mutton and lamb prices have also contributed to producers selling more animals.
The report highlights that dry conditions during joining are expected to further reduce production into 2025-2026. This tightening of supply is likely to keep lamb prices at or near record highs due to limited availability for slaughter, fattening, and restocking.
Recent figures indicate that while lamb slaughter numbers have decreased slightly compared to last year, sheep slaughter numbers are nearly 20 percent higher than some forecasts predicted. Producers appear to be taking advantage of high mutton prices. ANZ estimates the national flock may have dropped to around 70 million head by the end of 2024–25, reaching its lowest point since the COVID-19 pandemic.
Despite expectations that lambing percentages will fall across major producing areas, tight supply is expected to support continued high prices. However, these may not reach recent peak levels.
Madeleine Swan, Associate Director of Agribusiness Research at ANZ, said several factors are influencing producer decisions: “This is a very significant decline in the national flock, especially considering that just two years ago we were talking the largest flock since the early 2000s,” Ms Swan said.
“The current market is being driven by a combination of reduced supply and renewed restocking interest. Many producers who reduced numbers are now looking to purchase lighter lambs. When you add solid export demand to the mix, it creates a strong price environment.
“Although lower lambing and marking rates may mean fewer lambs in the paddock and saleyards, producers are likely to offset this with strong returns.”
Ms Swan also noted challenges for consumers: “As saleyard prices rise, retail prices are likely to follow. Supermarkets have used lamb as a loss leader for some time, but it’s hard to see retail prices remaining stable as upstream costs increase.
"Continuing growth in lamb and mutton exports will be crucial to offset any softening in domestic demand. 2024–25 is shaping up to be a record year for sheep meat exports, even though lamb exports have eased slightly from their COVID-era highs,” Ms Swan concluded.
Further information can be found in ANZ’s Agri InFocus Commodity Insights report for Spring 2025.