Sheep meat production

Sheep meat production is forecast to rise by 2.2% in 2024-25, to 935.9 kilotonnes, as turn-off rates for lambs and sheep are expected to increase during the year. The national sheep herd has recovered from the lows recorded in 2019-20, with improved rainfall conditions aiding restocking activity. This, along with the onset of drought in key sheep farming regions, has increased the number of lambs and sheep available for slaughter and is therefore expected to boost sheep meat production in the current year. Furthermore, strong demand in export markets like China and the Middle East is also supporting increased production.

Sheep meat production has followed a long-term upward trend over the past four decades, largely due to an expanding population and climbing demand overseas. However, the kilotonnes of meat yielded per kilogram of sheep and lamb has increased since 1985-86. This is indicative of increasing efficiency, with improving feed quality increasing individual lamb and sheep weights compared with the 1980s. This has increased the amount of meat that processors have been able to reap from each animal, boosting national production over the long-term.

In the domestic market, local consumers have increasingly shown a preference for lamb rather than mutton over the past two decades. As a result, lamb meat has accounted for an increasing share of total sheep meat production over this period. Lamb meat now accounts for over 65.0% of sheep meat produced, up from approximately 50.0% during the 1980s. Domestic consumption rose strongly over the two years through 2023-24, with prices moderating in the wake of increased supply. In contrast, prices of other meat, most notably poultry and seafood, have risen over this period. While rising prices for lamb is moderating demand in the current year, per capita consumption of sheep meat is expected to climb over the five years through 2024-25.

Exports of sheep meat are forecast to rise over the period. Export volumes fell over the two years through 2021-22, due to both supply and demand constraints. Turn-off rates fell as farmers looked to rebuild their flocks after drought. Global pandemic restrictions limited demand, as did political disputes between Australia and China, the largest market for sheep meat products. However, export volumes have skyrocketed in recent years of back of a recovery in supply and demand. The new UK-Australia Free Trade Agreement has eliminated the tariff and increased the quota on Australian sheep meat. Sheep meat exports to Middle East countries like the United Arab Emirates and Saudi Arabia have also grown strongly in recent years. Overall, national sheep meat production is forecast to increase at an annualised 6.3% over the five years through 2024-25.