• MLA has revised its Australian sheep industry projections, which now predict the national flock will increase by 2% in 2022 to reach 76m head – its highest level since 2013.
• On the back of this flock growth, lamb slaughter has been revised higher from February projections by 2% to reach 22m head.
• Industry analysts are forecasting the National Trade Lamb Indicator to reach 785c/kg cwt by the end of 2022.

MLA’s latest sheep industry projections highlight a bright outlook for Australia’s sheepmeat industry. Above-average rainfall, along with the flow-on production effects and the continuation of historically high prices, is supporting producer confidence. Robust export demand in both established and emerging markets is another shining light.

Supply and production

In 2022, MLA is forecasting that the national flock will reach 76m head, its highest level in almost a decade. Continued above-average rainfall patterns have supported higher lambing percentages, driving this growth and a larger breeding ewe cohort.

This has driven increased production on-farm, meaning lamb slaughter has been revised higher by 2% compared to February to reach 22m head this year. With improved genetic and on-farm management, carcase weights will remain at historic highs and drive record lamb production this year to 549,000 tonnes – a revision upwards of 1% from the February release.

Mutton slaughter has been revised upwards by 2% on February projections to 6.12m head this year and is expected to rise next year by 24% to reach 7.58m. Production is forecast to remain firm on 2021 levels.

Exports

Already in 2022, Australian sheepmeat exports for lamb and mutton are higher by 5% and 7% respectively, compared to 2021. China remains Australia’s number one export market for sheepmeat, accounting for 35% of total volumes this year. The growth of emerging markets such as Papua New Guinea (growing 69% year-on-year), Malaysia (growing 34% year-on-year) and Singapore show the global diversity of Australia’s sheepmeat exports.

The US takes its place as Australia’s second largest exporting country, with lamb exports growing 13% in the year to May, compared to 2021. In value terms, the US lamb trade was worth A$414m between January and April, demonstrating both volume and value are a significant part of the US demand for Australian lamb.

MLA is forecasting lamb exports to reach record levels in 2022 at 308,000 tonnes. The historically high carcase weights and an uptick in slaughter volume flowing through to higher overall production are delivering this.

Mutton exports are expected to remain firm on 2021 levels before rising by 24% compared with 2020 levels next year.

Prices

Looking at the domestic lamb price forecast, five industry analysts (excluding MLA) are forecasting the National Trade Lamb Indicator will reach 785c/kg cwt by the end of 2022. This would signal a marginal lift on where the indicator currently operates at but a 7% or 61c decline from where the indicator finished in 2021 at 846c/kg cwt.