The weather may not feel particularly “good” for those in the south east of the country experiencing an arctic blast this week, but overall seasonal conditions have continued to be positive for sheep production so far in 2021. This has encouraged the national sheep numbers to rebuild faster than first predicted by Meat and Livestock Australia, with new projections released yesterday forecasting the 2021 flock to reach 68.1 million head.
This is an increase of 6.3% on 2020, and 700,000 more sheep in the flock than MLA predicted in their February forecast. The flock figure forecast for next year has also been revised higher, up a further 6.4% in 2022 (compared to forecast 6.2% in February) to 72.4 million head. Expected lamb marking rates of above 90% this year, alongside much lower sheep slaughter, are supporting the flock growth forecast.
Sheep and lamb slaughter and production forecasts for 2021 have all been revised lower since the February projections, another supporting factor for increased flock growth. 2021 lamb slaughter was forecast to rise 4% in the February outlook, while yesterday’s has it lifting 2%, with lamb production up 3% (compared to 5.5% forecast in February). Mutton slaughter – which fell a whopping 30% in 2020 – was predicted to lift marginally this year in the earlier projections, and now looks as though it will actually drop a further 6%.
Sheepmeat export volumes have been improving as the year goes on, and were up 20% month-on-month in May (more details in this week’s analysis here). Total exports are down 18% from 2020 for the year-to-April, but Covid-19 pandemic recovery has pushed the current Australian lamb export price to 13% above the five-year average. Forecast exports for 2021 are in line with slaughter and production, with lamb exports expected to finish the year 6% higher (than 2020) and mutton 12% lower. These forecasts have contracted since February, when MLA predicted lamb exports would lift 9%, and mutton would remain stable.
What does it mean?
While not likely to reach the records set in the previous two years, export demand and lower forecasted supply will mean prices are likely to keep on keeping on at historically strong levels for the remainder of the year. The lower slaughter forecasts show plenty of producer positivity and the growing flock might mean a return to slightly lower domestic returns in the medium-term, but it will encourage our growing export markets to keep Australian sheepmeat on the menu.
Key Points
- The national sheep and lamb flock has increased more rapidly than first predicted this year, up by 6.3 per cent on 2020.
- Lamb and mutton production for 2021 have fallen short of the February forecasts, however lamb is still expected to be higher year-on-year.
- Sheepmeat exports for the year-to-April are 18 per cent down on 2020, but lamb exports are still forecast to end the year 6 per cent up.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: ABS, MLA, Mecardo
