Australian sheep flock estimates for the next three years are now more closely reflecting industry insights and assumptions after consecutive poor seasonal conditions in many sheep producing areas. Meat & Livestock Australia’s March Sheep Projections for 2026 are now out, and this year’s flock number has been revised about 8 million head lower since the previous predictions, released last September. This has in turn also brought down all other headline figures such as slaughter and production. MLA expects prices to hold relatively steady despite falling supply, with reports of processors having reached their upper limits.
The Australian Bureau of Statistics put revised (and outstanding) flock figures out late last year, which have been adopted by MLA and explain some of the significant changes since the previous sheep industry outlook. That said, it comes as no surprise at all that the forecast flock figure for 2026 is now 67.15 million head, a dip of nearly 3% year-on-year. Comparatively, this year’s number was forecast as 75.69 million in September of 2025, which would have been an increase of 2% from the previous year. Historical figures have also been altered, but most importantly so have the longer-term projections. MLA now forecasts the flock to fall another 1% next year and 3% the following year, putting it nearly 7% lower in 2028 compared to 2025 – putting it at the lowest level on record.
The flock decrease has been driven by seasonal (and price) induced high turn-off and has already started to significantly impact supply. Forecast lamb slaughter for 2026 is now 21.86 million head, the lowest number since 2021 and 11% lower year-on-year. It isn’t expected to follow the flock decrease longer term, however, lifting in both of the next two years to be only 5% below 2025 levels by 2028. Sheep slaughter is another story. It dropped more than 13% last year, and is expected to fall another 30% this year, and continue dipping in 2027.
Carcase weight increases on the back of the adoption of further lot feeding in the industry will offset some of the lower slaughter when it comes to actual sheep meat production and of course export volumes. By 2028, sheep and lamb carcase weights are forecast to be 5% and 3% higher than 2025 levels respectively. This still means mutton production will be down 29% this year. Lamb production is expected to be about 543,000 tonnes this year, a volume that has dropped from 607,000 tonnes predicted in September. Lamb production is now forecast to be about 2% lower than 2025 in 2028, compared to 3% higher, which was what the previous outlook predicted.
MLA reports processors are operating on a “negative margin” due to historically strong sheep prices and rising costs including interest rates. And sustained higher prices on the back of tightening supply could impact Australia’s export competitiveness. Their analyst aggregation forecast has heavy lambs averaging 1,118¢/kg cwt this year, restockers 1,103¢/kg, and trade lambs 1,145¢/kg cwt.
What does it mean?
As mentioned, the significantly lower sheep numbers come as no surprise after record high turn-off years and record low rainfall in areas. What the flock figure falling to an all-time low in 2028 after the industry has significantly increased capacity along the supply chain, especially at the processing end, will mean for the sector as a whole will be the thing to watch, and no doubt have wide-ranging impacts, especially as it coincides with the complete removal of Australia’s live sheep export industry.
Key Points
- The national flock is forecast to fall 3% year-on-year in 2026 and be at its lowest level on record by 2028.
- Slaughter and production figures have subsequently dropped for this year, while carcase weights are on the increase.
- Major price indicators expected to trend sideways despite significant supply stall.
Click on figure to expand
Click on figure to expand
Data sources: MLA, Mecardo
