Meat and Livestock Australia’s latest Sheep Industry Projections forecast flock numbers to fall in consecutive years, driven by prolonged dry conditions across southern production regions and sustained high turn‑off of breeding stock.
While productivity gains and heavier carcase weights are helping to cushion impacts, reduced lamb and mutton availability is expected to shape production, prices and market conditions through the year ahead.
Australia’s national sheep flock is estimated to fall to 67.1 million head by June 30, 2026, representing a 2.7 per cent decline year-on-year.
Forecasts indicate that flock numbers will keep declining to 66.4 million in 2027 and 64.6 million in 2028, which would be the lowest on record.
MLA senior market information analyst Emiliano Diaz said this contraction reflected the impact of three consecutive years of difficult seasonal conditions.
“Producers have been managing through sustained seasonal pressure, and the high levels of turn-off over recent years have reduced flock size and constrained the potential for a rebuild if the seasonal outlook improves,” Mr Diaz said.
Sheep and lamb slaughter numbers are forecast to decline sharply in 2026 as tighter supply flows through the system.
Lamb slaughter is projected to fall 11 per cent to 21.86 million head, and mutton slaughter is expected to contract 30 per cent to 7.13 million head, as producers seek to retain breeding stock where conditions allow.
Despite lower slaughter volumes, rising productivity is supporting output.
Lamb production is forecast to decline 10 per cent to around 537,000 tonnes carcase weight, with higher average carcase weights partly offsetting reduced turn‑off.
Mutton production is expected to fall more sharply as supply tightens, reinforcing a broader transition to a lower‑supply phase for the industry in 2026.
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