Australian lamb producers will continue to enjoy lucrative returns over the next five years due to strong saleyard competition keeping falls in lamb prices to a minimum.
Senior government agricultural economists also forecast that sheepmeat prices will only drop by one per cent to 715 cents per kilogram in 2019-20.
According to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Outlook 2019 saleyard lamb prices in 2018-19 are forecast to increase significantly as a result of strong export demand teamed with diminished production due to dry conditions across large areas of eastern Australia.
Farmers looking to restock is likely to ease from 2020-21, but strong demand from processors for export will keep sheepmeat at historically high levels.
Yet the five-year prediction for lamb prices, from 2019-20 to 2023-24, are expected to fall as production recovers.
This however, will all ride on the return of more favourable seasonal conditions across much of the eastern states.
Sheep prices are to remain relatively stable with a current financial year return of 430c/kg, rising to 440c/kg in 2019-2020.
The five-year forecast predicts minimal change at 447c/kg by 2023-24.
Growth in total meat production is expected to be constrained by flock and herd rebuilding in the next fiscal year with sheepmeat production expected to lower from 729,000 tonnes in 2018-19 to 648,000 for 2019-20.
Yet production is predicted to regather and by 2023-24 produce 745,000 tonne.
Slaughterings due to the declining flock are projected to also deteriorate in both lamb and sheep for the 2019-20 period.
But by 2020-21, lamb slaughter is predicted to increase to about 22 million head.
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In the medium term, the national flock is forecast to begin to recover as graziers prioritise flock rebuilding by reducing turn-off, but this will depend in climate conditions and pasture growth.
If the continuing drought endures and feed costs remain elevated, flock expansion will not achieve assumed levels.
But, with a run of good growing seasons, the result could see the national flock increasing to 74.2 million head by 2023-24.
This surge is expected from both meat and wool producers, due to expected ongoing high prices for sheepmeat and wool.
The value of Australian sheepmeat exports is estimated to decline by 20pc in 2019-20 and won't regather the same strength it has had in the past two years until 2023-34 when it is predicted at $2.4 billion.
Average farm cash incomes on the sheep industry farms are projected to increase from $131,600 per farm in 2017-18 to $142,000 per farm in 2018-19.