Recent export figures for both mutton and lamb show record volumes shipped in 2023, with December's monthly figures also setting records.
It comes as early 2024 saleyard prices continue to help build confidence.
The national mutton indicator has risen to 291c, a 64c rise in a week and 149c up from four weeks prior, while the heavy lamb indicator dropped by 17c in week to 765c but remains up by 102c from four weeks ago.
Data shows a record December for both Australian lamb and mutton exports, with 28,926 tonnes of lamb and 20,799 tonnes of mutton shipped out.
The mutton figure beat out the previous December record of 20,309 tonnes that was set in 2014, and was almost 5 per cent up on November volumes.
Compared to the five-year average for December the 2023 flows were 24pc higher and nearly 37pc above the 2022 volumes for the month.
In total 209,580 tonnes of mutton exported over the 2023 season, almost 13pc higher then the previous best year, which was seen in 2014 when 185,992 tonnes of mutton were exported.
In 2023 a total of 326,013 tonnes of lamb was imported, up by nearly 15pc from the previous record year in 2002.
December's flows were a 3pc easing on November volumes but still a monthly record and 27pc above the December five-year average.
Episode 3 market analyst Matt Dalgleish said the affordability of Australian sheepmeat throughout 2023 had driven the growth.
"If you look at the normal trend you get in a standard year, you tend to get that higher pricing that tends to come through seasonally through the winter period," he said.
"We didn't see that in 2023, we saw the price actually start to tank through winter... and it got to stages in late winter where it was actually exceptionally low compared to all the competitors.
"Normally in winter in terms of exports you see a bit of drying up of export flows but 2023 was quite an unusual year that we had, a lot of people were still turning animals off and as the price kept going down, they turned off more so if the processors could work through the volumes there was plenty of demand because it was nice and cheap.
"Markets like the Middle East that are very price sensitive, they really picked up."
Mr Dalgleish said even though prices are picking up at the saleyards, it shouldn't get in the way of further export growth in 2024.
"We're still nowhere near those super high levels we saw at the peaks of previous seasons... we've just kind of lifted off very competitive rates to being marginally competitive now," he said.
"When you look at the supply side of the situation globally there's really only us and New Zealand that supply the world with product and New Zealand are still at the stage where they have been reducing their sheep flock for the last two decades nearly."
China continued to be the top destination for Australian mutton exports, accounting for 46.5 per cent of the trade, up from 39.8pc in 2022.
Malaysia had the next biggest market share at 12.5pc, with the US coming in third to take 6.6pc, while Saudi Arabia took a 5.7pc market share.
For lamb, China took a 20.8pc market share,the country's second highest annual volumes on record, followed by USA's 20.5pc share.
During 2023, the UAE took 23, 674 tonnes, a 7.3 per cent market share, while Papua New Guinea took 22,340 tonnes, a 6.9pc market share and a new annual record.