MLA tips flock will decline in 2024 amid record lamb production

MLA this week released the projections, tipping that lamb slaughter would break last year's record to hit 26.1 million, while the flock would ease following three years of consecutive growth.

Producer focus on productivity and genetics during the rebuild phase from 2020 to 2022 led to high marking rates, but the change in weather conditions in 2023 saw sheep slaughter rise by 46.7pc as producers offloaded unproductive breeding stock.

MLA market information manager Stephen Bignell said sheep turnoff would mostly be limited to older, unproductive ewes, meaning this year's lamb cohort was expected to remain solid bu slightly smaller than in previous years.

"The current resilience of the sheep flock means that high lamb slaughter will have a less intense impact on the national flock size than in previous maintenance periods, meaning that there will be a decrease in overall flock numbers, but not as dramatic as in comparative years," he said.

"After 2024, the flock is expected to stabilise and remain above the ten-year average."

Australia produced the most lamb on record in the calendar year 2023, with 599,461 tonnes of lamb being produced, but the record is expected to be surpassed in 2024 with projected production of 621,000 tonnes, a 9pc increase.

If this figure is reached, production will be 21.3pc or 109,359 tonnes above the 10-year average.

Mr Bignell said Australia's position as the largest exporter of sheepmeat meant that high production would increase globally traded sheepmeat volumes.

"Economic resilience in the United States and emerging markets will drive demand for lamb, while the outlook for consumer demand in China remains uncertain," he said.

"Regardless, a shortage of competitor proteins will encourage imports of sheepmeat in high protein consumption markets."

The lamb production forecast is then set to ease to 587,000 tonnes in 2025, before rising in 2026 by 19,000 tonnes to 606,000 tonnes due to improved carcase weights.

Mutton production will be the largest since 2006, with a predicted 254,000 tonnes in 2024 up by 3.14pc on 2023 volumes.

MLA tips that in 2025, fewer breeding ewes will be turned off with forecasts of 229,000 and 207,000 tonnes respectively for 2025 and 2026, as the industry moves towards a transitional period, entering an average season.

Meanwhile Episode 3 market analyst Matt Dalgleish said the sheep turnoff ratio reached 13.1 per cent at the end of 2023, up from 12.6pc the previous quarter, with a 14pc of STR the pivot point between flock rebuild and flock liquidation.

Mr Dalgleish said when prices hit their low point in September he expected that some producers decided to wait until the market recovered more before selling.

"Obviously we had a wetter than expected summer, at least in the south-east, and that sort of allowed some people to hold a bit longer... that slowed the pace down of moving into liquidation," he said.

"It's still going in that direction, it just hasn't been as quick a movement to liquidation as what was originally going to be the case.

"Watching the sheep turnoff ratio rise through last year, it was rebounding pretty strongly from that 9pc that it had been at for a couple of years when we had the really strong rebuilds."

Mr Dalgleish said he expected that the industry would surpass the 14pc mark this year, but only slightly.

"It might not be a very strong move into liquidation but the trend still seems pretty entrenched to me that we are continuing to slaughter more," he said.

"Obviously it's not just slaughter, there's numbers being turned off into live trade as well... a country like Saudi Arabia coming back online, if that gives the live trade a bit more of spurt in terms of volumes and gives the West Australian farmers a bit more of an outlet with good pricing, then that could be enough."