An Overview of Australia’s Sheep Industry: 2024 Edition

Article Summary: In this 2024 update on Australia’s sheep industry, we explore the country's status as the world’s leading sheep exporter, responsible for 50% of the world’s sheep meat (2023 figure). With approximately 69 million sheep and 35 million breeding ewes, Australia is shifting its focus from wool production to premium meat offerings, particularly in response to rising global demand. While the industry faces challenges such as stagnant ewe productivity and increasing labour costs, technological innovations present significant opportunities for enhancing farm efficiency and profitability. Favourable trade agreements have further bolstered sheep meat exports, reaching an impressive AUD 3.45 billion, reinforcing Australia’s strong position in the global market. This summary highlights the current landscape and future potential of the Australian sheep industry.

Australia continues its dominance as the world’s largest sheep exporter, supplying 50% of the world's sheep meat in 2023. In 2022, Australia exported more than two-thirds of its sheep meat, which was worth around $4.6 billion. However, the sheep industry faces both challenges and exciting opportunities. In this article, we’ll discuss both.

Australia’s Sheep Industry in 2024-2025

Ewe Productivity

Ewe productivity, measured by the number of lambs reared per ewe joined, has remained relatively stagnant over the past few decades. This metric hinges on key factors like reproductive success, survival rates, and litter size.

Current Sheep Numbers

Australia’s sheep population has seen a dramatic shift over the past few decades. From a peak of 170 million sheep in 1990, the national flock now stands at around 69 million. This drop reflects major changes in demand, land use, and production focus. Among these, roughly 35 million are breeding ewes, with about 75% being Merino, the wool powerhouse that contributes a full 25% of the world’s wool supply.

However, the story doesn’t end there. For many farmers, today’s numbers present a different challenge. With the projected sheep population expected to dip by another 3% to 68.5 million in 2024–25, balancing stock numbers to fit demand and sustain profitability has become a priority. Part of this is due to lower turn-off rates of older sheep and fewer lambs reaching maturity as breeding stock, which means the flock isn’t always adjusting quickly enough to market shifts.

So, while we’re nowhere near the highs of the '90s, keeping today’s sheep numbers in check to meet demand is just as critical. It’s a balancing act that takes into account everything from weather to wool prices, with each year bringing a new challenge.

Wool vs. Meat

In the early 1990s, Australia experienced a significant 60% decline in wool production, marking a shift from being predominantly wool producers to a balanced focus on both meat and wool. Today, Australia is renowned for producing some of the world’s highest-quality wool, particularly Australian Merino wool.

Increased Production Values

The gross value of sheep meat and live sheep production is expected to rise by 18%, reaching $5.2 billion in 2024-25. This increase is attributed to higher lamb and sheep saleyard prices and a boost in production volumes. Improved demand from processors, influenced by robust global demand for sheep meat and elevated export prices, is anticipated to outstrip supply.

Export Growth

The value of sheep meat and live sheep exports is forecasted to increase to $5.7 billion in 2024-25, reflecting a 17% rise from an estimated $4.8 billion in 2023-24. Notable trends include:

  • Sheep meat exports: Expected to rise by 16% to $5.6 billion.

  • Live sheep exports: Forecasted to increase by 61% to $75 million.

But it’s worth noting that live export is due to change drastically. In case you missed it, the Australian Government announced in mid-2024 that live sheep exports by sea will end on 1 May 2028. The gradual phase-out, part of the Export Control Amendment (Ending Live Sheep Exports by Sea) Act 2024, officially kicked off on 10 July 2024. We’ll be covering more info on the topic, and you can find more info here or in our Beef & Sheep Pasture.io Blog Library.

Rising Prices

Average lamb saleyard prices are projected to surge by 24% in 2024-25, reaching 725 cents per kilogram (carcase weight), compared to 584 cents in 2023-24. For mutton, average saleyard prices are anticipated to rise by 38% to 319 cents per kilogram, up from 231 cents in 2023-24.

Key Opportunities on a Global Level

According to a recent report by Meat & Livestock Australia, global sheep meat consumption is projected to grow between 1.7% and 2.0% annually over the next few years. The highest growth rates are expected in Asia, the Middle East, and Africa, where consumers are increasingly shifting towards higher-quality meat options. Australia’s main competitor, New Zealand, is forecasted to maintain flat production levels, presenting Australia with the chance to capture a larger share of global markets.

Pros of the Australian Sheep Meat Industry

  • Australia produces the heaviest lambs globally.

  • Despite higher labour costs compared to countries like China, Australian sheep farms produce 5 to 10 times more meat per hour of labour than the global average.

  • Lower total costs for sheep meat production and additional income from wool and cropping enhance profitability.

Key Challenges

The price of sheep meat is relatively high compared to chicken and pork, making demand sensitive to economic shifts. Australia currently experiences lower weaning rates than other sheep-producing countries, and improvement in Merino flocks’ reproduction rates may require enhanced nutrition and genetic management.

Key Barriers and Solutions

  • High Capital Costs: The cost of infrastructure can be daunting. Farmers can explore leasing or sharing equipment to ease this financial burden.

  • Labour Availability: Seasonal labour demands, especially during critical periods like lambing and shearing, present challenges. Technology that streamlines operations can reduce labour needs.

  • Collaboration Potential: There is significant room for collaboration with New Zealand’s sheep industry, particularly during periods of low production in both countries.

The Australian Advantage

Over the last 30 years, lamb production in Australia has surged thanks to a strategic shift from wool to meat. Recent trends show that global returns for sheep enterprises are outperforming those for beef. The reality is that establishing a sheep farming operation requires considerable resources, making it challenging to compete with Australian and New Zealand prices.

Let’s Talk Trade

Asia and the Middle East are hungry for Australian sheep meat, with the value of exports reaching AUD 3.45 billion in 2022. This surge is largely due to favourable trade agreements and a robust animal health reputation, bolstered by Australia’s impressive disease-free status and superior animal traceability systems.

The Australian sheep meat industry is entering a promising phase

The sheep meat industry in Australia is moving into a promising but evolving phase. With the 2028 live export ban on the horizon, producers and exporters are facing a unique challenge. However, increased production values, export growth, and strong saleyard prices highlight a bright future.

For Australia to maintain its reputation as a leading global supplier of high-quality sheep meat, industry and government need to work together to provide support systems that boost profitability and align with the changing regulatory landscape. Australian sheep farmers deserve credit for their adaptability and resilience—kudos to those building the future of the industry! With a healthy ewe able to produce six or more lambs in two years, Australia is well-positioned to sustain profitability and remain a top sheep meat exporter despite shifting policies.

Find this helpful? Join the conversation below!

Until we meet again, Happy Farming!

Sources:

  • ABARES Agricultural Commodities Report (2024)

- The Dedicated Team of Pasture.io, 2024-10-15
Back to Blog