Australia’s national sheep flock is expected to enter a rebuilding phase after three years of below-average rainfall and high levels of stock being sent to slaughter, according to an outlook from Meat & Livestock Australia (MLA) examined by AHDB.
The flock was estimated at 64 million head on 30 June 2026, lower than the estimate for 2025. The reduction followed difficult seasonal conditions across key sheep-producing regions, but rainfall has since improved and on-farm conditions have strengthened. Stronger markets have also improved producer sentiment.
MLA’s forecast assumes that seasonal conditions will return to average over the next two years. On that basis, the national flock is projected to rise by 2% to 66 million head in 2027, with a further increase expected in 2028. Even with that growth, the flock is expected to remain below its previous levels after the period of elevated offloading.
Lower slaughter as breeding stock is retained
The early stage of flock recovery is expected to reduce the number of sheep and lambs available for slaughter. Australian lamb slaughter is forecast to fall by 11% in 2026 to just under 22 million head. Slaughter is then expected to increase modestly in 2027 and 2028 as the flock begins to expand.
The change is more pronounced in mutton. Mutton slaughter is estimated to decline by 38% in 2026 to 6 million head, followed by a further 14% fall to 5 million head in 2027. MLA attributes the reductions to tightening supply and the retention of more core breeding stock by producers.
| Measure | 2026 outlook | Change or comparison |
|---|---|---|
| National sheep flock | 64 million head at 30 June | Down from the 2025 estimate |
| National sheep flock | 66 million head in 2027 | 2% increase forecast |
| Lamb slaughter | Just under 22 million head | Down 11% in 2026 |
| Mutton slaughter | 6 million head | Down 38% in 2026 |
| Lamb production | 600 thousand tonnes | Down 5% in 2026 |
Production remains historically high
Despite the forecast reduction, Australian lamb production is expected to reach 600 thousand tonnes in 2026, a fall of 5% after three years of exceptionally strong output. AHDB reports that this would still be the fourth-highest lamb production year on record.
Heavier carcase weights are supporting production even as slaughter numbers fall. The outlook nevertheless points to further reductions in both lamb and mutton production during 2027, before slight gains are anticipated in 2028.
- Improved rainfall has helped restore on-farm conditions in major producing regions.
- MLA expects the national flock to grow to 66 million head in 2027.
- Retaining breeding stock is forecast to reduce mutton slaughter by a further 14% in 2027.
The outlook marks a shift from the high-throughput period that reduced Australia’s breeding base. The forecast recovery depends on seasonal conditions returning to average, while the immediate effect is expected to be tighter availability of sheep and lambs for slaughter.
