Sheep prices to remain high but below recent records

Australia’s sheep sector is entering a phase of adjustment after recent highs, although fundamentals remain stronger than in beef.

For 2026/27, ABARES projects that the total value of the sector (sheepmeat, wool and live exports) will decline by 3% year-on-year to US$ 9.4 billion.

Export value is also expected to fall by 2% to US$ 8.9 billion.

Prices are projected to ease moderately. Lamb prices are forecast to average 1,040 cents/kg carcass weight, down 5% from 1,095 cents/kg in the previous season. Sheep prices are expected to average 685 cents/kg, also 5% lower year-on-year.

Despite this decline, prices will remain historically high, still 18% above the 10-year average in real terms.

Production growth is expected to be moderate, driven mainly by heavier carcass weights, with relatively stable flock levels. Lamb slaughter is projected to fall 4% to 22.5 million head in 2026/27, due to lower production and increased retention of ewe lambs. Mutton slaughter is expected to drop 16% to 7.1 million head, as improved seasonal conditions encourage greater retention.

Strong global demand continues to underpin the market, both in traditional and emerging markets, limiting the extent of the price correction.