Lamb prices could fall in 2023 as record supply predicted

Record lamb production in 2023 could see prices fall on shelves — if supermarkets pass on potential savings.

Meat and Livestock Australia (MLA) forecast Australia's national sheep flock to grow to 78.75 million head this year, the highest since 2007.

This is set to lead to record lamb production and exports, with Australia set to take advantage of New Zealand's declining flock size and snare a larger share of the world market.

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"Lamb slaughter is forecast to reach 22.6 million in 2023 as a result of large numbers of breeding ewes and strong marking rates. This is a rise of 595,000 head or 2.7 per cent year-on-year," MLA senior market information analyst Ripley Atkinson said.

He said this would "naturally" lead to an increase of supply to the domestic market.

"The domestic market is our largest market for lamb," he said.

"The outlook for improved availability of lamb on the domestic market due to improved production is a reasonable assumption based on the increased flock size this year."

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Carcass weights are also set to increase this year - meaning more meat per lamb.

However, benefits to Australian shoppers will come down only if supermarkets pass on any price fall due to the increased availability.

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It's difficult for the big chains to comment on potential future prices without it being seen as price signalling, but increased supply will typically affect demand and therefore prices.

The major supermarkets, Coles and Woolworths, have previously committed to lowering prices on different items where possible.

Aldi doesn't run official price-lowering campaigns but has built its reputation on lower prices.

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