Australia’s sheep industry is in crisis, with prices near the lowest level in 16 years forcing some farmers in the country’s west to give their animals away for free to pet-food manufacturers.

Mutton prices have plunged 75% over the last 12 months, according to Tim Jackson, global supply analyst at Meat & Livestock Australia. Sheep prices have also slumped, with older animals fetching an average of just A$34 ($22) in October 2023 and some reports of animals selling for less than a dollar a head, he said.

El Niño is expected to bring drier and hotter conditions, increasing the number of animals sent for slaughter because of lack of pasture. Many abattoirs are now operating at capacity. The government’s plans to phase out live exports have deepened concerns about oversupply — particularly in Western Australia, which shipped almost all of the country’s live sheep in 2022.

“Some farmers are getting almost nothing,” said Andrew Spencer, chair of Sheep Producers Australia. Where the sheep are low quality, some farmers are being forced to give animals away for free to pet food producers, he said. “It’s been a very volatile time over the last couple of years.”

In the north of the Western Australia wheat belt, there have been reports of some farmers being forced to euthanize sheep, said Steve McGuire, vice president of WAFarmers. “In the ‘90s, we had to euthanize large numbers. That was soul-destroying, we don’t want to go back to that,” he said.

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This represents a dramatic decline in fortunes for sheep producers, who less than three years ago were enjoying record lamb and mutton prices. And the market is not expected to recover until next year, said Matt Dalgleish, co-founder of the agricultural consulting firm Episode 3.

Now, all eyes are focused on whether El Niño breaks over the summer, he said, adding a move back to normal rainfall would be a “huge boost to the market.”

The crisis in the industry has sparked a wave of dissent among producers, with the top farming body launching a campaign calling for the federal government to abandon plans to ban live sheep exports to the Middle East and for the establishment of a dedicated visa pathway for agricultural workers.

On November 6, one of the country’s two major supermarket chains, Woolworths Group, announced it would slash the price of 26 Australian lamb meat products by 20% following criticism that retail prices hadn’t dropped fast enough.