NSW sheep and lamb numbers are expected to hit record lows this year, with the nation's flock to fall to its lowest levels in more than 80 years.
The forecasts were included in the Meat and Livestock Australia's (MLA) 2008 sheep industry projections mid-year report released this week.
The report predicts a fall in the national sheep flock by 6.5 per cent in the year to June 2008, to around 80 million head, making it the lowest Australian sheep flock since 1920.
MLA's chief market analyst Peter Weeks said NSW was one of the hardest states to be hit, with numbers down by 11 per cent to 28.6 million from 2006 to 2007.
However, NSW could also be reaching its core level of breeding stock.
"NSW is the state that has fallen the most because it's been the state that's borne the brunt of six drought years but we're also getting a mixed message," Mr Weeks said.