Australia's sheep flock was predicted to grow by 4.9 per cent to 74.4 million head this year, according to Meat and Livestock Australia's latest sheep industry projections.
If these numbers are reached, it will be the highest level since 2013.
As of the last official count finalised by the Australian Bureau of Statistics on June 30, 2020, the national flock was 63,529 million.
To give perspective to the sheep and wool industry, in 2021 data showed there are still almost 18,000 Australian farms growing sheep for meat and wool.
Australia is now the world's largest exporter of sheepmeat and remains the largest producer of wool.
But a recent plateauing in prices across both sheep and lambs has indicated less demand from restockers, signalling an easing in the race to rebuild of Australia's flock.
And with two years of the flock rebuild under the belt, numbers look like they are starting to build in the system.
Rabobank analyst Angus Gidley-Baird said there is less demand from those producers looking to restock this year, indicating the urgency in the rebuild has dissipated.
"Because of less demand from restockers, prices for older sheep and restocker lambs are lower than where they were last year," Mr Gidley-Baird.
"They are still favourable and still strong, indicating there is still a rebuild happening, but just not with that same urgency.
He said to look at prices throughout the year, prices for slaughter weight lambs generally lift between July and September as volumes decline.
"Volumes of lambs in quarter two and quarter three last year were the highest volumes of the year, which were very unusual - we usually see the winter months generally lower on supply," Mr Gidley-Baird said.
"Now it is a question of whether or not we are going to see prices lift with that shortage that occurs or whether we are going to see availability."
Mr Gidley-Baird said the price spread between mutton and restocker lambs is a good indicator of where the flock rebuild is up to.
"Mutton prices, restocker lamb and Merino lambs are all below where they were last year and the year before," Mr Gidley-Baird said.
"They are down about 6 to 8pc on last year compared to our slaughter weight and trade lambs, which are much closer to where they were last year and much closer to the five-year average.
"That indicates to me that some of those ewes, the restocking Merino lambs, are going back into the flock.
"I expect we now have two years of flock rebuild under the belt and we are starting to see these numbers build in the system."
According to the latest ANZ insights, while restocker demand has declined, the sheep sector has also felt an impact from some of the side-effects of COVID-19 and associated lockdowns.
"Processing shutdowns, lack of labour and lower than usual yardings have left more heavy lambs in the paddocks over winter," associate director agribusiness research Madeleine Swan said.
I expect we now have two years of flock rebuild under the belt and we are starting to see these numbers build in the system.- Angus Gidley-Baird, Rabobank
"Despite this, saleyard prices remain on par with previous years - and some optimistic signs are on the horizon for the industry emerging from winter."
While total yardings and slaughter numbers are rebounding well, they are still down on previous years.
Ms Swan said this is even despite the obvious intent of producers to rebuild their flocks by holding back ewe lambs which will see national flock numbers jump to almost 75 million head by the end of the year.
Sign up for our newsletter to stay up to date.