No location is ever mentioned in the movie.
In fact, the sequel Babe: Pig In The City has Babe travelling to a city called “Metropolis.”
In that movie, you can see structures that resemble the Golden Gate Bridge, Sears Tower, World Trade Center, Sydney Opera House and Christ
The Redeemer, among others.
So, it’s safe to say that there was no intended country or location for the movies.
movies.stackexchange.com/users/8071/Johnny Bones
From IMDB
The location of the film is never mentioned, though scenery and architecture suggest somewhere in Great Britain.
However, except for two announcers only heard for a few seconds on the TV, everyone speaks with American accents.
Moreover, cars were driven on the right side of the road, while in Great Britain [and Australia] cars are driven on the left.
Suffice it to say, it's deliberately left to the imagination as to the location.
movies.stackexchange.com/users/34317/Paulie_D
Based on some of the phrases used and minor pieces of evidence from the script, I would say the film is most likely to be set in Britain , probably northern England as in the source novel : National Grand Challenge Sheepdog Trials An event with this exact name doesn't seem to exist anywhere in the real world, but there are English National Sheepdog Trials , as well as Irish , Scottish , and Welsh National Sheepdog Trials.
National Sheepdog Association For some reason I couldn't find a website for this organisation, but searching for this phrase on Google and excluding results relating to this film seems to turn up only UK-based results.
I know I have to be at the National Conference.
I am the Assistant General Secretary of the Northeast Region after all.
I asked an American (the OP of this question, in fact) whether this sounds like the sort of title a person might have in the US, and got the answer
no.
Nor could it be Australian: the northeast region of Australia is pretty much unpopulated.
Coming today from the Kingsmith Showground in the heart of sheep country.
As far as I know, there is no "sheep country" in the US (again, I consulted some Americans, who confirmed my suspicion).
This term might be used in Australia (though it's not universally known there), and it's definitely a phrase one might hear in Britain.
(Incidentally "Kingsmith" is clearly a nod to Dick King-Smith, who wrote the source novel.)
movies.stackexchange.com/users/27759/Rand al'Thor
The other answers are all helpful, and it seems the consensus is that it could be many countries, and is (possibly deliberately) vague.
However it is useful to know that the original tale was apparently set in the UK, according to Wikipedia (yes, I know).
If anyone has read it and can confirm then that would be useful.
The Sheep-Pig, or Babe, the Gallant Pig in the U.S., is a children's novel by Dick King-Smith, first published by Gollancz in 1983 with illustrations by Mary Rayner.
Set in rural England, where King-Smith spent twenty years as a farmer, it features a lone pig on a sheep farm.
The original question referenced the film, and so this is arguably not an entirely valid answer... and yet the actual question was 'What is the in-universe setting of Babe?'
and it seems that this is the closest we will come to an answer.
movies.stackexchange.com/users/40509/James Carlyle-Clarke
I'm pretty sure that the farmer's wife is a member of the Country Women's Association, an Australian association.
I'm not sure if this was a mistake or not.
However, I believe the filmmakers wanted to make it deliberately vague.
To me it is overtly Australian.
movies.stackexchange.com/users/40494/Tim
The movie  Babe , featuring a pig that wants to be a sheepdog, was filmed in New South Wales, Australia.  However, my memory has failed me as to where it was supposed to be set in-universe.  The farmer appears to have some sort of Englishesque accent, the animals have varying accents, and I can't recall what the judges had.  What is the in-universe setting of  Babe ?
What country is the movie Babe set in, in-universe?
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<babe>
movies.stackexchange.com/questions/59785
movies.stackexchange.com/users/27640/user25296
The location of the film is never mentioned, though scenery and architecture suggest somewhere in Great Britain.  However, except for two announcers only heard for a few seconds on the TV, everyone speaks with  American  accents. Moreover, cars were driven on the right side of the road, while in Great Britain [and Australia] cars are driven on the left.  Suffice it to say, it's deliberately left to the imagination as to the location. However, based on some of the phrases used and minor pieces of evidence from the script, the film is most likely to be set in  Britain , probably northern England as in the  source novel :    National Grand Challenge Sheepdog Trials   An event with this  exact  name doesn't seem to exist anywhere in the real world, but there are  English National Sheepdog Trials , as well as  Irish ,  Scottish , and  Welsh  National Sheepdog Trials.    Scenery and architecture suggest somewhere in Great Britain.
Location of the film is never mentioned, though scenery and architecture suggest somewhere in Great Britain, except for two announcers only heard for a few seconds on the TV, everyone speaks with  American  accents. Cars were driven on the right side of the road, while in Britain [and Australia] cars are driving on the left. Based on some of the phrases used and minor pieces of evidence from the script, I would say the film most likely to be set in Britain.