Lamb Prices Stay High on Tight Supply, but a Seasonal Reset Is Near

Why lamb supply is so tight

Australia is the world's largest sheepmeat exporter, and its supply has been squeezed all year. National lamb slaughter fell by 13 percent in the first half of 2026 as flock numbers stayed low. Slaughter appears to have hit its lowest point in July, when several plants closed for seasonal maintenance or ran on reduced shifts.

Mutton has been even tighter. Kills of older sheep dropped by around 38 percent so far this year. Many Australian farmers are holding onto their ewes to rebuild flocks after several dry seasons.

This limited supply has pushed prices up. But processors are being careful. Instead of paying ever higher prices, many are matching their shifts and slaughter numbers to what is available.

Strong prices, but buyers are pushing back

Competition for well-finished lambs has kept prices firm, especially for heavier export types. In Australia, heavy lambs traded at roughly 10.50 to 11.50 Australian dollars per kilogram (dressed weight) for most of the year. Forward contracts for late winter and early September were offered between 10.90 and 11.60 dollars per kilogram.

The rise in value is clear in the export figures. The average export unit price for Australian lamb in the first half of 2026 was 12.48 dollars per kilogram. That is:

14.4 percent higher than the same period in 2025
34.7 percent higher than the same period in 2024

Even so, high prices are starting to test buyers. Consumer resistance is now limiting further increases in both home and export markets.

The United States: drought lifts lamb values

The United States is facing its own supply squeeze. Drought, high costs, and disease risk have pushed American farmers to sell lambs earlier and at lighter weights. Slaughter weights between September and May were the lowest in at least 15 years.

The result has been a sharp jump in US lamb prices. The national lamb cutout value rose 33 percent in June. Some cuts climbed even more, with square-cut shoulders in late June around 56 percent above a year earlier.

Higher US prices have pulled Australian lamb up with them. For the week ending 1 June, the average price of frozen boneless Australian leg in the US was 6 dollars per pound, which is 53 percent higher than a year before.

Trade is shifting between regions

Even with firm demand, total Australian lamb exports fell about 11 percent so far this year. Tight supply and conflict in the Middle East held the numbers back. Some markets dropped sharply:

Middle East volumes down about 31 percent
Papua New Guinea down about 52 percent
Mutton exports down around 39 percent, with only Japan and Canada buying more

At the same time, the United States and China are taking a bigger share. Together they made up 46.6 percent of Australian lamb export volumes in the first six months of 2026, up from 40 percent a year earlier. US volumes rose 2.4 percent and Chinese volumes rose 4.9 percent.

China could become even more important. As its safeguard tariffs on beef from Australia and Brazil are triggered or come close, Australian lamb and mutton may benefit as Chinese buyers look for other proteins.

What buyers and sellers should watch next

Market watchers in Australia expect a seasonal reset in prices as spring and summer bring more animals to market. Supply usually starts to build from now, with larger numbers of new season lambs expected from late September.

One livestock columnist advises sellers who have forward deals in place to sign contracts quickly, warning that prices could move lower once bigger numbers arrive. The early signs are already there, with the first lamb price grids starting to ease.

For buyers, the message is that some relief may be coming, but slowly. For sellers, prices remain strong, even if the peak has now passed.