The latest insights and information on the Australian sheep market as of August 2026.
Processors and exporters manage tight sheepmeat supply
Processors are actively managing reduced sheepmeat supplies, with national lamb slaughter declining by 13 per cent so far during 2026, as flock numbers remain constrained. Slaughter appears to have bottomed during July as several plants shut for seasonal maintenance or operated on reduced shifts due to the tight availability of stock and high acquisition prices. Most processors are now back operating, except Bourke which resumes this Monday and will start to ramp up production as supplies increase through spring. Tamworth will close on 17 September and reopen on 12 October.
Labour availability within processing plants has improved compared with previous years, supporting processing capacity, although workforce challenges remain a structural issue for the sector.
Competition for suitable slaughter lambs has supported prices, particularly for well-finished trade and export lambs. Several processors have been willing to pay premiums for heavier lambs as export demand continues to favour larger carcases. The past month has seen a widening of spreads to favour export and heavy lambs, as supplies of new season store lamb supplies increased.
This chart shows the weekly lamb kill over the past 2 years and the 5-year average. Source: MLA.
Export market conditions for lighter lambs toughened with the ongoing regional conflict in the Middle East and resistance to higher lamb costs in price sensitive markets across Asia.
After firming considerably due to very strong restocker demand through late autumn and early winter (as mild conditions promoted abundant pasture growth), the spreads between light and restocker versus trade lambs have begun to ease. The prospect of increased supplies of new season store lambs in the coming months has reduced restocker urgency,with those wanting stock to graze winter fodder crops having already purchased.
Excellent seasonal conditions across many southern production regions are expected to increase lamb turn-off compared with last year, with strong lambing and marking rates compared to recent seasons.
Flock rebuilding and ewe retention will limit supply growth, and processors are therefore expected to maintain active forward contracting programs to secure throughput and reduce procurement risk. Forward contracts for late winter and early September are available in the range of $10.90 to $11.60/kg dressed weight with feedlots contracting store lambs for $6.80 to $7.20/kg liveweight.
Mutton kills have been even more depressed, falling 38 percent year to date, as an improvement in seasonal conditions across key areas is turning producers towards rebuilding with many reducing core breeding flocks the past few years the flock has a relatively young profile, limiting availability of CFA ewes.
This chart shows the weekly mutton kill over the past 2 years and the 5-year average. Source: MLA.
With reduced supply it has been tough going in export markets. For the year so far, total lamb exports are down 11 per cent with export market demand curtailed by high relative cost. Volumes to most markets outside Asia and the UK have fallen. The largest declines are in markets across the Middle East region (-31 per cent) and in price-sensitive markets such as PNG (-52 per cent). High prices have even checked demand in premium markets such as the US.
The story is much the same in mutton markets with falls in volumes across the board of 39 per cent. Only Japan and Canada have increased imports, with other markets down generally between 30 to 50 per cent.
The outlook is for increased new season lamb supplies with the much better season affording much improved lambing rates and higher weaning weights. This will see larger, heavier and earlier lamb supplies than in previous seasons. Expect store and processing lamb supplies to begin increasing in northern and western lamb regions in September.
Lower US production and higher domestic lamb values support local heavy lamb prices
US domestic lamb supply has been constrained with drought, high prices and the risk of disease encouraging US producers to turn lambs off early and at lighter weights. The sharp reduction in supply, coupled with high beef prices, has significantly boosted US lamb prices. The lamb cutout value rose 33 per cent in June, with strong gains across several products. Square-cut shoulders during the last week of June were 56.4 per cent higher than a year ago while the 8-rib rack was up 43 per cent.
US lamb slaughter weights (September to May) were the lowest in at least 15 years. That is consistent with producers marketing lambs earlier than in the past in response to strong price signals, with disease concerns potentially adding to the pressure in states like Texas.
Prices for Australian lamb in the US have surged higher in line with US domestic values, reflecting the shortfall in product in the US. For week ending June 1, the average price of frozen boneless Australian leg was $6/lb, 53 per cent higher than a year ago. Frozen square cut shoulders were 30 per cent higher, while frozen cap off racks were up 6 to 19 per cent higher, chilled square cut shoulder prices at $4.44/lb were 29 per cent higher and chilled boneless legs were up 9 per cent.
The strength of the US market has supported firm prices for heavy weight lamb categories at between $10.50 and $11.50/kg for most of the year. Expect prices for local heavy weight lambs to ease seasonally over the next few months back into the $9 to $10/kg range.
This chart shows the national saleyard indicator prices for heavy lambs in 24/25 vs 26/26 & 5year average. Source: MLA.
Supply tightness push trade lambs higher but consumer resistance will limit further gains
The availability of large supplies of trade weight lambs remains constrained with most lambs either grain assisted heavy weights or plainer and in need of finishing. The absence of large lines of lambs of weight suitable for supermarkets and the domestic butcher trade has supported prices through winter at a premium to heavy lines with prices at $11 to $12/kg dw for most of the year.
This chart shows the national saleyard indicator prices for trade lambs. Source: MLA.
Over the next few months, the availability of new season lambs at suitable weights will act to pull prices off their highs towards $9-10/kg dw.
Demand for light lamb eases with reduced restocker and feeder activity
Most restocker and feeder buying is either done, or waiting for increased supplies of new season store lambs, and price sensitive export markets for light weight, secondary quality lambs depressed. This caused demand for light weight lambs to take a step backwards since the start of July.
Through late autumn and the early part of winter, these categories benefitted from a step up in restocker buying as graziers sought lambs of any description to finish on winter pastures and fodder crops. The very mild winter, coupled with abundant soil moisture reserves meant that winter fodder production was at almost unprecedented levels right through most central and southern lamb producing areas.
Prices for light lambs will be mainly driven by the extent of restocker buying and the availability of new season lambs. Expect prices to continue to moderate over the next few months as new season lamb supplies increase.
This chart shows the national saleyard indicator prices for light lambs. Source: MLA.
Restocker activity eases with most buying done
Restocker lamb prices and demand dynamics will likely follow a very similar path to light lamb categories.
With crops in excellent condition across central and southern areas, restocker demand should remain firm with prices to be largely driven by store lamb availability, which will be guided by flock rebuilding appetite.
This chart shows the national saleyard indicator for restocker lambs. Source: MLA.
Successive seasons of below average returns may see graziers choose to turn off lambs early and at lighter weights to generate cash flow and improve equity positions, which may limit the extent of flock rebuilding in some areas.
Expect restocker lamb values to find a new, lower level over coming months and trade between $9 and $10/kg dw.
Will higher mutton prices encourage flock rebuilding?
Although mutton supplies remain tight, the sheep that have been offered have been increasing in weight with the improved seasonal conditions which has brought values back off their peak. The closure of several works through July has also reduced processor demand.
Improved seasonal conditions across key sheep regions and higher sheepmeat and wool prices will encourage rebuilding, with many reducing core breeding flocks the past few years. The flock has a relatively young profile which will limit availability of CFA ewes and mutton supplies.
This chart shows the national saleyard indicator prices for mutton. Source: MLA.
Sources: Price data reproduced courtesy of Meat & Livestock Australia Limited.
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