Business and Policy February 2026 – Sheep

The Present 

Although prime lamb prices entering 2026 remain historically strong; at time of writing (28/01/2026), they are around 50p/kg down on this time last year. While the June Defra Census reported a 1% reduction in breeding ewe numbers from 2024 to 2025; there was an increase in the number of ewes intended for first time lambing – an indication of a flock rebuild in the UK on the back of a high lamb price.  The 2025 lamb crop was the lowest since the start of the dataset in 1984.  Numbers slaughtered in January 2026 are down 16-18% compared to this time last year.  

Auction marts are doing great trade; large numbers of hoggs are being marketed and doing well across the lightweight, export and heavyweight groups.  

Ramadan, starting this year from the 17th of February through to the 29th of March is expected to keep trade strong, but the question remains as to whether we can expect a surplus in the lead up to Easter, which caused a price drop last year.  

 

Medium Term Outlook 

Improvements to slaughter lamb classification are underway, including standardisation of dressing specifications and weighing methods, which should improve transparency and price reporting accuracy. The introduction of a new “S” (Superior) grade which lies above the “E” (Excellent) grade in England and Wales may also help better reflect carcase quality. 

Retail demand has shown some resilience. Household purchasing data indicates that while total volumes remain under pressure, spend has held up better, particularly for primary cuts. This suggests lamb retains a loyal consumer base, even in challenging economic conditions, provided product specification and pricing are aligned with demand. 

Exports remain a critical support. The EU continues to be a strong and well-established market, with growth in both volume and value. Outside the EU, the Middle East and the North African region is now the second-largest export destination for UK lamb, though our short shelf life reduces our competition against New Zealand and Australia, who deliver ‘deep chill shipping’.  Expansion of the middle classes in emerging markets could rapidly change our export prospects in years to come; the ones to watch are Hong Kong, Ghana, and Kuwait.  

 

Long term: global supply and competition 

Global supply trends remain supportive but volatile.  In 2025, New Zealand produced a 2% increase in lamb numbers compared with 2024, but remains a low threat compared to historic years due to their long-term flock contraction. Australia, by contrast, is in a flock rebuilding phase, which is tightening supply in the short term, but is expected to increase production over time. 

Both countries are targeting growth markets in Asia and North America. The US remains a high-value market for lamb from Oceania, but demand is vulnerable to economic downturn; with growing unrest, is the USA likely to head towards a recession? This could turn the game on its head and result in more Australian lamb diverted our way, with Australian production remaining a long-term risk for our prices. 

 

Outlook 

In summary, lamb prices in early 2026 are strong by historical standards, even if they fall short of 2025 expectations. Tight domestic and EU supply, resilient export demand, and constrained global production provide a solid underlying market. However, global competition and events mean volatility remains a risk in the longer term.  

Poppy Frater, poppy.frater@sac.co.uk 

 

Week ending		GB deadweight (p/kg)				Scottish Auction (p/kg)				Ewes (£/hd)
		16.5 – 21.5kg								Scottish
		R3L	Change on week	Diff over R2	Diff over R3H	Med.	Change on week	Diff over stan.	Diff over heavy	All
03-Jan-26		721.2	9.7	-5.6	-10.6	330.50	-8.3	4.5	14.0	130.58
10-Jan-26		722.9	1.7	-2.5	-4.0	342.50	12.0	4.1	21.8	138.30
17-Jan-26		718.3	-4.6	0.7	2.2	321.80	-20.7	-1.6	20.6	133.52
24-Jan-26		692.8	-25.5	-2.1	3.7	313.80	8.0	1.5	25.5	125.53

Deadweight prices may be provisional. Auction price reporting week is slightly different to the deadweight week.
Source: AHDB and IAAS Market information

Standard weight 32.1 – 39.0kg; Medium weight 39.1 – 45.5kg; Heavy 45.6 – 52.0kg