Business and Policy January 2026 – Sheep

 

Source: AHDB (Dec 2025)

Retail price increases alongside a reduced disposable income for many has seen both spend and volume decrease.  Spending on lamb steaks, burgers and grills continue to be favoured by many over roasting joints which saw the largest decline over 2025.

2025 also witnessed a bumper year for cull, store and breeding sheep with record breaking highs witnessed in several markets across the country.  All in all, although not without its challenges, 2025 was an extremely positive year for the sheep market to reflect upon.

Looking Forward to 2026

Globally

As we look forward into 2026, both the New Zealand and Australian flocks are expected to contract, tightening supply into the New Year.  Although Australia’s access to the UK market is growing with the free trade agreement and Australia hitting quota; tightened supply and growing demand from other export markets may limit further growth for the next while.

Exports from New Zealand have been below the 90% quota needed to access the free trade agreement meaning they are unlikely to access it for 2025.  Due to this, domestic supply coupled with consumer demand are likely to be key price drivers in early 2026 for the UK lamb market.

Closer to Home

The newly released livestock population data (DEFRA, 2025) showed a further reduction to the UK sheep and lamb flock with lamb numbers decreasing most.  Although still a decrease, the 2025 breeding flock has seen the lowest decline since 2021 with ewe numbers only reducing by 101,889 head since 2024; demonstrating an ease in the rate of decline in breeding stock as we head into 2026.

Towards the end of 2025, we have seen a healthy demand for well finished lambs at “export weight” between 40-45kg.  Lighter lambs (<40kg) are also in demand particularly for the European market as long as they are well fleshed (The Scottish Farmer, 2025).  It is predicted that heavy lambs (hoggs) into early 2026 will be unlikely to see a premium in terms of pence per kg.  So as an industry, a well graded carcass should be a priority over reaching a heavy weight to meet market demand into early 2026.

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
22-Nov-25	694.9	1.9	-5.6	-4.4	322.3	9.8	6.3	11.8	119.36
29-Nov-25	709.1	14.2	-6.1	-4	325.9	3.6	0.2	14.6	124.5
6-Dec-25	713.1	4	-2.7	-1.7	315.8	-10.1	-4.2	15.2	125.66
13-Dec-25	695.7	-17.4	-2.7	-2.6	315.3	-0.5	6.1	17.6	123.98

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

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

Note: From 11^th May, prices transition to new season lambs

Key Dates for 2026

Responsible for an estimated 30% of UK lamb sales (AHDB, 2024), the halal meat market remains a significant driver for lamb demand in the UK.  As Ramadan falls earlier this year; it will be a key driver for old season lamb that has been stored over winter - aiming for a late January – early February finish to be in time for the start of the Ramadan market.

Eid al Adha this year falls in late May which will suit the early new season lamb market alongside later finished old season lamb still available on the market.

• Ramadan: 17^th February – 18^th March
• Eid al Fitr: 19^th March - 20^th March
• Eid al Adha: 27^th May

 

Lorna Shaw; 07796 615719