Business and Policy September 2026 – Sheep

Pressure on industry increases supply into August  

August has seen a slightly more unsteady prime sheep market with prices continuing to decline through the month. Although prices have shown a sharp decline, this is largely in line with typical season trends, with last year’s trade reaching a base in mid-September before seeing some recovery as supply tightens again towards of the end of the year. Other industry pressures have also contributed to the reduction in prices, with a good supply of lambs coming onto the market following drought, and disease pressure on the industry forcing many to reduce grazing pressure.  

Following a turbulent start to August with a 57.3p/kg drop in deadweight price during the first week (£12 per head for a 21kg carcass), we have seen a steady decline over the last couple of weeks leaving prices 709.6p/kg (w/e 22nd Aug 2026) for a R3L carcass; this is 27.2p/kg below this time last year, but remains around 100p/kg above the 5-year average. Part of this market pressure is due to an increase of leaner lambs coming on to the market after drought put a strain on grass growth and with bluetongue also impacting large areas of southern England.  Bluetongue has worked its way up the country, forcing producers to market prime stock earlier in order to ease pressure on the breeding flock before tupping. Well fleshed finished lambs are still demanding a premium where available. The live ring is seeing a similar pattern with prices at 312.75p/kg (w/e 22nd August), which is more in line with this time last year (just 5.70p/kg behind). Cull ewe prices have also eased during the month, as supply increases following weaning which is typical of the time of year (AHDB, 2026).  

The store trade is showing a much more positive outlook with prices averaging £105.18/hd (IAAS, 15th Aug 2026), trading around £26.30 below the current finished price and up on last year. Reports indicate a slightly tighter supply on the year in Scotland.  South of the border, numbers are up, with smaller, long-keep lambs reaching the highest premiums and buyer numbers increasing again following some much needed rain to help grass growth. However, the strong trade will potentially put some pressure on margins with many lambs looking at a longer finish following a dry summer, forage availability will ultimately be the key driver for demand and farmer’s ability to make a healthy margin. 

 

EU & Global Outlook 

The short-term outlook for EU agricultural markets was published by the European Commission in late July. In 2026, the EU flock is expected to continue to contract. Dropping by another 4.4% following disease pressure alongside prolonged drought across many EU countries.  

This drop is likely to support demand and prices for the time being, with EU imports expected to grow by 7% for 2026. This is a great opportunity for the UK market if supply can be sustained, with the UK already seeing exports into the EU increase by 10% in Q1 2026.   

This increased EU import demand is also being supported by an increase of lamb from New Zealand into the EU (+26%). The knock-on impact of this will be to the export trade from the EU, with trade expected to decline by around 3% for carcasses and 15% in live exports. 

The OECD outlook highlights a slowing down in growth of global meat consumption prompted by high prices and ageing populations in primarily high-income countries. Growth is down by 50% on what has been seen over the last 10 years.  Any growth is likely to be concentrated in middle income countries. On a positive note, the OECD outlook has highlighted a projected 10% increase in global slaughter weight, demonstrating good progress in breeding efficiency. The downside of this is a projected increase in greenhouse gas emissions from the meat sector of 6% globally.   

In summary, the outlook for the UK trade remains largely positive with EU demand strong on the back of flock restrictions which has helped to support prices. Tighter domestic supply will further support trade in the short term with the main competition to trade remaining from Australia and New Zealand.  

 

Retail demand update 

In retail, volume continues to decline while spend increases year-on-year, reflected by higher prices to the consumer. This has had a knock-on effect leading to a reduction in total spend for all lamb products. Given the warm, dry season, roasts have seen the largest decline in volume (-30.1%) with steaks, stewing and marinades being the preferred, and the only cuts to see any increase in demand. (AHDB, 2026). 

 

Lorna Shaw, lorna.shaw@sac.co.uk ; 07796 615719 

 

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
01-Aug-26	783.3	-28.1	-2.2	2.6	343.70	-31.3	9.2	2.3	130.15
08-Aug-26	726.0	-57.3	0.3	2.6	324.00	-19.7	5.5	-2.4	125.20
15-Aug-26	725.7	-0.3	0.3	-0.9	322.70	-1.3	0.3	0.1	125.15
22-Aug-26	711.4	-14.3	-1.6	2.4	313.00	-9.7	4.3	1.5	119.23

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