The United States’ lacklustre cattle and sheep numbers resulted in historically high red meat demand in 2025 and has continued into 2026. While America remains one of Australia’s largest sheep meat markets so far this year, barriers to the trade are appearing. The first was an increased tariff on Australian sheep meat headed to the US, set at 10% in late February. Adding to this is a rising Australian dollar, which is sitting at its highest level since March 2023.
Lamb exports for February fell slightly year-on-year, but it was still the highest volume month since last June. Total year-to-date lamb exports are sitting 16% above the five-year-average for the period. Lamb sent to the US was about 15% lower than February 2025, and year-to-date it was back 10% – but US intake for February remained 5% above the five-year-average. All other countries in the top five markets in terms of volume increased last month, from 5% for China to 37% for the UK. Those two destinations, along with South Korea, have also significantly increased their intake of Australian lamb for the year-to-date.
Produce from Australia had made up more than 70% of all US lamb imports for the year to mid-February, despite year-on-year volumes being lower. The US market share is at 25% for the year-to-date, which is on par with 2025. According to Steiner Consulting’s latest US Lamb Market Update for Meat & Livestock Australia released late last month, the shortfall of lamb in the US isn’t going anywhere. US consumers of lamb will rely on imports more than ever in 2026 and 2027 as their domestic sheep numbers fell below 5 million head for the first time ever this year, and replacement lamb numbers are falling faster than overall flock figures, leaving limited scope for future growth.
Prices for imported lamb in the US aren’t officially reported, but Steiner quotes them as “broadly up by double digits” year-on-year. However, they are also reporting more demand moving to lower-cost cuts in the face of rising prices. To put current costs into some perspective, the National Heavy Lamb Indicator closed last week at 1094¢/kg. Last time the Australian dollar was at its current level, that price was 744¢/kg – 32% lower. And that is without a tariff.
What does it mean?
The US is still hungry for Australian lamb, but at what price is another question. Despite a brief dip in recent weeks, the Australian dollar has returned to US$0.70. Team this with a 10% tariff, and Australia’s strong domestic prices due to supply, and we could have hit a ceiling for how much Americans can pay for lamb.
Key Points
- Australian lamb exports lower for year-to-date on the back of supply shortage but still well above average.
- US domestic lamb supply continues to decline, and it remains one of Australian sheep meat’s largest markets.
- New US tariff and rising Australian dollar countering strong demand in the US market.
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Data sources: Meat & Livestock Australia, DAFF, ABARES, Mecardo
