Lamb slaughter has opened the year stronger than it finished, while mutton has started weaker. Markets are being disrupted by heatwaves and a public holiday, making it difficult to get a read on exactly where supply and demand sit.
January used to bring peaks in lamb slaughter. We think it had a bit to do with the Australia Day Lamb advertising campaign. The ads are still there, but now slaughter tends to build through summer and into autumn.
This January we did see east coast lamb slaughter spike above 400,000 head for the first time since early June. Figure 1 shows that in the second week slaughter fell back to levels similar to where it finished 2025.
Figure 2 shows that it looks like it was a straight swap for mutton, with sheep slaughter spiking in the second week after starting slower than it finished 2025.
For the second half of 2025, and the first two weeks of 2026, total lamb slaughter was 12% lower than the same period in 2024 to 25. This is a significant drop in slaughter, but we need to remember that 2024 was a strong year, and lamb slaughter has been just 3% below the five year average since the start of July.
As always, it is hard to tell if lambs are late, or if they were simply not born in the first place. The reality is probably a bit of both. The push to market lambs at heavier weights, and the rise of lotfeeding, has seen autumn replace spring as the peak slaughter period, and this year is likely to be similar.
Mutton slaughter is less reliable, tending to bounce around in response to seasonal factors. Despite the strong lamb prices, and the incentive to rebuild flocks, sheep supply has remained near the five year average, Figure 2. No doubt mutton values at levels we used to consider good for lambs has producers opting to quit some less productive sheep rather than carry them through summer.
Prices have held relatively steady since opening the year. Lamb prices are still very good, and store lamb prices suggest many expect them to stay strong. Figure 3 shows how good prices are compared to historical levels, but it will take a strong lift in supply to see them ease markedly.
What does it mean?
This week will be interesting, with saleyards not the place to be during a heatwave, supply should be tighter. This may impact markets on the positive side, but buyers may be cautious on lambs in hot weather. It would not be surprising to see a bit of an influx of stock when it cools down again.
Key Points
- East coast lamb slaughter moved above 400,000 head early in January for the first time since June.
- Sheep slaughter started the year weaker but lifted in mid-January.
- Lamb supply should remain around current levels, and prices may come under short term pressure.
Click on figure to expand
Click on figure to expand
Data sources: Mecardo, ABS, MLA
