Domestic price of sheep meat

IBISWorld forecasts the domestic price of sheep meat to swell 9.4% during 2025-26 to $173.2 per head. A range of factors influences the domestic price of sheep meat. As sheep are primarily used for their meat or as a source of wool, the domestic price of wool can significantly affect sheep meat prices. For example, a substantial rise in the price of wool, influenced by local and overseas factors, encourages sheep farmers to maintain sheep for their wool rather than send them to an abattoir, reducing sheep meat production volumes. This, in turn, typically boosts sheep meat prices. Conversely, lowering the domestic price of wool encourages sheep meat production, often decreasing lamb and mutton prices. IBISWorld forecasts that the domestic price of wool will appreciate slightly in 2025-26. While demand from China, which accounts for around 40.0% of New Zealand's wool export, may slump as tariffs hit the countries clothing manufacturing activity, production in India is posed to ramp up as the country aims to double the size of their local textile by 2030, providing New Zealand wool exporters an alternative market. This boost in demand will incentivise wool production over meat production for some farmers, in turn reducing the supply of sheep for slaughter.

Lambs made up 84.8% of the total sheep slaughter in New Zealand for the 2024 calendar year (latest available data). This figure is in line with long-term trends for the country, indicating the importance of lamb in the sheep meat industry. Over the past 20 years, export volume (in tonnes) of both total sheep and lambs has grown by 7.9% and 3.3% respectively. However, over this same time period, the total numbers of sheep and lambs in New Zealand have dropped by 39.9% and 34.2% respectively. Over the five years through the end of the 2024 calendar year, export volumes have fallen 2.7% 0.6%, theoretically boosting local supply and applying downwards pressure on prices. However, this dip has coincided with a 12.1% and 12.0% in total sheep and lamb numbers, respectively, resulting in a significant and sharp hike in the domestic price of sheep meat.

The New Zealand Government estimates that the average export price of mutton and lamb will swell over the 12 months through June 2025, in turn applying upwards pressure on the domestic price of sheep meat, as the two prices are tightly correlated.

IBISWorld forecasts the domestic price of sheep meat to rise at an annualised 5.6% over the five years through 2025-26. Prices surged in 2021-22 as the average export price per kilogram of both lamb and mutton hiked, the former by 26.7%. While demand from China has faltered compared to previous years, the US, UK, EU and Canada have shown strong demand for red meat, supporting the export price of sheep meat and pushing up the domestic price.