International markets for lamb and mutton are currently experiencing one of the most intense supply-and-demand situations in years. Prices are therefore expected to remain high internationally and locally until late 2025, primarily due to strong global demand and shrinking supply from major exporters, says Absa Agri.
By Alani Janeke, Senior Journalist at African Farming and Landbouweekblad
International mutton prices are being driven this year by a combination of lively global demand and major exporters experiencing a contraction in supply, especially in Australia and New Zealand.
“This global situation has created unprecedented market conditions, which have ripple effects for international trade networks,” says Absa Agri in its latest trends report, which was released at Nampo Cape 2025.
Also read: Market Pulse: Mixed signals and surprising price swings
Australia’s Supply Shortage
According to the report, unprecedented lamb and mutton prices have been achieved in Australia this year, driven by aggressive export demand, supply shortages caused by drought conditions and a sharp decline in the country’s number of breeding ewes. Although Australia’s national production remains near its historical highs – due to heavier carcasses and improved production – herd rebuilding is being limited by, among other things, drought conditions.
Australia’s market is preparing to capture a larger market share as New Zealand’s production declines. This is expected to be made possible by an improvement in seasonal conditions and early signs of their herd rebuilding.
New Zealand’s Industry Shrinks
Meanwhile, the contraction of New Zealand’s industry continues. Among the reasons is that more land is being used for forestry, wool prices remain low, and the industry increasingly competes with more profitable sectors, such as dairy farming. This structural decline limits long-term supply and reinforces upward price pressure.
“The structural decline limits (the country’s) long-term supply and reinforces upward price pressure, especially as demand from core markets such as China, America, the European Union (EU) and the Middle East continues to grow,” the report states.
The decline in New Zealand’s production is particularly significant, given the country’s traditional role as a major global supplier.
Also read: Dorper mutton sheep: Hardy, productive and easy to manage
SA Market Follows International Trends
Locally, lamb and mutton prices have followed global price increases. Factors contributing to this were the higher beef price in the country, as well as an increase in exports. “South Africa’s lamb and mutton exports have increased drastically, firmly linking the country to world markets and international price dynamics.”
However, a significant decoupling exists in the domestic market. While South African consumers experience some relief regarding cost pressure, mutton remains something that more affluent households, rather than low-income households, can afford.
Also read: Agricultural Outlook: The Good, the Bad, and the Ugly
Outlook Until 2027
According to the report, high international prices are likely to continue until 2027, primarily due to increased export volumes from major production regions compared to the same period in 2024. Furthermore, stock levels are not expected to grow significantly until at least 2027.
The expected higher mutton price and disruptions in local beef supply will likely provide medium-term support to lamb and mutton prices in South Africa.
“Growing export demand offers further room for price support, despite domestic affordability issues,” says Absa Agri. “Trends in the local mutton market will be influenced by both domestic production capacity, as well as the flow of international prices and trade.”
Read the full report.
