Domestic price of sheep meat

The domestic price of sheep meat has risen significantly over the past five years and the volatility of the average price from year to year remains at a high level. IBISWorld expects that the domestic price of sheep meat will expand at a compound annual rate of 4.1% to reach 604.9p per kilogram in 2025-26. Supply factors have been the most important determinant of sheep meat prices over the past five years. The supply of sheep meat depends on the conditions in meat producing areas of the United Kingdom and around the world, including flock sizes and weather conditions.

The top three sheep meat producing countries in the world are China, Australia and New Zealand. The United Kingdom is the sixth largest producer, although the third largest consumer. The United Kingdom imports meat from these countries and exports sheep meat to about 70 markets globally. The majority of domestically produced sheep meat is eaten by UK consumers; therefore, demand at home is important in determining trends in price. Domestic consumption of sheep meat has fallen for over two decades, as lamb gained a reputation for being an expensive option.

Over 2016-17, tighter supplies of sheep meat from Australia and New Zealand limited sheep meat imports and, combined with lower domestic production, consequently caused the domestic price of sheep meat to increase. This was also supported by an increase in export demand on the back of the weakness of the pound. In 2018-19, prices continue on an upwards trajectory as lamb production in New Zealand and Australia tightened. The low value of the pound is expected to maintain favourable export conditions for UK exporters, further contributing towards a strengthening in price.

Over 2020-21, the domestic price of sheep meat trended downwards in the early part of the year due to falling demand. Customers opted for cheaper cuts of meat as household disposable income fell. The COVID-19 pandemic affected supply chains after lockdown measures were introduced to stem the spread of the virus. Customers stockpiled cheaper meats such as chicken and beef as lockdown measures were implemented in March 2020 which weighed on sheep meat prices. Prices fell sharply in April 2020, due to lower downstream demand as a result of subdued Easter celebrations and the closure of UK hospitality businesses. However, sheep meat prices increased significantly over the remainder of the year, reaching 628.5 p/kg in March 2021, which drove averaged prices for the year through 2020-21. In total, average prices rose 12.1% in 2020-21. Tight supply in the market and lower imports from Ireland has driven domestic prices. Continued supply chain disruption and rising energy costs in 2021-22 led to further increases in prices, causing a substantial expansion of 17.9% in 2021-22. Prices trended upwards for the first six months of 2022, with Defra's sheep meat deadweight prices reaching 659.2p per kg in June 2022, significantly higher than 593.2 pence per kg in January of the same year. UK prices expanded by 8.3% in 2024-25 as prices trend upwards. Lower UK production and sustained demand led to record deadweight sheep prices which continued into 2025 causing prices to reach 893p/kg in May 2024, driving import volume up.