Strong Lamb Prices Continue Despite Drought and Economic Pressures

The U.S. lamb industry continues to demonstrate resilience in 2026, with strong live lamb and lamb meat prices supported by tight supplies and steady consumer demand. While sheep producers continue to face significant challenges from widespread drought, higher production costs, and broader economic uncertainty, the lamb market has remained remarkably strong through the first half of the year.

Federally inspected sheep and lamb slaughter through June declined nearly 3% compared to the same period in 2025, while lighter average dressed weights have reduced overall lamb production by an estimated 8%. Strong market prices and drought conditions have encouraged producers to market lighter-weight lambs, contributing to lower production volumes.

Despite reduced domestic supplies, consumer demand for lamb has remained steady. Lamb imports from Australia and New Zealand have increased modestly to help meet demand, while total lamb and mutton imports are approximately 9% higher than one year ago.

Market prices have reached some of the strongest levels seen in recent years. During the first half of 2026, feeder lamb prices averaged $380 per hundredweight—40% higher than the same period last year. Lightweight slaughter lamb prices increased 27%, while negotiated slaughter lamb prices climbed nearly 30% since the beginning of the year. The National Lamb Cutout Value also strengthened significantly, averaging more than $651 per hundredweight during the first six months of the year.

"Drought continues to challenge sheep producers across the country, but the resilience of our industry has been remarkable," said David Fisher, Chairman of the American Lamb Board. "Strong consumer demand and historically favorable market prices are providing important opportunities for producers. While we remain mindful of rising input costs and ongoing weather concerns, these market conditions reinforce the value consumers place on American lamb and the dedication of the producers who raise it."

Drought remains one of the industry's greatest concerns. Approximately 45% of the U.S. sheep inventory is currently located in drought-affected areas, with nearly 40% of U.S. pastures rated in poor to very poor condition. Reduced forage availability and higher feed costs continue to pressure producers across many sheep-producing regions.

Looking ahead, the Livestock Marketing Information Center (LMIC) forecasts strong live lamb and lamb meat prices through the remainder of 2026, supported by lower sheep numbers and constrained lamb production. However, inflation, higher input costs, and continued pressure on consumer spending remain important factors to watch. Even with these challenges, the outlook suggests the U.S. lamb industry is well positioned to benefit from continued consumer demand and historically strong market fundamentals.

* The quarterly report is produced by the American Sheep Industry Association and paid for by your Lamb Checkoff.