Global AgriTrends Brett Stuart at Lambex

AUSTRALIAN sheep producers have been told the current run of high lamb and mutton prices could extend for up to three years despite global quota restrictions and tariffs, as beef and sheep meat supplies stay limited globally.

Global AgriTrends analyst Brett Stuart told LambEx delegates in Adelaide yesterday that stellar demand has taken lamb and beef prices to extreme levels, primarily in America.

He believed beef and sheep meat supplies would tighten further into 2027/28, supporting even higher prices.

Two years ago Mr Stuart predicted that lamb prices would be $10/kg by 2026 and modestly admitted he was wrong, with current values at $11-$11.50/kg.

“But I’ve learned as a predictor and forecaster if you’re wrong one way it is a lot better than being wrong the other way.

“Farmers are very forgiving when you forecast boldly and you miss it and it goes higher than you said.”

He and his partner Simon Quilty are currently putting together 10-year price forecasts.

Mr Stuart told LambEx delegates demand is the reason sheep meat that prices are higher than Global AgriTrends predicted.

“Supply fell pretty much in line, demand was the kicker.”

On the global Australian lamb export front, Mr Stuart said the nation’s EU sheep meat quota of 5800 tonnes is a major restriction, while in the United States lamb has been hit with the Trump tariffs.

“Where we sit today the only real tariff we have on agriculture coming into America in terms of meat and livestock is on Australian lamb.

“Beef got the exemption, lamb did not,” he said.

“Now there is a proposal, there is chatter, that somebody wants to reinvent the 15pc – I don’t think that’s going to happen.

“The reality is the US imports 73pc of our lamb consumption.”

Mr Stuart said tariffs would be even further inflationary on the US market. He said the US takes 16pc of Australia’s lamb and mutton exports.

US import lamb tariff bill ‘not going anywhere’

Mr Stuart said a congressional bill has been introduced in the US to increase the imported lamb tariff to 30pc, but 85pc of the US sheep flock has gone since the 1960s.

“Honestly, it’s pretty hard to find a lamb producer in America and how do they get the ear of the White House – I don’t know – it’s not a strong lobby is what I’m telling you.

Mr Stuart said the US bill is stuck in committee and hasn’t come out to the House or Senate.

“I really don’t think that’s going anywhere.

“I talked to some contacts in (Washington) DC, but for them it’s way on the backburners, but as of  now it is the 10pc tariff.”

Comparing the sheep meat quota available into the EU and the United Kingdom, Mr Stuart said the UK is more interesting to watch.

But he said the global meat protein market is a web of “it’s where you can negotiate and get access.”

“Right now if we look at total prices, this is a weighted average global lamb price, sheep are winning the race for sure.”

He said the sheep (mutton) and lamb markets are connected, though not one for one, far more than pork and poultry.

Mr Stuart said beef and lamb are headed for tighter supply globally into 2027-28 “and even beyond.”

“What I’m saying here is higher prices are still ahead.”

Mr Stuart said US production of lamb is down 8pc, year-to-date slightly lower. He US lamb rack prices were at US$17/lb (US$37/kg), or about A$56/kg. He said in the 1960s Americans are about 5lbs per capita (2.27kg). Americans now eat less than half a kilo of lamb today.

On mutton, he said Australian supplies were tightening and prices are continuing to move higher. Australia and New Zealand were both in a “slight liquidation” stage of flocks.

Mr Stuart said Australia represented about 60 percent of global sheep meat exports with China the biggest market, followed by the US and the UK.

He said China lamb exports were in decline, and the markets forecasted to grow this year were the US, Korea, Japan, the UK and Singapore.

“The first four of those are major beef markets – US, Korea, Japan the UK – those are big beef markets, and that’s where lamb is benefiting from the tight supply and very high prices of beef as well.”

China was Australia’s largest volume sheep meat market, but on price it is the US, which paid three times the price per kilogram that China has.

Of the U$79 billion retail meat sale market, Mr Stuart said US$45 billion is spent on beef — 57pc of the retail spend — but only one percent is spent on lamb.

“But look at the dollar growth, beef up 12pc, lamb up 7pc.”

Mr Stuart quoted the example of a wedding offering two meal options – salmon and lamb – to highlight the position of lamb as it rose with beef in the current “protein craze” in America. Gen Z is chasing protein and weight loss diets are designed around small amounts of high quality protein.

“Everyone is chasing protein … and honestly they are not chasing poor.”

Mr Stuart said US retail lamb prices are up 19pc from a year ago, and beef prices are up 7pc.”

“Lamb demand is very strong in America.

“Demand is strong and that is what is different this time.”

And Mr Stuart said the next cycle of lower prices – 2-4 years out – would be well above the previous lows “simply because demand is different this time.”

Mr Stuart said first time in decades the liquidation of beef herds has occurred simultaneously globally, which meant they would all rebuild at the same time.

“Lamb prices will benefit from these tightening world beef supplies.”

He said Global AgriTrends is forecasting a 15pc drop in global cattle slaughter over the next two years (to 2028).

“That is significant, that will be the lowest cattle slaughter in 20-25 years.

“What does that say about cattle and beef prices, they’re not going down, right, not any time soon,” he said.

“So that’s important to understand when we talk about the lamb markets as well.”

Mr Stuart said about 12 million sheep (mutton) were killed in Australia in 2024, with this predicted to be 8.381m in 2026 and 7.8m in 2027, with a slow recovery out to 2030.

“And of course the prices certainly higher against the tighter supplies.”

He said lamb slaughter is forecast to drop 26pc in 2027 from the 2024 level, with a very slow rebuild after that, with only 22 million lambs slaughtered in 2029.

“I’m not telling you there is never ever going to another bad day.

“By 2027, annual average price (for trade lamb) is now $12.25/kg,” he said.

“We see it fading a little bit after that, but again we don’t see prices dropping very quickly even out into 2029.”

Global AgriTrends believes the peak trade lamb price in 2027 will be $12.33/kg.