Strong Global Demand Lifts Sheep and Beef Returns to Record Highs
New Zealand’s red meat sector is enjoying a standout season, with lamb, mutton, beef and even wool prices hitting record highs. Robust international demand and tight global supply are combining to deliver some of the strongest farmgate returns seen in years.
Beef Prices Surge on Global Tightness
Beef markets are running hot. In the United States, low inventories and slow herd rebuilding have pushed prices sharply higher. Even with Brazil facing a 50% tariff and New Zealand beef still carrying a 15% import tariff, returns to local farmers remain exceptional.
According to ANZ, “most of these price hikes are making it back to New Zealand farm gates.” China is also playing a key role, absorbing higher volumes of New Zealand beef as global trade flows adjust. Despite slower economic growth, Chinese demand for imported red meat remains firm — a clear signal of how well-established New Zealand beef has become in that market.
Beef + Lamb New Zealand’s 2025/26 outlook projects total beef production down just 1.4%, reflecting small shifts between cow and heifer classes rather than a drop in supply. The national beef breeding base continues to expand, supported by strong integration with the dairy sector. As more dairy-origin beef enters the pipeline and beef-breeding herds are retained, ANZ expects production to lift in the coming years.
Lamb and Mutton on a Stellar Run
Lamb prices have been steadily climbing through spring and are forecast to average around $9.65 per kilo, more than a dollar above last season. Tight supplies across both New Zealand and Australia are keeping prices strong in key markets such as Europe and China. While some seasonal easing is likely early in the new year, prices are expected to remain at historically elevated levels.
Mutton has followed a similar trend, with farmgate prices around $5.25 per kilo. Fewer adult sheep and stronger demand for both meat and wool are encouraging farmers to hold flocks rather than sell down. Confidence across the industry is high as producers look to rebuild numbers under favourable conditions.
Wool Finds Its Footing
After years of subdued returns, wool is once again turning heads. The strong-wool indicator has pushed past $4 a kilo clean for the first time since 2016, while merino prices have also strengthened on both sides of the Tasman. Limited global supply, renewed end-user demand and a long-awaited correction in stocks are all fuelling the rebound.
For many growers, seeing bales finally attract solid value again is a long-overdue morale boost. While volatility remains part of the landscape, the overall direction is clearly positive.
Renewed Confidence Across the Sector
After several challenging years of high costs, volatile markets and policy uncertainty, confidence is returning to the sheep and beef sector. Strong gross margins, lower interest rates, a weaker New Zealand dollar and supportive pasture conditions are underpinning profitability.
As ANZ notes, there’s “no shortage of reasons for optimism.”
The resilience and adaptability of New Zealand’s farmers continue to shine through. Despite weather events, shifting policy settings and global market shocks, the fundamentals of grass-based, low-input meat production remain rock solid. Our reputation for sustainability, quality and animal welfare continues to drive demand worldwide.
Outlook: Optimism With a Measured Eye
Looking ahead, supply constraints in key producing regions such as the US and Australia are expected to persist into 2026. With demand for premium protein holding firm across Asia and Europe, the outlook for the next 12 months is one of continued strength.
While farmers know high prices never last forever, for now, the combination of strong returns and easing finance costs offers some welcome breathing room — and well-earned reward after seasons of uncertainty.
The message is clear: when markets stabilise and farmers are free to focus on production, New Zealand agriculture delivers world-class results.