Lower sheepmeat production combined with strong export demand has tightened supplies across the EU in 2026, according to Agriculture and Horticulture Development Board (AHDB).

Production trends across key EU countries from January to June point to a modest contraction for the year-to-date, AHDB said.

The figure below compares 2025 and 2026 production volumes in thousand tonnes across selected EU countries.

Trainee analyst for AHDB, Hannah McLoughlin said: “Although France (3%) and Italy (7%) recorded small year-on-year increases, these gains were insufficient to offset declines in key producing countries, particularly Spain, Greece and Ireland.”

Spain, which is the highest producer of sheepmeat among the selected countries, saw a decrease of 5% (2,390t) to 50,130t year-on-year..

McLoughlin said that given Spain's dominant share of production, its reduction in output had the greatest influence on the overall trend, resulting in a slight weakening of production across the countries shown.

Prices

Looking at prices for sheepmeat, AHDB outlined that the EU reference price increased from around 820p/kg in January to almost 900p/kg in late spring, "reflecting tighter market conditions".

Prices then weakened during the summer, falling back towards 780p/kg.

McLoughlin said: “Great Britain (GB) prices showed the strongest seasonal volatility.

“This was followed by a sharp correction, with prices falling to around 710p/kg by September.”

McLoughlin added that the widespread decline from June onwards indicates "seasonal pressure” from increased market availability and softer demand.

She said: “The particularly steep fall in GB prices compared with the EU average suggests the UK market faced greater supply pressure during the summer, while Spain maintained a significant premium throughout the year, reflecting stronger domestic demand and tighter market conditions.”

Trade

In 2026, total EU exports of fresh and frozen sheepmeat increased 17% (2,800t) to 19,400t for from January to July

The figure below shows EU sheepmeat imports by origin from 2022 to 2026, indicating lower exports in 2023 and 2024 followed by an increase in 2025 and 2026.

McLoughlin explained that Algeria has continued to be the EU’s main export destination, with shipments increasing by 12% (1,000 tonnes) to 8,900t from June to July.

She added that this was "potentially due to population growth, greater demand linked to Eid celebrations, high production costs, and lower productivity within Algeria's sheep sector all increasing the country's reliance on imports".

Exports to the UK increased by 43% (1,400t) to 4,500t over the same period, which the AHDB analyst could perhaps be attributed to continued demand within the UK market and the need to supplement domestic supplies.

For the same period, EU imports of fresh/frozen sheepmeat decreased by 3% year-on-year (2,900t) to 96,500t.

According to McLoughlin, lower domestic demand across the EU could be the reason for this reduction in imports.

She added: “This decline was predominantly driven by a 6% (2.800t) decrease from the UK.

"Declines were also seen for Australia (-9%) and others (-14%)."

New Zealand remains the "top supplier" and saw a marginal increase of 1% (300t) to 45,800t.”

Market balance

The latest EU sheep market balance points to a tightening supply situation across the bloc.

McLoughlin said: “EU production fell by around 3,000t (-2%) year-on-year.

She added that producers continue to face elevated feed, energy and labour costs, while flock numbers have been under pressure in several member states due to poor profitability and an ageing farming population.

McLoughlin said: “Weather-related challenges and animal health concerns have also constrained production in some regions.

“Stronger international demand drew more EU sheepmeat onto export markets, further tightening domestic availability.

“As a result, despite a modest increase in imports, the volume of sheepmeat available for EU consumers declined slightly in the first half of 2026.”