Slaughter volumes across eastern Australia have dropped sharply through June into early July 2025, as the winter seasonal tightening sets in and processors scale back operations to manage cost pressures and rising livestock prices.
Weekly slaughter data from Meat & Livestock Australia shows that both lamb and sheep slaughter numbers in New South Wales and Victoria have eased considerably over the past two months, with the shift most pronounced in sheep processing in NSW.
Between early May and early July NSW sheep slaughter fell from over 79,000 head per week to just 36,050, representing a decline of 58%. Victorian sheep volumes also eased, but the fall was less dramatic, down 24% over the same period.
Lamb slaughter has also pulled back, but less severely. NSW lamb numbers fell from 137,168 head at the start of May to 97,515 by the first week of July, which is a 29% reduction. Victoria saw lamb volumes fall from nearly 250,000 head per week to just under 198,000, representing a 21% drop.
This trend reflects a confluence of tightening seasonal supply and calculated processor restraint. With cooler conditions limiting available stock and finished lambs increasingly scarce, many processors are choosing to reduce kill shifts or bring forward winter maintenance shutdowns to help stabilise input prices and avoid chasing limited supply at increasingly high costs.
This strategy is understandable given the steep price rises recorded across the major lamb categories. Over the past four weeks to mid-July, the Trade Lamb Indicator has surged by 109 c/kg, now sitting at 1,152 c/kg cwt, while Heavy Lambs are up 93 c/kg to 1,142 c/kg cwt. Even Merino and Light Lambs have posted gains of around 44 c/kg each, reflecting broader tightness in finished lamb availability. Mutton prices have also edged higher, up nearly 15 c/kg to 693 c/kg cwt.
The strongest gains have come in categories most directly tied to processor demand, particularly Heavy and Trade lambs suited for immediate kill. Lighter lambs, and especially restocker categories, have seen more subdued movement, suggesting reduced competition from backgrounders and a focus on optimising carcass yields by targeting better-finished stock.
For processors, the surge in lamb prices is eroding already tight operating margins, especially as energy, labour, and freight costs remain elevated. Rather than fuelling further price inflation by aggressively competing for stock, many have opted to pull back kill volumes.
This is evident in the dramatic NSW sheep kill collapse in the final two weeks of June, where weekly volumes halved from over 74,000 to below 35,000 head. Victorian sheep numbers have also tapered, though less abruptly, suggesting more consistent access to stock.
The lamb kill profile in both states tells a similar story of measured contraction. Weekly volumes through June have stabilised around 100,000 head in NSW and just under 200,000 in Victoria. These numbers are well down from early May, but not collapsing which is a sign that processors are still servicing key markets but are carefully managing throughput.
This disciplined approach may also reflect expectations that further tightness is ahead, and that overextending kills now could put upward pressure on prices later in winter or early spring. Export markets remain firm, especially from the US, Malaysia and the Middle East, but buyers are sensitive to price, and maintaining competitive supply remains a challenge.
June’s processing data highlights how winter has tightened sheep and lamb availability just as processor margins have come under pressure. The response has been to pull back activity, manage costs, and avoid stoking further price escalation. For producers, this means continued strong prices for well-finished stock, but fewer total opportunities to sell into as processors limit kill volumes and ride out the seasonal supply crunch.
Matt Dalgleish is a director of Episode3.net and co-host of the Agwatchers podcast.