Tariffs and Trade in the Lamb Market

Tariffs and trade have been a big topic across the economy and agriculture. In the lamb industry, tariffs have been controversial, with producers on both sides questioning their necessity. The lamb industry is a smaller agricultural sector in the U.S. but one in which there has been some growth in the South, particularly since the introduction of hair sheep breeds.

Some Historical Context

Lamb imports have been a controversial topic for many years. Surging imports in the early 1990s led to investigations by the U.S. International Trade Commission (USITC) on unfair trading practices by Australia and New Zealand. Tariffs, as a remedy for rising imports, were not imposed and domestic production continued to decline. (As an aside, part of my PhD dissertation research, longer ago than I would like to admit, looked at the potential impact of a 10 percent tariff on imported lamb). By 2006, imports exceeded domestic production. In 2024, lamb and mutton imports amounted to about 70 percent of total supplies on the U.S. market.

Almost all, over 99 percent, of imported lamb and mutton comes from Australia and New Zealand. About 75 percent of imports are from Australia. New Zealand has made up a declining share of U.S. imports over time. In 2024, about 85 percent of the total product coming in was lamb and the rest mutton.

This Year

The lamb industry in the U.S. is evolving with the growth of non-traditional markets and some growth in demand. Increasing production in recent years is linked to grazing solar properties where the economic incentive for growth is on the grazing services side and not necessarily driven by meat demand.

Compared to record imports in 2024, monthly imports in 2025 have been mixed. Imports tend to peak in Spring as Easter and other holiday driven demand boosts prices. This year was no exception as imports peaked in April with Easter falling on April 21^st. A 10 percent tariff on goods from Australia and New Zealand began in early April. Imports declined in May and June compared to the historically high levels in 2024.

Can we attribute the decline in imports to the tariff? It’s probably not that easy. The lamb market makes a great illustration that other market factors may be more important than tariffs. Imports tend to decline seasonally after Easter. Relative prices in the trading countries are also important. Lamb prices have been rising in Australia and recently hit record highs for live lambs. Leg of lamb prices for comparable Australian and U.S products indicates that Australian prices have been rising relative to U.S. prices since 2024. Relatively more expensive Australian lamb would likely reduce some imports. The U.S. dollar has been weakening versus the Australian dollar over the last 4 months which should also lower imports. All of these things, along with the new tariff, are impacting lamb imports.

A lot of other questions remain about tariffs on lamb. Is this tariff high enough to help the domestic industry and what would be an effective tariff? How much would higher tariffs hurt consumption? If tariffs resulted in higher lamb prices for producers, would we respond by producing more lamb and causing prices to decline? The impact of tariffs will be interesting to watch approach next spring.