USDA-NASS recently released the sheep inventory report, and as of January 1, 2026, all sheep and lambs were reported at 4.99 million head, the lowest on record. Compared to a year ago, sheep and lamb inventories fell less than one percent (-0.7%) to 35,000 head. Much of the decline in inventory levels occurred in western states such as CA (-1.0%), ID (-6.4%), OR (-1.4%), UT (-1.8%), MT (-1.6%), and WY (-5.1%), which correlates with areas that have been grappling with drought for several months. However, other states grappling with drought that reported increases were CO (+1.2%), KS (+2.5%), SD (+2.4%), and TX (+4.5%).
A notable decline was reported in the breeding flock, which fell 50,000 head (-1.4%) to just over 3.6 million head, the lowest on record. Market lambs posted an increase of +1.1% to just under 1.4 million head, the highest in three years. The lamb crop declined marginally (-0.3%) from last year by 10,000 head to 3.03 million head, which is on par with the prior two reported lamb crops. Overall, the report signals continued tight domestic lamb supplies.
