Global lamb production is likely to slow in the second half of 2013, lending support to international and domestic prices.
Smaller lamb crops and the rapid pace of slaughterings in the first half of the year would leave fewer animals left to process later in the year, said Paul Heyhoe, senior analyst at EBLEX. “It is logical that global prices are likely to strengthen on the back of this,” he said. “This is especially likely if the robust demand continues.”
With UK prices already strong, there may be some domestic price resistance, said Mr Heyhoe. “But the scope for significant uplift remains in the New Zealand and Australian markets, where farmgate prices are currently suppressed. Forward contracts in these two countries are already indicating prices will increase considerably as the year progresses.”
Such a rise in Oceania markets would support domestic values, he added. “As such it remains unlikely that the significant decline in UK values that was experienced in late 2012 will repeat itself.”
New season lamb prices were, however, following the seasonal trend, dropping by 18.3p/kg in the week to 1 June, to 513.3p/kg dw for an R3L grade.