13 June 1997

Exporters feel lamb price fall

NEW-SEASON lamb prices have tumbled further, with Mondays average of 111p/kg marking a 15p drop on the week.

The strong £ sterling – and its effect on exports – has been a factor. Expressions such as "hard work" and "an uphill struggle" feature prominently in exporters vocabularies at present.

John Bailey, livestock procurement manager with south-west abattoir Lloyd Maunder, says currency factors are taking their toll on the French and Belgium trade. At the same time, Irish product is very competitive.

Similarly, Spanish demand for very light lambs – which soon comes on stream – could be hit.

"This will affect, for example, the Welsh mountain breeds, which produce a superb little carcass between eight and 13kg deadweight," says Mr Bailey. "Farmers may well have to come to terms with lower returns."

Meanwhile UK retailers, switching from New Zealand to home-killed product, have also been keen to keep a lid on values, he adds. "But at this time of year, with supplies building up rapidly, lower prices might at least get some volume moving."

Auctioneer John Brereton at St Asaph, Clwyd, agrees it looks as if the very lightweight trade will be discounted.

"While farmers selling these lambs have little choice but to sell them on to a depressed market, some of those producing lowland and crossbred animals may be tempted to take them on to heavier weights.

"Grow them to, say 38 or 40kg, rather than selling them at 33 or 34kg," says Mr Brereton.

But in getting stock heavier, there is always the danger of it getting fatter, points out Alan Horine of Edward Hamer International.

Early sales at Kirkby Stephen mart in Cumbria, meanwhile, show lambs of 27kg lw -headed for Italy – have been making about £35, £5 down on last year.

And the 30kg lw ones – destined for the home market – at about £39, are also worth £5 less than 12 months ago.

Auctioneer Stuart Bell reckons that the strength of sterling could push the value of light lambs below 100p/kg later in the year.

Lower prices should, however, mean that the rate of sheep annual premium will rise, he adds.