Lamb prices slide and slide again – FWi REVIEW OF 199

December, 1997

Compiled by FWi staff

Lamb prices started the year at their
highest levels for some time. But after March, they began a decline that
has yet to show signs of stopping. Farmers appeared to pay over the odds
for stores and then found little room for profit this autumn.

JANUARY

• Buoyant demand for
  sheep meat means record prices for cull ewes, which average £43
  (light) and £56 (heavy) nation-wide. Finished lambs sell at more
  than 150p/kg, according to Meat and Livestock Commission statistics.
  

• Exports boost old season lamb prices, despite Sterlings
  strength. In the last week of January, sheepmeat exports total
  2,450 t, 10% up on the same week in 1996. But unfavourable exchange
  rates lower the price of light lambs which drop by 12p/kg.

FEBRUARY

• Overall averages in
  first week of February in England and Wales are 142.89p/kg – up 1.71p/kg
  on the week and 10.49p/kg up on the year.

• Higher lamb prices and a 7% drop in sheep annual premiums will
  force hill farmers to intensify their operations, says Scottish
  Agricultural College economist, Stuart Ashworth. But increasing the
  volume of lamb could trigger lower prices and higher subsidies, setting
  of a cycle that benefits nobody, he warns.

MARCH

• Lamb prices begin
  their traditional pre-Easter rise but seem likely to level out well
  below the 1996 BSE-induced peak of over 190p/kg. The strength of
  Sterling makes it difficult for exporting abattoirs to profitably
  exploit firm markets in northern Europe.

• Best Easter lambs sell
  for well over 200p/kg, with a marked premium for lighter lambs in some
  areas. At Worcester, auctioneer Clive Roads says the handy-weights are
  making up to 20p/kg more than heavy lambs. Top price is 215p/kg.

APRIL

• New season lamb drops
  by 17p/kg to 145p/kg. Farmers and abattoirs blame retailers who, they
  say, are securing supplies from New Zealand. The slow take-up prompts
  farmers to delay selling stock, resulting in over-heavy animals, say
  auctioneers. But prices could steady if lamb quality improves.

MAY

• Sterlings strength continues to hamper lamb exports.
  Finished lamb prices are pegged-back well under last years record
  levels. Values at auction struggle to climb above 115p/kg, compared with
  138p/kg this time in 1996.

JUNE

• Lamb prices plunge as
  plentiful supplies come forward and hit a difficult market. Average
  values fall 14p in one week to 106p/kg. Marketings increase by 21% as
  farmers finish hay- and silage-making and re-focus on selling stock.
  

JULY

• Farmers bid hard for
  store lambs, forcing prices up. At many auctions, prices are higher than
  last year as many producers prepare to winter sheep rather than cattle.

AUGUST

• Store lambs values
  continue to hit record levels, prompting some to question whether buyers
  are pricing themselves out of a profit. Average store prices are well
  over £40/hd. But finished lambs are struggling to top 100p/kg.
  Buyers, it appears, are banking on price rises in the autumn and winter.
  

SEPTEMBER

• Despite a big
  flush of lambs hitting the market, prices remain steady. Increased
  exports have boosted returns, say auctioneers, with 50 lorries leaving
  Dover every week. The average value in England and Wales is just under
  114p/kg. But some analysts fear the market will become more volatile as
  the back-log of lambs is sold.

OCTOBER

• Estimates
  indicate slaughterings over the past three months are well down on 1996.
  This has been a difficult year and there may well be a lot of lambs to
  come, according to Jane Harrold of the Meadow Valley Livestock marketing
  group, Stratford-upon-Avon.

• The Meat & Livestock Commission also
  expects slaughter numbers to rocket between November and the end of the
  season. The number of lambs waiting to come onto the market appears to
  be “significantly up” on 1996 – possibly by as much as 17% for the time
  of year, the MLC reports.

NOVEMBER

• Lamb prices fall to
  less than 97.8p/kg, fuelled by fears of traffic chaos caused by the
  French lorry-drivers strike. The strike has come at the worst possible
  time of year, says Shrewsbury auctioneer Peter Willcock.

• More
  lambs will be held back in the face of the problems, Mr Willcock adds.
  But exactly how many will depend on farmers nerve and forage
  availability.

• Export of sheep carcasses to France so far in 1997
  are 15% down on the corresponding period last year.

DECEMBER

• Prices continue to
  suffer from the strength of Sterling and a high proportion of
  heavyweight lambs being sold through auctions.

• By 7 December,
  markets across England and Wales were averaging less than 93p/kg –
  leaving values about two-thirds of those seen a year ago and almost
  60p/kg down since the start of the year

• Producers blame the
  strength of Sterling which is now worth more than 10 francs and almost 3
  Deutschmarks.

• A relatively large carryover of hoggets into the
  new year will continue the pressure on prices, forecasts MLC economist
  Tony Fowler.