Lamb sales lift spirits following a poor harvest
Poor lamb prices are the
result of too much
pessimistic talk. That is the
feeling at Tirinie, where the
hope is for a better autumn
than many predict.
Allan Wright reports
LAMB exports to Europe are the main reason for Ian Duncan Millars increasing confidence that current prices will mark the bottom of the market.
"Thousands and thousands of lambs that would normally have been flooding the store sales have already been taken out of the system by the export demand from countries like Spain and Portugal. Despite all the hype about the strength of sterling, we can still trade with these countries and I feel we may well have allowed prices to be talked down too far," he says.
Both store and export markets have been tried in the past couple of weeks or so with Blackface lambs from the Auchnafree hill farm which Mr Millar manages. "We had 200 away through the lamb group to the Euro market. They weighed 30kg and returned £16 net. We then sold the top draw in the store ring at Perth market and received £18.50 before deductions so there was little difference," he says.
"Many sellers are opting to have their light lambs slaughtered and there was a much lower entry than usual at the auction sale. But we will need that outlet in the future and I wanted to keep the Auchnafree name in front of buyers."
He sees no reason why the store market should be so depressed with many light lambs being slaughtered. Mr Millar, determined not to sell on a weak store market, reckons finished lambs can leave a working margin even at current prices. Lambs, said to be worth £5-£6 at the moment, can be kept on rented grass and finished there or from sheds for £5-£7 and sold for £16-£17 a head.
"The position on cast ewes is much more depressing and worrying," he says, quoting stories of one farmer offering 500 correct four-crop Blackface ewes free. Others from islands like Mull need £4 a head to cover haulage and marketing costs and have no hope achieving it.
"If there is a subsidised ewe disposal scheme and the export trade keeps removing light lambs, I can see the whole business brightening just a bit before winter," he says.
"It is not tenable to seek compensation for cast ewes, but if the government will pay for slaughtering and rendering, that will remove the poorest ewes and the trade will soak up the rest. Our aim on the hill is to identify cull ewes as quickly as possible and get them away."
On the other side of the ring, Mr Millar bought 40 replacement Mule ewe lambs at the top end of the Perth market for just under £31 apiece last week compared with £56 last year. "The lambs are stronger and will be able to go to the tup this year," he says.
He has also been busy with harvest, where his main task is baling the straw, leaving Gordon Barrack in charge of combining. "We have had good harvest weather and low moisture levels, down as low as 16%. Nitrogen levels are very low, around 1.46%, which is the best for many years. But the yields are just not there and we will struggle to do 2t/acre.
"That is below our five-year average because of the lack of sunshine in spring and early summer. We did not get the ear fill. I budgeted at 2t/acre and £90/t and will have to revise downwards," he says.
That is despite selling half the malting crop forward at £98/t, which now looks like good business. "The rest of the malting barley goes on a contract based on the September spot price, which is £80/t or less. Some pundits forecast £70. So I will struggle to get my £90/t overall."
To help trim costs, a late spray against rhynchosporium is now considered a waste of money. But the planned policy to cut nitrogen application, now down to 87.5kg/ha (70 units/acre), is paying off.
If grain returns do fail to match budget, they will be offset by beef margins. Prime bulls have averaged £594 or 188p/kg deadweight and £44 apiece ahead of budget. Lambs sold to the end of August averaged £31.30 a head compared with £39.33 last year, a drop of 20% but slightly ahead of the budget figure of £30. *