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SHEEP

16 November 2001

SHEEP

A CLOUDED FORECAST FOR FUTURE

THE sheep industry has taken the biggest hit in terms of foot-and-mouth slaughterings, which leaves Jane Connor with an unenviable task.

MLCs senior economic analyst dealing with sheep admits she cannot forecast the outlook for the sheep market with any real confidence.

While figures for cull losses are available, she simply does not know how many ewes, draft ewes, hoggets and new season lambs will be killed on welfare grounds.

Nobody can accurately predict how many normally-exported light lambs will reach the food chain following intensive sales promotion, nor the effect of this on demand for standard weight lambs.

As there is no indication when exports will resume and there will be no light lamb buy-up next year, some mountain ewes will not be tupped. The question is how many? Many factors, including the retention of many ewe lambs for restocking, or a serious public scare over links between scrapie and BSE could make nonsense of any forecast

If the December 2001 census shows the size of UK breeding flock is the anticipated 14% down at 16m head, enough ewes were in the right place for tupping, and the lambing rate is better than the exceptionally low one in 2001, Mrs Connor expects 7% more lambs to reach markets next year.

Finding outlets for the 12.49m lambs she thinks could be born in 2002 will depend on the reopening of export markets, and the effect of a new rule dictating the removal of the spinal cord of lambs aged over six months shipped to France.

"It is fair to say that the sheep industry has reached a watershed and is already shaking out," she says. "Nobody really knows what is likely to happen on farms, or in the market-place. But lack of profit in recent years, rising production costs, a shortage of skilled labour, reduced availability of tack and the uptake of environmental schemes will cut sheep numbers."

David Croston, MLCs head of sheep strategy, says producers have to face facts, including the shift of support away from direct subsidies, the theoretical risk of scrapie in sheep and unilateral specific risk material measures introduced by the French.

"The MLC sheep strategy council has identified action required by the government, MLC and industry organisations to ensure its vision of modest and sustainable recovery can be achieved," says Mr Croston.

Consumers must be given greater reassurance, which has to be linked with practical sheep identification and traceability. Efforts to export sheepmeat need to be refocused, the National Scrapie Plan should be accelerated, and communication between all sectors of the sheep industry improved and increased.

Mr Croston believes even if the long-term fall in lamb consumption cannot be reversed, it can be slowed. Developing, and effectively promoting, convenience products could change the attitude of young consumers, but farmers must produce the type of animals required using welfare and environmentally friendly methods.

Livestock markets, abattoirs, transport companies all have their roles too if consumer confidence is to be fully restored.

"Modest and sustainable recovery can be achieved" – David Croston.

"The sheep industry has reached a watershed" – Jane Connor.

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SHEEP

26 December 1997

SHEEP

SHEEP farmers are in for a tough time as the new year opens.

As 1997 drew to a close values were below 100p/kg lw and falling – and this at a time when they traditionally rise.

Tighter Specified Risk Material control measures for lambs over 12-months old come into effect from Jan 1, following suggestions of a link between BSE and sheep. With dentition to be the means of ageing stock, those sold with erupted incisors could be discounted because of the additional costs involved, says the Meat and Livestock Commission.

More downward pressure on prices will come in the new year as the backlog of animals kept by farmers hoping for price improvements, hits the market.

Some of these animals were bought – earlier in this grass-rich season – as £40-plus stores. But the advice from the MLC is simple: Sell them as soon as they are fit and ready – delaying could mean bigger losses.

Over the coming three months, 600,000 more hoggets could be marketed than in the corresponding period of 1997. Thats nearly a 20% increase. And some of them will be over-heavy and over-fat.

Stock cleanliness will be another big issue, particularly on traditional finishing systems such as roots. But its one well worth concentrating on, says the MLC, with dirty sheep likely to be discounted or unsaleable.

The year overall is likely to see prices below those of 1997 which, in turn, was a disappointing one for farmers compared with 1996. This is likely to be reflected in the traditional spring peak in trade, which could struggle to reach 1995s 120p/kg.

On the supply side, clean sheep slaughterings are expected to hit 16.35m in the coming 12 months, an increase of 7%. This reflects a small expansion of the breeding flock, a fall in live lamb exports and slightly reduced ewe lamb retentions.

Ewe and ram slaughterings, however, will fall another 4%, after a 20% drop in 1997.

Sheepmeat consumption, meanwhile, is expected to remain steady, after its 5% drop in 1997. But with this sector recently in the headlines over a possible BSE link, and Brussels angling towards the removal of spinal columns from older animals, sheep farmers will be entering the new year in a justifiably nervous mood.n

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SHEEP

27 December 1996

SHEEP

NEXT year looks like being another good one for the sheep farmer. Perhaps not quite as good as 1996, however.

January will open with prices almost 20% up on those of 12 months earlier. But this differential – which has been evident for long periods – means that sheep premium payments will fall.

Back in the spring, the market was buoyant, as demand for beef collapsed. With prices topping the 200p/kg-mark, the £100 lamb was not uncommon.

Such heights are unlikely to be repeated this year. The BSE effect could have been worth about 30p or 40p/kg at its peak, according to the MLC. So in April, a standard quality quotation of between 140p and 150p/kg is more likely.

The spring high point in values is, however, likely to be come earlier this year, with Easter falling at the end of March. Lamb producers, in confident mood, have also put the tups to work earlier.

Hogget slaughterings, meanwhile, could be running high in the first quarter of 1997 as farmers, having bought stock expensively as stores, postpone selling in the hope of a rising trade.

The switch of retailers from hoggets to lambs is likely to be abrupt when it does come. So the advice from the MLC is to market hoggets as soon as they are ready.

Although lambing rates could rise 1%, partly reflecting better grazing conditions at tupping time, sheepmeat production overall is expected to show a 1% fall.

A chief factor is the 10% drop in cull ewe slaughterings. This is down compared with previous years when ewe lambs, eligible for sheep annual premium, were retained by producers at the expense of older ewes.

Apart from the lower spring peak, prices look set to be similar or slightly below those of this year for much of 1997.

The live export movement – which depends for its viability on the simultaneous calf export trade – seems unlikely to increase much. And carcass exports could drop, on the back of a stronger £ sterling.

Questions are also being raised in some countries as to the desirability of older sheep. Something for the tail-end hogget marketeer to watch.

One import trend evident this year, meanwhile, was an extension of the time window for chilled New Zealand lamb – yet another knock-on effect of the BSE crisis on beef sales.

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