Firm lamb price outlook on strong export market

As new crop lamb numbers start to build, the market outlook is firm with export demand setting the tone.

But, getting the correct finish will be tricky for many producers already short of grass in the south and east of England.

Over the next few weeks, gauging just how many hoggets are left to sell will also be a challenge.

“The December census showed more lambs than expected on the ground,” said Debbie Butcher, senior market analyst with EBLEX.

The question is how many will be sold as hoggets and how many retained for breeding. This year clean sheep slaughterings are about 5% lower than the same point in 2011.

EBLEX published its first deadweight new season lamb prices this week in which a sample of 400 lambs averaged 501.6p/kg dw in the week ended 31 March. This compares with an overall average for hoggets of 471.1p/kg dw in the same week.

Hereford Market Auctioneers had 110 spring lambs through the ring on Wednesday (4 April) averaging 253.4p/kg liveweight, a slight dip on the previous week when lambs would have caught the Easter trade.

“Quality is very good but we haven’t quite seen the bloom you would have expected,” said auctioneer Richard Hyde. This could be the effect of grass shortages in some places with increased creep feeding to make up for less milk,” he said.

When buyers switch over to new season lambs in a few weeks time Mr Hyde was hopeful that prices would move back in to the 260 to 270p/kg range.Simon Whaley, of Southern Counties Auctioneers, sold 70 spring lambs at Salisbury on Tuesday at between 250p and 260p/kg. Looking further ahead, lamb should be a good trade; the problem would be getting the required finish if grass was short, he said.

Poor weather disrupted supply of new season lamb to Gaerwen Market on Anglesey on Wednesday, but auctioneer Simon Jones, of Morgan Evans, said the market seemed to be following a similar trend to last year, with an average of 260p/kg for new season lambs last week. “It all depends on the euro – it’s the driving force of the trade.”

The main factors in UK lamb outlook

• UK 2012 sheepmeat production forecast slightly higher than in 2011

• European sheepmeat production expected to fall

• Slightly larger UK flock – increased lamb availability and a likely rise in imports from New Zealand

• Further growth in UK exports to non-EU markets

• Value of euro – currently relatively strong so helping exports and keeping prices firm

• Relatively high culling rates will limit flock growth

• Impact of Schmallenberg virus and bad weather difficult to quantify.