Lamb market needs demand boost to ease price pressure

UK lamb prices will remain under pressure this season unless domestic demand picks up, according to analysts.

The high sheepmeat supplies and tough export conditions that have caused this spring’s poor prices are unlikely to change, Eblex’s monthly report said.

The levy board has previously forecast a 4% rise in sheepmeat production in 2015, taking it to 309,000t. This year’s lamb crop is expected to be big or bigger than last year.

See also: Farmer anger at rise in NZ lamb imports

An early Easter saw demand drop off faster than usual this spring.

And a strong pound has made UK lamb more expensive abroad and imports from New Zealand more attractively priced.

AHDB/Eblex senior analyst Mark Kozlowski said NZ imports were slowing, as southern hemisphere slaughtering was higher earlier in the year.

“Despite the expected fall in imports, UK production is forecast to increase seasonally and year on year as more new season lambs come to the market, so supply levels on the UK market will remain high,” he said.

“This will mean an increase in domestic demand will be required to lift the current pressure on lamb prices, especially as export conditions are expected to remain difficult.”

New season numbers are building strongly in British marts.

In the week ending 23 May, new season numbers were up 34% on the previous week, as old season throughputs dropped back 35%.

The new season liveweight SQQ fell 19p/kg on the week to 189.7p/kg – 60p/kg lower than 2014 levels.

The deadweight SQQ dropped 5p/kg on the week to 423.3p/kg – about a £1 lower than the same time last year.