Lamb prices buoyant for next three years

The lamb price will remain buoyant for the next three years but the industry must work hard to convince consumers that the price is one worth paying.

John Dracup, livestock director for the red meat unit at Vion, believes the lamb price could climb yet higher in the next 12 months if currency markets remain stable.

But he warned producers at NSA Welsh Sheep 2011 that higher prices could result in lamb being perceived as a special occasion product only. “I think we will see high prices for the next two to three years, it’s looking very positive, but with this should come some reality checks. We need to think about how customers are going to react to these prices. If they stay where they are it will become more prevalent for lamb to be used for special occasions only.”

Hybu Cig Cymru, Wales’ red meat levy body, is using media campaigns to persuade consumers that they are paying a fair price for a quality product.

HCC’s marketing manager Laura Dodds said it had always positioned lamb as a quality product but admitted consumers needed to be reminded of its real value. “Prices are at a fair level for farmers to cover costs. Our job is to convince consumers that lamb is not a special occasion product but one they should be eating day in day out.”

Competition for lamb among retailers is helping to sustain prices. John Dracup said major multiples are interested in adding value through branding. “Retailers are in strong competition and therefore there will be continued competition for lamb,” he said. “The other opportunity is from export but if there is a major fluctuation in currency it will have a big impact,” he warned.

He urged lamb producers to identify their supply markets to ensure they meet the necessary requirements.

In the organic lamb sector, level supply continues to be an issue. Jon Morgan, of Welsh Livestock Marketing, sees this as a major problem in the future. “Organic lamb production is flying but this will add to the normal problems of an oversupply in the late summer, autumn and early winter and an undersupply on the shoulders of the season,” he said. “Customers are looking for level supply and the challenge is to level out that supply.”

With very little Welsh lamb being exported; there are untapped opportunities from overseas markets, he believed. “We need to work with Hybu Cig Cymru to look at ways of getting our lamb out there,” he said.