Lamb prices set to remain fair in 2010

Lamb prices are forecast to remain relatively strong for the third year in a row, as dwindling supplies more than compensate for any reduction in high street sales, according to industry body EBLEX.

“As predicted at the start of last season, 2009 saw continued improvement on the favourable prices seen for much of 2008 with R3L lamb prices staying ahead of the previous year in almost every month,” it says in its latest market outlook.

“The firm market position was primarily driven by a lack of old season lamb carry-over, accompanied by a contraction of around 6% in both the breeding flock and overall sheepmeat production.”

Good marketing conditions towards the end of 2009 and into the first part of 2010 are expected to result in very little store lamb carry-over once again this spring. At the same time, the harsh winter is likely to rule out any further improvement in lambing percentage.

“The better marketing conditions of late, and a lower than originally feared impact from the introduction of EID, could well slow the annual contraction in the breeding flock to nearer 2.5% by the end of 2010,” says EBLEX senior anylist Mark Topliff.

For the current season, however, the 4% decline in the ewe numbers recorded in last June’s agricultural survey suggests this year’s lamb crop will be around 2.2% down on 2009.

Culling rates are anticipated to continue at the relatively high rate of 16% seen for the past two years, with a particular loss of hills ewes resulting in a further increase in the proportion of the national flock in lowland areas.

Overall, the forecasts predict total UK sheepmeat production will be around 294,000t in 2010 against 305,000t in 2009 – a fall of nearly 4%.

“With sterling assumed to remain relatively weak against the euro, tighter sheepmeat supplies on the continent and strengthened export marketing activity from the levy boards, exports are forecast to continue growing in 2010, albeit at less than the 9% growth of the past year,” says Mr Topliff.

“With little prospect of a rapid recovery from recession, and with retail lamb prices remaining relatively high, overall domestic consumption in 2010 is forecast to decline to around 328,000t.

“The fact that it will do so at almost exactly the same rate as production falls, however, implies relative buoyancy and stability in the market for another year.”

See our Prices and Trends section for more information from the market.