Lamb trade recovers on lower numbers

Lamb prices look set for a steadier trade as autumn demand picks up – but finishing challenges remain.

The SQQ price steadied at 155.5p/kg lw in the week to Tuesday (9 October), a fall of just 0.4p/kg on a 7% higher throughput.

High throughputs in recent weeks pushed prime lamb prices below last year’s levels in the aftermath of poor weather, which badly disrupted lamb finishing and marketing earlier in the season.

At Northallerton market on Tuesday (9 October), 707 prime lambs were sold, compared with 1,671 a week earlier, which in itself was an unusually high number after floods had delayed marketing the previous week.

Here prices picked up to average 157p/kg lw compared with 148p/kg last week. Auctioneer Giles Drew said producers needed to make sure they were supplying what the market wanted – a lot of lambs were coming forward lean and that was not helping averages.

Mr Drew expected demand to firm seasonally and numbers to drop. There was a lot of pressure on farmers, buyers and wholesalers, he said. Export business was difficult because of the economic conditions in customer countries.

The variable finishing conditions are reflected in reports from some other markets where lambs are too heavy or too well finished.

EBLEX estimates that 1.2 million prime sheep were slaughtered in September, an increase of about 5% on the same month last year.

Poor finishing conditions in June, July and August led to the recent high throughputs and pressure on prices – three weeks ago the weekly lamb kill was the highest in two years.

Looking ahead, AHDB/EBLEX analyst Paul Heyhoe said the weather would play a big part from now on and that a good winter would see lambs marketed steadily and on a seasonal pattern of rising prices.

“Our view is that there are more lambs on the ground than a year ago. The Eid festival at the end of this month will hopefully add a bit of demand to the market.”

Lamb is also expected to become more competitive as other meats rise in price as the effect of higher bought-in feed costs is felt.

EBLEX expects lamb throughputs to be higher than 2011 levels for the rest of 2012. However, if poor weather returns, we may quickly return to a situation of tight supplies, it said in its weekly report.