Export delays and Covid-19 issues cause lamb price drop

Export hold-ups and Covid-19 difficulties have hit the liveweight lamb trade with values down sharply on the week.

Opinion among auctioneers is divided as to whether the price fall heralds a period of decline or represents a blip.

The AHDB weekly livestock auction market report, for the week ending 19 January, showed the old-season lamb liveweight  SQQ price was 11.09p/kg down on the previous seven days, putting the average at 254.33p/kg.

See also: Coronavirus: Online livestock auctions – how they work

The drop was seen despite a tightening supply with total throughput at British auction markets at just over 81,000 head, down 7.8% on the previous week.

One buyer suggested difficulties at ports were responsible for the price fall.

He predicted further sharp drops that would ultimately see R-grade deadweight prices fall from the highs of 570-580p/kg to about 500p/kg in the coming weeks.

“Export checks have caused severe hold-ups and processors are concerned products will be rejected at the destination.

“That has added a layer of uncertainty that is undermining prices.”

He said that the Covid-19 lockdown had caused a drop-off in demand from restaurants, adding further impetus to the price decline.

He put the decline in throughputs down to a shortage of processing capacity caused by staff absences resulting from Covid-19 illness.  

However, in contrast, Jonny Williams, operations director at Farm Stock Scotland, suggested prices were stabilising after a period of exceptional highs.

Mr Williams said demand for Scotch lamb was still strong while availability was lower.

The lack of availability in 2021 is down to a smaller lamb crop, and this had been exacerbated by farmers capitalising on high prices and marketing lamb earlier than they normally would.

“With the lack of availability on farms and demand strong, I don’t see a general price decline,” Mr Williams said.

Instead, he suggested that the issues surrounding Covid-19 and early difficulties with post-Brexit exports would result in a period of relative price volatility.

“Until these issues are ironed out, there will be prices changes, but the fundamentals of low availability and good demand signal the market will remain firm,” Mr Williams said.

He urged producers not to panic and market lamb when it was ready, and according to their normal schedule for sale times.