High lamb prices set to continue on low throughput

An increased number of UK lambs are likely to be presented for slaughter in the run-up to Christmas, but the domestic market is expected to remain tight because of reduced volumes of New Zealand lamb, according to new analysis.

A report by Hybu Cig Cymru – Meat Promotion Wales (HCC) shows the short-term outlook for the sector remains good, even though, so far this year, throughput from the 2021 lamb crop is lower than expected at 5.99 million head.

This is 12.7% lower than a year ago and 10.9% below 2019 levels, and means there could be 6.5 million lambs from the current lamb crop still on farms.

See also: Lamb prices jump to neat £6/kg mark

However, even though an increased number of lambs are expected to come forward over the next few weeks, current above-average market prices for lamb may continue, says the report.

Glesni Phillips, report author and HCC data analyst, said: “Looking at the remainder of the year, it is expected that an increased number of lambs will come forward over the coming weeks and months.

“However, decreased volumes of New Zealand lamb, reported to be making its way to the UK due to ongoing difficulty in the shipping industry, could lead to an overall tightening in supply when compared with previous years.”

Ms Phillips explained the supply of both New Zealand and Australian sheepmeat is currently tight, with New Zealand production down some 4% on the year.

This is reflected in the UK trade data from HMRC which shows that imports of fresh and frozen sheepmeat from both New Zealand and Australia are down.

Christmas demand

However, demand for lamb on the domestic market remains firm.

“Although spend has fallen below year-earlier levels as predicted, consumers are spending more than they did in 2019 before the pandemic. With Christmas coming up, this demand is likely to continue.”

The report highlights that prime lamb live- and deadweight averages in Wales are currently averaging some 20% above last year’s levels.

A tight supply since the start of 2021 has been a key factor in this price hike, with reduced throughput being put down to concerns about the post-Brexit trade environment and higher retention rates in UK breeding flocks.

Another contributory factor is the shortage of staff at many UK abattoirs, which may have limited the level of throughput at processing sites each month.

The full report – Lamb Supply: Update and Outlook 2021 – is available to download from the HCC website.