New season lamb prices take a hit
Prime lamb prices fell by over 20p/kg liveweight in Tuesday markets this week – but traders say the story is more complex than a seasonal rise in finished lamb numbers.
New season lamb numbers were in fact down over the week, with 18,375 SQQ lambs going through GB markets on Tuesday (16 June) compared with 19,790 on the same day last week. Some auctioneers attributed this to good weather keeping lambs from market as shearing and silaging took priority.
This was the case at Shrewsbury, where Peter Willcock sold 1077 new lambs on Tuesday to average 175p/kg lw for SQQ weights, down 18p/kg on the week with a lower entry being attributed to the good weather.
He and other auctioneers urge producers to continue to sell lambs once they are fit, rather than being tempted to keep them back because of price dips.
Exeter’s Monday market had 929 lambs with an SQQ average price of 169p/kg lw, down 16p/kg on the previous weeks’ entry of 1300. Prices had fallen after last week’s Monday market (7 June), and Stags auctioneer Chris Clapham reckoned that this had put producers off sending sheep this week.
Exeter was also coming to the end of its large run of very early finishing lambs and the volume of lowland finished lambs in its area had not yet built up, said Mr Clapham.
Export demand was slow and this market is more difficult to call this season, he said. However, he like many others is concerned at possible consumer reaction at home to high retail lamb prices.
Around one in three UK lambs is exported and while export demand is expected to lead prices again this season, the recent strengthening of the pound against the euro has made this market more difficult, especially at the start of the new season lamb market.
David Willars sold 1679 new season lambs (600 head more than the previous week) at Melton Mowbray on Tuesday to average 166p/kg and attributed the 24p/kg price drop on the week to numbers, quality, difficult exports and the retail price of lamb. “Wholesalers have been complaining for months that lamb is too dear,” he said.
Some producers, tempted by recent prices of between £70 and £80 a lamb, had put stock in which wasn’t quite as good as it should have been, said Mr Willars, with the dry spring and lack of grass possibly forcing some selling. “My experience is that when things go down this quickly they tend to recover a bit. Long term, I still have confidence in the job.”
With lamb numbers expected to be down on last year, some see prices stabilising in the £65 to £70 a head bracket. EBLEX forecasts a fall in mutton and lamb production this year.
UK clean sheep slaughterings in the first quarter of 2010 at 2.5m head were 18% down on the same period in 2009. A smaller breeding flock means that lamb numbers for slaughter is significantly lower than last year. Lambs are taking longer to reach target slaughter weights as a result of the cold start and then the dry spring.
The December census showed the UK breeding flock down 1%, with a further 1% drop predicted for this year, followed by stable numbers in 2011. The EU flock is down 2% this year, after a much bigger drop in 2009. Fewer lambs are expected to be produced in France and Ireland, so supplies are expected to remain tight in the main European markets, says EBLEX.