Costs and flagging lamb price dent sheep confidence

Rising costs and stagnant new season lamb prices have challenged confidence in the sheep sector and left some breeding sheep looking well bought.

Farmers have seen feed prices lift by 50%, fuel double in price, fertiliser treble, and spring lambs make £15-£20 a head less on the year. Meanwhile, hoggs have slipped 16p/kg since the start of the year to 259p/kg.

This has taken £10 a life off some market averages for sheep with lambs at foot. Auctioneers point to limited export demand and a large carry-over of hoggs from 2021 as more businesses played the market, hoping for a repeat of 2021’s high prices.

Defra’s February slaughter figures show 9% more clean sheep were killed in February 2022 on the year.

See also: How graziers aim to keep fertiliser cost below £40/ha

South West

Exeter’s averages for breeding ewes with lambs at foot fell from £80 or more a life in February to £70 and £67.50 a life in recent weeks.

Russell Steer of Kivells hopes the spring sunshine will increase demand. However, he stresses that market fundamentals are not helping.

He said the best ewes with lambs had made £90-£100a life, but plenty of Mules with lambs at foot were at £50-£60 a life.

“Export demand has been steady. Last year we had three national abattoirs looking to export spring lambs. This year we have one half-interested,” he said.

He forecast more flock contraction as businesses tightened belts and capitalised on cull ewe prices.

Paul Ashton of Greenslade Taylor Hunt said spring lamb trade had been at 275-285p/kg at Sedgemoor, a far cry from late March last year, when lambs peaked at 383p/kg and £160 a head.

He questioned how much money consumers had to spend on lamb, and underlined the higher costs of farming and input prices.  

“One client sells a huge number of store lambs and despite their average lifting £31 a head last year, they are no better off – it’s all gone on inputs.”

North West Auctions

Ian Atkinson of North West Auctions said ewes with lambs at foot looked about £5 a life back on the year. The third sale of the season on Monday (21 March) averaged £75 a life.

Strong continental sheep with older lambs were holding value, he stressed.

However, prime hoggs at 260p/kg – down 40p/kg on last year – and feed and fertiliser prices were hampering demand at Junction 36 Kendal.

He added: “Easter is later this year, on 17 April, which might favour spring lambs. Once buyers switch over to spring lambs they tend to stay. An early Easter often means hoggs are bought for Easter trade.”