Trade Talk: Sheep trade plummets to new low but new record set for dairy calves

By Keith Spencer,

Monmouthshire Livestock Auctioneers.

When farmers and farming are making headlines on the national news it is rarely a good sign and the present situation is no exception.

Dairy farmers have been feeling the pinch for some time now, with many receiving less than the cost of production for their milk.  The only good news for them is the extremely strong trade for their calves, with a new market record price of £450 paid for a five-week-old Limousin cross bull calf at Monmouthshire Livestock Centre last week.  Cull cows are also a reasonable trade, although down from their peak prices earlier in the year. The best dairy cast cows achieved around £1,000 on Wednesday, with beef cows to £1,150 for the 66 on offer.

It is the sheep trade however, which is currently making the news with demonstrations and protests around the country.  A perfect storm has hit the industry with a larger supply of lambs arising from increased breeding ewe numbers and a very good lambing in the spring. These have met a market with reduced demand due to the strength of the pound against the euro. The trade is also being undermined by imports from New Zealand lamb at a time when the home grown supply is at its strongest.

Huge numbers of lambs in the market a few weeks ago – with more than 4000 in a week – prompted a significant fall in trade to less than £1.50/kg.

Whether this is as a result of the protests or lower numbers forward, trade has improved and in the week commencing 3 August SQQ was 164.78/kg at Monmouthshire Market. If, however, numbers increase again this might prove to be a short lived reprieve. At the end of the day it is a supply and demand issue and probably the best we can hope for is that the lower prices will stimulate demand and help take some of the extra supply off the market. Of course a stronger euro would help and less imported product.

We don’t sell prime cattle in our market but somebody must be making a good job of them by the demand for store cattle. A total of 168 went through the ring at the weekly sale on Wednesday and sold to a fast trade, peaking at £1,345 for a 710kg 26-month-old steer. Meanwhile younger cattle between 550-600kg made 220p/kg with yearling steers to £900 (365kg).  Although numbers remain good for the time of year there is a concern that with both dairy and beef producers reducing their herds we won’t see the usual throughput in the autumn.

The scourge of TB is also responsible for smaller numbers as restricted farms cannot sell through the markets and smaller producers give up the struggle.  I just hope they don’t all keep more sheep!