BETTERRETURNSAREONCARDSIN2000…
21 July 2000
BETTERRETURNSAREONCARDSIN2000…
Whats in store for the
sheep trade this autumn?
Market commentator
Peter Crichton takes a
look in his crystal ball
AFTER one of the most difficult trading years for sheep producers, when breeding and store values slipped to record lows, most industry sources are expecting better returns this year.
As far as breeding ewes are concerned, last year many producers held off buying their full quota of shearling ewes or theaves because of collapsing store lamb and cull ewe values. This means that flockmasters who want to maintain flock sizes will have to come out buying more strongly this summer.
Although sheep finances are still tight there should be a little more money in the system helped by better cull prices this spring and, at the time of writing, new seasons lambs are also meeting a reasonably firm demand. The current farmers weekly cull ewe average price is £16.50/head compared with just under £15 a year earlier. The SQQ for new seasons lambs quoted at 95p/kg is also 5% better than a year earlier.
The Mule remains one of the most popular ewes in lowland flocks and shearling prices which last year struggled to hit £40/head are forecast to move up into the £45 to £55 range for well bred types this summer.
This should provide sellers who bought ewe lambs out of the north in the £25 to £35 bracket with a better return and buyers will still be looking at good value and well within the old rule of thumb guide that a shearling is worth one and a half finished lambs.
Tups up
Tup prices are also expected to reflect a slightly better outlook. With more attention being placed on EBVs, ram buyers should be looking harder than ever at the MLC sire index levels of replacement tups and although some of the more traditional buyers still prefer to let their eye be the guide, lean indices are not always apparent on inspection.
Supermarket and export buyers are all looking for a leaner carcass and there are few premiums being paid for any sheep above the 3H fat grade. In the main, lambs need to be in the 1 to 3L bracket to have the chance of beating the average and a few pence/kg can make all the difference between profit and loss.
Ram buyers should be willing to pay a little more to upgrade the genetic quality and output from their flocks and those prepared to go shopping in the 300 to 400gns bracket will get far more for their money than those who still regard a tup over 200gns as too dear.
On the lamb front, prices at major auctions are expected to be significantly better than the slump seen last year.
There are a number of reasons for this, all of which should help to put a firmer base into the trade. With the k holding at similar levels to last year, live and dead export trade from the UK is expected to take a large number of lambs off the home market when numbers start to build up in summer.
Last season, Farmers Ferry was reported to have handled over 1.5m live lambs and the newly launched Farmers Fresh is expected to account for a big slice of the carcass trade. Existing exporters are also shipping large tonnages into Europe, with France being the main recipient for U and R grade 2 to 3L carcasses in the 16 to 20kg weight range.
UKflock smaller
The UK flock has also shrunk in size by about 3% and because of a higher than usual retention of old or non-productive ewes after the price collapse last season, lamb numbers are also expected to be down as a result of reduced flock productivity.
At the same time, store lamb buyers are expected to be out in force encouraged by strong hogget prices last season for lambs bought at the bottom of the market. In many cases, well matched batches of medium store lambs were traded for under £20/head at last years sales and these subsequently sold for £45 plus as hoggets four to six months later.
This time around there are forecast to be fewer store lambs forward and more buyers operating, with their numbers swelled by former dairy farmers forced out of milk and looking for other ways to use the grass and aftermath feeds available.
However, there are still plenty of challenges to be faced by the industry in the months ahead. The EU is still planning a sheep identification scheme which could lead to all sheep being tagged and a paper mountain for producers trying to keep track of over 20m sheep through the system in any one year.
There are also reports of moves from Brussels to ban on-farm carcass disposal with all fallen stock going to specialist knacker firms with more added expense, especially in remote hill areas.
Slaughter pressure
The slaughtering sector remains under pressure too with more closures on the cards and a move towards a small number of large meat plants, often many miles away from the farms of origin. Meade Webber at Hereford has been added to the list of abattoir casualties and the future of the former ABP Wellingborough plant remains uncertain at the time of writing.
Wool prices have also failed to pay shearing costs and have added yet another bottom line deduction to producers returns, and the next ewe premium payment following this years £13.50 estimate is also unlikely to move upwards.
To summarise, the worst may be over but there are still plenty of hard times ahead and a correction in the value of the £ could do more to help the industry than any other single factor. *
SHEEPTRADE
• Prices better this year.
• Fewer lambs forward.
• But challenges remain.
Most industry sources are hoping for better returns from sheep this year, says Peter Crichton.
Prices at major auctions are expected to be better than last year, especially for lambs.